On 22 July 2026, the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) published a supervisory notice outlining the key requirements and supervisory expectations applicable to neobrokers following the entry into force of the ban on Payment for Order Flow (PFOF) in Germany.
Pursuant to Article 39a(1) of Regulation (EU) No 600/2014 (MiFIR), investment firms are prohibited from receiving inducements from third parties in exchange for routing client orders to trading venues. This prohibition has applied at EU level since March 2024. Germany, however, made use of the transitional exemption available under MiFIR until 30 June 2026. Consequently, the PFOF ban has applied in Germany since 1 July 2026.
In its supervisory notice, BaFin sets out the requirements that credit institutions and investment firms must observe when routing client orders from 1 July 2026 onwards. In particular, firms must no longer accept payments or any other form of benefit from third parties in connection with the routing of client orders.
BaFin expects investment firms to:
- adapt their business models, where necessary, from 1 July 2026 to ensure compliance with the PFOF ban and refrain from implementing arrangements designed to circumvent the prohibition; and
- take into account the Questions and Answers (Q&As) published by the European Securities and Markets Authority (ESMA) on 3 March 2026 regarding the European Commission’s interpretation of the PFOF ban.
The supervisory notice provides further guidance on BaFin’s expectations, including practical examples of business model adjustments that are compatible with the PFOF ban, as well as examples of arrangements that, in BaFin’s view, would constitute impermissible attempts to circumvent the prohibition.