ESMA_QA_2557
Status: ✅ Answer Published
Link to ESMA Q&A tool: https://www.esma.europa.eu/publications-data/questions-answers/2557
Regulatory Context
Regulation : MIFIR
Level 1 Regulation: Markets in Financial Instruments Regulation (MiFIR) Regulation (EU) No 600/2014 - Investor Protection and Intermediaries
Level 2 Regulation: No information available
Level 3 Regulation: No information available
Topic: Inducements
Subject Matter: Investment firms’ use of rebates and discounts to lower fees for clients under the payment for order flow (PFOF) prohibition
Question
Submission Date: 03 June 2025
Under Article 39a of Regulation (EU) 2014/600/EU (MIFIR), are investment firms allowed to use rebates and discounts on the transaction fees of execution venues to lower fees for clients?
ESMA Answer
Answer Date: 03-03-2026
Answer provided by the European Commission Yes, investment firms are allowed to use rebates and discounts to lower fees for clients but only where they comply and are able to demonstrate their compliance with all of the following conditions set out in Article 39a(1) of MiFIR: (a) the rebate or discount on the transaction fees of execution venues is permitted under the approved and public tariff structure of the relevant trading venue in the Union or of the relevant third-country trading venue;(b) the rebate or the discount exclusively benefits the client and not the firm;(c) they do not result in a monetary benefit to the investment firm Disclaimer: The answers clarify provisions already contained in the applicable legislation. They do not extend in any way the rights and obligations deriving from such legislation nor do they introduce any additional requirements for the concerned operators and competent authorities. The answers are merely intended to assist natural or legal persons, including competent authorities and Union institutions and bodies in clarifying the application or implementation of the relevant legal provisions. Only the Court of Justice of the European Union is competent to authoritatively interpret Union law. The views expressed in the internal Commission Decision cannot prejudge the position that the European Commission might take before the Union and national courts.
This document was automatically extracted from the ESMA EMIR Q&A database.