The European Union’s ban on payment for order flow (PFOF) — codified as Article 39a of MiFIR — took full effect on 30 June 2026, ending one of the most contested practices in European retail investing. From this date, no investment firm operating in the EU can receive any fee, commission, or non-monetary benefit in exchange for routing retail client orders to a specific execution venue.
The ban closes the final exemption. Germany was the only EU member state to invoke a transitional opt-out when the original MiFIR revision passed; that exemption expired simultaneously on 30 June 2026. For years, German neobrokers — most visibly Trade Republic — relied on routing orders through Lang & Schwarz and collecting PFOF as part of the economics that supported a €1 flat trading fee.
Trade Republic moved ahead of the deadline. In January 2026, it obtained a BaFin licence to operate a Multilateral Trading Facility (MTF) — its own in-house trading venue. Under the MTF model, Trade Republic matches trades internally rather than routing to a third-party venue, which means it is not receiving PFOF from an outside party. The €1 flat fee per trade remains in place for now; the real test will be whether execution quality and pricing remain competitive as the MTF scales.
For Revolut and N26, which offer stock and ETF trading as secondary features, the PFOF ban accelerates a shift toward disclosed commission structures. Vivid Money, which charged a €1 flat fee per stock trade and relied on order-flow revenue, faces a structural reassessment of its investing economics.
The wider market implication is a levelling of the execution-quality playing field. Under PFOF, order routing was influenced by rebate size rather than best execution. The ban is intended to ensure retail investors receive genuinely competitive fills — though critics note that wider bid-ask spreads may emerge as venues recalibrate their economics without PFOF subsidies.
What it means for users: neobank trading fees may rise modestly as PFOF revenue disappears from the economics. Trade Republic’s MTF is the most prepared; monitor its fee schedule over the next two quarters for changes. If you are a cost-sensitive investor using Revolut or N26 trading, compare execution costs against dedicated broker alternatives.
Source: https://theindustryspread.com/eu-pfof-ban-mifir-article-39a-june-2026-vs-us-uk/