Will a crackdown on PFOF stop brokers from hedging to related parties or taking a share in the book from their LPs?
PFOF triggered ESMA’s concerns on a few key MiFID II requirements, namely, best execution (Article 27), conflicts of interest (Article 23), inducements (Article 24(9)), and cost transparency (Article 24(4)). The purpose of these requirements are to protect retail investors.
