The Offer That Cannot Legally Exist
Somewhere in your search results is a broker offering to double your first deposit. Maybe it is a 100% match, maybe a cash rebate once you trade a certain volume, maybe a gift for referring a friend.
If that firm is serving retail clients in the EEA or the UK, the offer breaks the rules. Not "sits in a grey area" — the product-intervention measures include a prohibition on monetary and non-monetary benefits used to promote CFD trading. ESMA's stated reasoning was that such offers "can act as a distraction from the high-risk nature of the product."
The UK version is blunter still. Firms must "stop offering current and potential customers cash or other inducements to encourage retail consumers to trade."
This gives you something genuinely useful: a test you can run in one second, from a search result, without opening an account or reading a licence. A deposit bonus aimed at EEA or UK retail clients means the firm is either not authorised in your jurisdiction, or not complying with the rules there. Both answers point the same way.
Prohibition quoted from ESMA's product-intervention notice and the FCA's corresponding measures, verified at source 8 August 2026.
Why Regulators Went After Bonuses Specifically
Banning a marketing promotion looks paternalistic until you look at what the promotion does to behaviour.
A deposit bonus is almost never withdrawable on its own terms. It is credited to the account and released only after the client trades a required volume — typically a multiple of the bonus, sometimes a large one. The offer therefore does not give you money. It gives you an obligation to generate turnover, denominated in money.
Follow that through:
- It rewards volume, not judgement. The fastest route to a volume requirement is more trades, larger trades, or both, which is the opposite of what survives.
- It arrives at the exact moment of maximum inexperience. Deposit bonuses are aimed at new accounts, so the incentive to overtrade lands on the client least equipped to recognise it.
- It reframes the deposit as a windfall. Money that feels like a bonus is risked differently from money that feels like savings, and this is well understood by the people designing the offer.
- The bonus is frequently forfeited on withdrawal. Take money out before clearing the volume requirement and the credit — and sometimes the profit attributed to it — disappears.
None of that requires anyone to behave dishonestly. The terms are usually published in full. The regulator's objection was not that bonuses are secretly a fraud but that they work exactly as designed, on a product where the majority of retail accounts already lose money.
What Is Still Allowed
The prohibition is narrower than "brokers may not offer anything of value", and it is worth knowing the boundary so a legitimate firm is not written off for the wrong reason. The rule targets inducements to trade.
| Allowed | Prohibited |
|---|---|
| Educational material, webinars, courses | Deposit-match bonuses |
| Demo accounts, unlimited and free | Cash rebates for hitting volume targets |
| Research, analysis and market commentary | Gifts and prize draws for trading |
| Genuinely lower spreads or commissions | Refer-a-friend cash payments |
| Better platforms, tools and charting | Credits released only after required turnover |
The line is coherent once you see it. Teaching you to trade better is permitted. Paying you to trade more is not. A firm competing on spread, execution quality or platform is competing on the actual cost and quality of the service — which is what spread versus commission and execution quality and slippage are about, and where the comparison is worth your attention.
There is a subtler category too: a genuinely lower headline spread advertised as a promotion. That is a price, not an inducement, and it is allowed. The test is whether the benefit is contingent on you trading a certain amount. Contingent on turnover is the tell.
Do the Arithmetic on the Offer in Front of You
If you are outside the EEA and UK, or you are simply curious what the offer is worth, the bonus can be priced. It takes three numbers, and all three are in documents the firm publishes — none of them can be supplied by an article, because they differ by firm, by offer and by instrument.
| Step | What to read off the firm's own terms | Why it decides the answer |
|---|---|---|
| 1 | The bonus amount, B | The headline, and the only figure in the advertisement |
| 2 | The turnover requirement, T — expressed as notional volume traded, not as a count of trades | This is the obligation you are actually accepting in exchange for B |
| 3 | Your round-trip dealing cost, c, as a fraction of notional — spread plus any commission | From the firm's pricing page, for the instrument you actually trade |
| 4 | Compute T × c | The cost of discharging the obligation, before any gain or loss on the trades themselves |
| 5 | Compare T × c against B | If the cost of the turnover exceeds the bonus, the offer is negative before you have expressed a single market view |
Two things about that comparison are worth spelling out. First, it is deliberately generous to the offer: it assumes your trading breaks even, which is the assumption the published loss percentages suggest is optimistic for most retail accounts. Any real trading result is applied on top of a cost you have already committed to. Second, T is frequently expressed as a multiple of the bonus or of the deposit, and the multiple is where the economics live — so read step 2 as a notional volume even when the terms present it as a tidy-looking number of lots or a simple multiplier.
Then check three conditions that sit around the arithmetic, because each one can change the answer entirely:
- What happens to the credit if you withdraw before clearing T. Frequently the bonus is forfeited, and in some structures profits attributed to it go with it. The turnover obligation is what converts a "bonus" into a lock on your own deposit.
- Whether the bonus counts as equity for margin purposes. If it does, it inflates the size of position you can open — and therefore how quickly a move can reach your close-out level, which is the mechanism described in the 50% margin close-out rule.
- Whether there is a deadline on T. A turnover requirement with a clock attached is an instruction to trade at a pace someone else selected, which is a different activity from trading when you have a reason to.
If the answer to any of those is unclear from the published terms, that is itself the result. A promotion whose cost cannot be calculated from the documents describing it has told you what you needed to know.
Using the Test Without Getting It Wrong
Two failure modes are worth naming, because the test is easy to over-apply.
A bonus offered to non-EEA clients is not a rule breach. A firm's global site may lawfully advertise bonuses to clients in jurisdictions where they are permitted. Seeing a bonus on a broker's international page does not mean the firm is misbehaving — it means you are looking at a page written for someone else. What matters is the offer presented to you, on the entity that would hold your account.
The absence of a bonus proves nothing on its own. Plenty of unregulated firms run no promotions at all. This is a fast negative test, not a positive endorsement. A firm passing it still has to pass the checks that actually matter: the entity name, the regulator, the register entry, the compensation scheme.
A rebate is not exempt because it is called a rebate. The prohibition covers monetary and non-monetary benefits used to promote CFD trading, and a payment released on reaching a volume threshold is contingent on turnover in exactly the way a deposit match is. The label on the promotion is not the test — contingency on trading volume is. Cashback, "trade and receive", loyalty credits and volume-tiered rewards all sit on the same side of that line, whatever the landing page calls them.
An offer sent privately is still an offer. The FCA's wording is that firms must stop offering *current and potential customers* cash or other inducements. That covers the channel as well as the shop window. An inducement arriving by email, in-app notification or a phone call from an account manager is the same inducement as one printed on a public page, and the fact that it was not published openly is not a point in its favour.
Which is why the bonus test is best used the way it is designed — as a filter, not a verdict. It costs one second and removes a whole category of firm from consideration before you have spent any real effort. Everything after that is the slower work described in 1000:1 leverage and what the extra zeros cost and how to spot a forex scam.
What to Check With Your Broker
Whether or not a promotion is in front of you, four questions settle where you actually stand.
- Which legal entity is making the offer, and is it the entity holding your account? These come apart more often than you would expect on multi-entity brands, and the answer determines which rulebook applies to the offer and to you.
- Is anything currently in my account subject to a turnover condition? Worth asking even if you never consciously accepted a promotion. Credits, welcome balances and "trading capital" attached at sign-up can carry conditions that only surface at the point of withdrawal.
- How does the firm itself make money from my trading? A firm earning from spread and commission has an interest in your volume; the arrangement is normal and disclosed, and it is a different structure from one that takes the other side of your position. ECN versus market-maker brokers sets out the models, and knowing which one you are dealing with tells you how to read any offer it makes you.
- What exactly is free, and for how long? Platforms, data feeds, research and analysis are permitted and often genuinely free. Confirm they are not conditional on maintaining a balance or a monthly volume, because a conditional benefit is the same structure as a bonus wearing a better coat.
The underlying point is that a regulated firm's incentives are visible in its pricing rather than hidden in its promotions, which is why what FCA regulation means for your money is more useful reading than any offer page.
The Broader Point
The bonus ban belongs to the same family of rules as the leverage caps and the close-out threshold, and it comes from the same reading of the evidence: on a product where most retail accounts lose money, the marketing that increases activity increases losses. The regulator's response was not to ban the product but to remove the accelerants.
That set of rules is what the rest of this series covers — why the caps differ by instrument, what electing professional status hands over, and when your broker must close you out. The full regulatory picture is in ESMA rules explained.
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. A majority of retail investor accounts lose money when trading CFDs — commonly disclosed at between 51% and 89%. Capital is at risk, product availability varies by country, and nothing here is a recommendation of any firm.
This article is for informational and educational purposes only and does not constitute financial, legal or investment advice. Promotional rules are set by national regulators and differ by jurisdiction; check the rules that apply where you are resident.