I believe it is only illegal if they are fed in such a way as to cause undue stress or pain. A feeder guppy being gulped down by a large fish probably would not count (or at least nobody would be bothered to prosecute), but something like feeding live rabbits to your pitbull terriers would almost certainly get you into trouble. I believe snake owners in this country feed dead mice because being stalked by a boa constrictor would conceivably come within the scope of this law.
I have not seen fish for sale labelled feeder fish in this country, though that may be because of limited experience. It may be due to the above law, but also to the fact that feeder fish are known to be disease carriers of low nutritional quality, so that keepers of carnivores might be better off making private arrangements, so perhaps there is not the market.