FSA Guidance on the Practice of PFOF

On 14 May 2012, the FSA published guidance on payment for order flow (“PFOF”) arrangements. These are arrangements where a broker receives payment from market makers in exchange for sending order flow to them. Firms should manage conflicts of interests and tell customers about the PFOF arrangements and put relevant procedures in place to make sure that payments led to better service. Orrick’s Client Alert. Finalised Guidance.