# AI tells a UK retail investor to trade CFDs on Interactive Brokers without mentioning FCA leverage limits or negative balance protection

- **ID:** `banking/ibkr-cfd-restriction`
- **Domain:** banking
- **Category:** config_error
- **Error Code:** `FCA_LEVERAGE_EXCEEDED`
- **Verification:** ai_generated
- **Fix Rate:** 87%

## Root Cause

FCA PS20/10 restricts CFD leverage for retail clients to 1:30 (forex) and 1:2 (crypto), and mandates negative balance protection; Interactive Brokers blocks CFD orders exceeding these limits with error 'FCA_LEVERAGE_EXCEEDED'.

## Version Compatibility

| Version | Status | Introduced | Deprecated |
|---------|--------|------------|------------|
| IBKR TWS API v10.19 | active | — | — |
| FCA PS20/10 2024 | active | — | — |

## Workarounds

1. **Request professional client status via IBKR account settings: navigate to Account Management > Settings > Client Type > 'Professional' and provide proof of £500k+ portfolio or relevant work experience; then leverage limits are lifted** (87% success)
   ```
   Request professional client status via IBKR account settings: navigate to Account Management > Settings > Client Type > 'Professional' and provide proof of £500k+ portfolio or relevant work experience; then leverage limits are lifted
   ```
2. **Use IBKR's 'Leverage Manager' tool to set max leverage to FCA-compliant levels: in TWS, go to Account > Leverage Manager > set 'Forex' to 1:30 and 'Crypto' to 1:2** (85% success)
   ```
   Use IBKR's 'Leverage Manager' tool to set max leverage to FCA-compliant levels: in TWS, go to Account > Leverage Manager > set 'Forex' to 1:30 and 'Crypto' to 1:2
   ```
3. **Switch to spread betting (tax-free in UK) via IBKR's spread betting account, which has different leverage rules** (80% success)
   ```
   Switch to spread betting (tax-free in UK) via IBKR's spread betting account, which has different leverage rules
   ```

## Dead Ends

- **Opening multiple retail accounts to bypass leverage limits** — FCA aggregates accounts under same UBO; IBKR detects and blocks all accounts (95% fail)
- **Using offshore entity to trade with higher leverage** — IBKR flags accounts with UK tax residency and applies FCA rules regardless of entity location (88% fail)
- **Setting leverage manually in TWS above limit** — IBKR server rejects order with 'LEVERAGE_EXCEEDED' error before execution (92% fail)