The Financial Conduct Authority (FCA) is set to review its position on payment for order flow (PFOF) in 2026, more than a decade after the practice was banned in the UK in May 2012.
The stance – announced in the FCA’s March 2026 Regulatory Priorities Wholesale Markets paper – comes as the regulatory body looks to reduce the complexity of some of its conflict of interest rules, to support firms across UK wholesale markets and ensure good practices and strong standards.
The FCA confirmed that it was reviewing its PFOF rules when contacted by The TRADE, stating that it “will set out any proposals for changes in due course.”
In a recent speech at the Goldman Sachs EMEA head of trading conference, Nikhil Rathi, FCA chief executive, alluded to potential changes to PFOF set to come into play.
Specifically, he stated that the FCA “wants to keep moving quickly and acting boldly, but the next phase is harder. There are some tough, contested points where different market participants have naturally different views and incentives,” referencing PFOF as one of these practices up for debate.
PFOF has frequently surfaced debates around conflict of interest between firms and clients, due to the incentive to execute client orders with counterparties based on commission and financial gain, creating potential execution outcome issues and consumer harms.
In a review published in 2019, the FCA confirmed that it would continue to engage with EU regulators on PFOF-related supervisory and policy issues, to achieve a “consistent international approach.”
Read more – Could European regulators be set to ease off on payment for order flow?
Currently, the EU holds a firm stance on PFOF, with a full ban on the practice for brokers in the EU set to come into effect from 30 June 2026, removing the temporary exemption for German clients from this date onwards.
Contrastingly, PFOF is an ongoing practice in the US, and is common with retail brokers, such as Robinhood receiving payment for routing client orders to market makers such as Citadel Securities and Virtu Financial.
Despite this, the practice is regulated by the US Securities and Exchange Commission (SEC), to ensure ‘best execution’ is obtained and the best possible price is secured for the client regardless of payment.