MiFID II Review Takes Effect, Tightening CFD Broker Oversight

The European Union’s overhaul of its financial markets framework under the MiFID II / MiFIR Review has now taken effect. As of 29 September 2025, all Member States were required to transpose the revised MiFID II directive provisions into national law, complementing the MiFIR regulation changes that have been phased in since March 2024.

For CFD brokers, a sector long scrutinized for its retail-facing high-risk products, this marks the beginning of a stricter regulatory environment. Investor protection measures, transparency rules, and conduct requirements are no longer on the horizon. They are now enforceable obligations.

MiFID II/MiFIR Reforms and Key Features

The review is a core component of the EU’s Capital Markets Union, introducing reforms to strengthen transparency, investor safeguards, and market efficiency. Key features now in effect include:

• Consolidated Tape (CT): ESMA is in the process of appointing consolidated tape providers for bonds and equities/ETFs, with the first services expected in 2026. This system is designed to centralize trade data across EU markets and lower data fragmentation.
• Designated Publishing Entity (DPE) Regime: Investment firms can now assume responsibility for publishing OTC trades without SI registration, with ESMA maintaining a public DPE register.
• Best Execution Reporting Simplification: RTS 27/28 reports have been abolished, with execution quality information expected to flow via the consolidated tape instead.
• Ban on Payment for Order Flow (PFOF): PFOF is prohibited for retail and elective professional order flow. Some jurisdictions allowed transitional use until mid 2026, but most brokers have already terminated such arrangements.
• Pre and Post Trade Transparency Reform: Dark trading is capped under a new single volume cap. OTC derivatives and equity Systematic Internalizers (SIs) face broader disclosure duties, while post trade transparency now extends further into the OTC space.
• Commodity Derivatives: Position limits are narrowed to critical contracts only, easing burdens for less significant markets.

Together, these reforms create a tighter rulebook that reshapes how CFD brokers execute, report, and market their products.

Source: Finance Magnates Intelligence

Supervisory Scrutiny: Regulators are expected to initiate thematic reviews and inspections in late 2025 and 2026. CFD brokers that failed to update policies, reporting systems, or marketing materials are at risk of fines. Such intentions were announced by, among others, the German BaFin and the Cypriot CySEC.

Data Accuracy: Early indications suggest transaction reporting quality remains uneven, with NCAs flagging errors in OTC trade reporting.

Client Communications: Firms that reduced leverage or removed certain products have faced client pushback, requiring careful communication strategies

At this stage, your CFD brokerage should already have:

• ✓ Eliminated PFOF and updated order execution and conflicts of interest policies.
• ✓ Established APA connections for trade reporting and tested transparency workflows.
• ✓ Revised marketing and client onboarding practices to avoid inducements and misclassification.
• ✓ Conducted product governance reviews and documented target market justifications.
• ✓ Trained staff on the new obligations and rationale.

Firms still catching up must treat remediation as urgent. Supervisors are unlikely to accept “work in progress” explanations this far past the deadline.

Now that the MiFID II / MiFIR review is in force, CFD brokers must shift from preparation to sustained compliance and remediation. Practical strategies include:

Below are two potential real-life problems that companies subject to MiFID II / MiFIR Review may encounter. The names of products, services, and businesses are fictitious.

The post–29 September 2025 landscape is unforgiving. For CFD brokers, compliance with MiFID II / MiFIR is no longer about planning, it is about demonstrating, with evidence, that rules are applied in practice.

• Firms that embraced early compliance are already operating smoothly.
• Those that delayed now face remediation, supervisory audits, and potential enforcement.
• Case studies show that conflicts (PFOF), transparency (APA reporting), and marketing (client classification) are the most immediate pressure points.

The message from EU regulators is clear: the grace period is over. MiFID II / MiFIR review compliance is now the baseline standard, not a future goal.