Polish broker XTB is exploring systematic internalizer arrangements to reduce stock and ETF execution costs while maintaining its zero-commission trading model. Trading board member Filip Kaczmarzyk disclosed in a Friday interview that the firm currently routes all cash equity and ETF orders to regulated markets but is evaluating alternatives as these products grow within its revenue diversification strategy.
Under the systematic internalizer framework permitted by MiFID II, XTB could execute eligible client orders against its own inventory of liquid securities rather than routing every trade to an exchange. This approach could significantly lower execution expenses including exchange fees and commissions. Any implementation would require transparent pricing, non-discriminatory execution rules, and strict best-execution compliance under MiFIR regulations.
Kaczmarzyk provided no timeline or specifics on whether XTB would build internal capabilities or partner with external providers. XTB currently offers commission-free trading on stocks and ETFs up to EUR 100,000 monthly turnover. Trade Republic previously adopted similar internalization methods in July after Germany’s payment-for-order-flow exemption ended.
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FXnCO Insight
** Brokers pursuing systematic internalizer models may gain competitive pricing advantages, but traders should monitor execution quality disclosures closely as firms shift from exchange routing.
Source: Finance Magnates