Trade Republic has overhauled its trade execution infrastructure just two days after the EU’s payment-for-order-flow ban took full effect for German brokers on June 30. The Berlin-based firm, which serves over 10 million customers managing more than €150 billion in assets, now operates a best-price algorithm that compares real-time quotes across liquid exchanges and executes orders at €1 per trade. Customers can also select specific venues like Xetra or Nasdaq for €2 per transaction.
The timing reflects regulatory necessity. Germany was the sole EU state using a temporary PFOF exemption, which has now expired. Trade Republic previously generated less than 30% of revenue from the practice, which allowed brokers to collect rebates from market makers for order routing. Under the new model, Trade Republic executes orders against itself as principal rather than routing directly to exchanges, representing a fundamental shift in how European neobrokers monetize retail flow.
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FXnCO Insight
** European retail brokers are rapidly transitioning to explicit fee models, signaling higher execution costs for retail traders and potential margin pressure across the neobroker sector.
Source: Finance Magnates