Skip to content
  • Home
  • About
  • Contact
  • Page
  • ​Master SEO Tactics
  • Top 9 Finance News Websites Ranking
wikifx

wikifx

  • Home
  • About
  • Contact
  • Page
  • ​Master SEO Tactics
  • Top 9 Finance News Websites Ranking
  • Toggle search form
  • Vestmark appoints Michael Blundin as CEO forex news
  • TP ICAP Finance announces indicative results of its tender offer for notes due 2024 forex news
  • ASIC Issues Warning about SMSFs and Crypto Investments forex news
  • SEC wants BTIG to drop claims about disgorgement of ill-gotten gains forex news
  • StanChart adds Mary Huen to Group Management Team forex news
  • IG Group shareholders approve all resolutions at AGM forex news
  • Moscow Exchange appoints Andrey Selyuk as its CFO forex news
  • FINRA fines Deutsche Bank securities arm $2M for best execution violations forex news

Saxo urges regulators and brokers to review PFOF practices

Posted on 2021-12-09 By admin No Comments on Saxo urges regulators and brokers to review PFOF practices

Adam Reynolds, CEO Asia Pacific, Saxo Capital Markets, is urging brokers and regulators to review the practice of Payment for Order Flow (PFOF).

Mr Reynolds says:

“As more people participate in global capital markets, brokers have a real duty of care to their clients and we believe that it is time for regulators in Asia and the brokerage industry to review such practices and collectively work towards protecting the interests of retail clients”.

Payment For Order Flow (PFOF) is the compensation a brokerage firm receives for directing orders to a particular venue for trade execution. The brokerage firm receives payment, usually fractions of a penny per share, as compensation for routing the order to a specific market maker.

The most common criticism of Payment For Order Flow is the fact that a broker is receiving fees from a third party without a client’s knowledge. Such payments incentivise the broker to route its orders to a particular venue, which naturally could be considered a conflict of interest. The broker may choose to send the order to the venue offering the highest payment to the broker rather than the best execution to the client.

Most recently, the European Commission has taken steps to follow the Australian Securities & Investments Commission (ASIC)’s position in banning the practice of Payment for Order Flow (PFOF), to circumvent the emergence of Payment For Order Flow arrangements. This is a critical move that is set to level the playing field for investors and bring more transparency, so that clients know they are not selling their flow to market makers.

For many low-cost brokers offering zero or low commissions on equity transactions, Payment For Order Flow is a major source of revenue. This practice could cause a conflict of interest between broker and client as the brokerage firm might be tempted to route orders to a particular market maker for their own benefit, rather than seeking a best execution price for the investor, their client.

Saxo notes that investors who trade infrequently or in small quantities may not feel the impact from this practice. However, frequent traders and those trading large volumes should aim to understand their broker’s order routing system to make sure that they’re not losing out on price improvement due to their broker prioritising PFOF.

Saxo comments:

“At Saxo, we do not use or receive Payment For Order Flow (PFOF). Saxo executes equity orders using smart order routing (SOR) technology, which sources liquidity from multiple venues, including regulated exchanges and MTFs, to optimise execution rates and fill ratios”.

SOR is an algorithm which automatically compares execution prices for any given buy or sell order. It avoids conflicts of interest by discovering best available prices and routing traders’ orders to the venue offering best execution independent of Payment For Order Flow.

forex news Tags:forex-news

Post navigation

Previous Post: Victims of trading scheme ROFX.net face opposition to class action complaint
Next Post: New Zealand FMA lifts suspension of AxiCorp licence

Related Posts

  • Exclusive: Capital Index promotes Trevor Barwell to CEO forex news
  • FCA orders 84 promotions to be amended or withdrawn in Q2 2021 forex news
  • Swedish regulator imposes SEK 14 million fine on ClearOn forex news
  • LME to implement extra measures as Ring reopens for trading forex news
  • London Capital Group Cyprus fined €40K by CySEC forex news
  • Barclays takes Plaid to Court for trademark infringement forex news

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Recent Posts

  • EUR/USD Holds Near 1.05 as Fed, ECB Policies Shape Market Sentiment
  • Gold Prices Hold Steady Amid Global Economic Uncertainty
  • Australian Dollar: How RBA Policies, Commodity Prices, and Global Tensions Are Shaping the AUD’s Market Performance
  • EUR/USD: Understanding the Currency Pair’s Trends
  • USD Under Pressure: Navigating Economic Data and Global Uncertainties

TAG

Axiory Review 2022 B2B B2Broker News Basic Forex Knowledge broker brokers brokers in the UK Brokersview Broker tools CFDs coin News cryptocurrency Cryptocurrency News Crypto News dogecoin FCA news finance forex forex-news Forex Broker Forex Brokers Forex Demo Account Forex market forex news forex scams forex time Forex trading fx fxtrader fxtrading Global Forex Gold Analysis HotForex InstaForex LiteForex Review 2022 markets work MT4 MT5 news OctaFX Review Samtrade FX South Africa trade Forex traders Trading Forex
  • wikifx View:Is AvaTrade A Trusted Broker? forex news
  • CME Group announces first trades for 20-Year US Treasury Bond futures forex news
  • Malaysia SC Updates Investor Alert List forex news
  • RoboMarkets sponsors Eintracht Frankfurt forex news
  • Equiti Group appoints Waleed Saleh as Global Head of Market Research forex news
  • FINRA fines E*TRADE for deficiencies in detecting potentially manipulative trading forex news
  • eToro data shows Bitcoin holds top spot among most traded cryptos forex news
  • ICE marks record MICRO NYSE FANG+ Index futures trading volume forex news

Copyright © 2025 wikifx.

Powered by PressBook News WordPress theme