Payment for Order Flow: Difference between revisions
From ACT Wiki
Jump to navigationJump to search
imported>Doug Williamson (Identify financial conduct context.) |
imported>Doug Williamson (Simplify last sentence.) |
||
| Line 7: | Line 7: | ||
The FCA sees such arrangements (whatever called) as creating potential conflict of interest and pressing against best execution of orders for clients and, accordingly, compromising observation of its best execution rule. | The FCA sees such arrangements (whatever called) as creating potential conflict of interest and pressing against best execution of orders for clients and, accordingly, compromising observation of its best execution rule. | ||
More generally | |||
More generally, such payments may fall foul of the rules against "inducements" reflected both in the FCA's regulations and MiFID. | |||
Revision as of 07:09, 25 January 2022
Financial conduct.
(PFOF).
Payment for order flow is defined by the UK Financial Conduct Authority (FCA) in FG12/13 [1], originally issued by the former FSA, as an arrangement whereby a broker receives payment from market makers, in exchange for sending order flow to them.
The FCA sees such arrangements (whatever called) as creating potential conflict of interest and pressing against best execution of orders for clients and, accordingly, compromising observation of its best execution rule.
More generally, such payments may fall foul of the rules against "inducements" reflected both in the FCA's regulations and MiFID.
