Reception and transmission of orders
Taking a client's order to buy or sell securities and passing it to another broker for execution needs an investment firm licence or a banking licence under MiFID II Annex I, Section A(1). The introducing broker's EU passport lets it market the service and aggregate client orders across every EEA state.
Definition
Receiving client orders in financial instruments and passing them to another firm for execution.
- MiFID II, Annex I, Section A(1): official text
Which licence you need
Licence families that typically permit this activity:
- IF · Abu Dhabi Global Market (ADGM)
Investment firm licence
Financial Services Permission for Dealing in Investments as Agent or Matched Principal (Category 3A)FSRA
- IF · Abu Dhabi Global Market (ADGM)
Investment firm licence
Financial Services Permission for Advising on Investments or Arranging Deals in Investments (Category 4)FSRA
- IF · Australia
Australian financial services licence (AFSL)
ASIC
- IF · Bermuda
Investment Business Licence
Investment Business Licence (standard licence, under the Investment Business Act 2003)BMA
- IF · Cayman Islands
Securities Investment Business Licence / Registered Person
CIMA
- IF · Cyprus
Cyprus Investment Firm (CIF) authorisation
CySEC
- IF · Czech Republic
Investment Firm licence
CNB
- IF · Dubai International Financial Centre (DIFC)
Investment firm licence
Financial Services Permission for Dealing in Investments as Agent or Operating an Alternative Trading System (Category 3A)DFSA
- IF · Dubai International Financial Centre (DIFC)
Investment firm licence
Financial Services Permission for Advising on Financial Products or Arranging Deals in Investments (Category 4)DFSA
- IF · Estonia
Authorisation as an investment firm
FI
- IF · Germany
Investment firm licence
BaFin
- IF · Hong Kong
Type 1 Licence for Dealing in Securities
SFC
- IF · Hong Kong
Type 2 Licence for Dealing in Futures Contracts
SFC
- IF · Ireland
Investment Firm Authorisation (MiFID II)
CBI
- IF · Italy
Investment firm licence (SIM)
CONSOB
- IF · Latvia
Investment firm licence
LB
- IF · Lithuania
Financial brokerage firm licence
LB
- IF · Luxembourg
Investment firm authorisation
CSSF
- IF · Malaysia (Labuan)
Securities Licensee licence
Securities Licensee licence (dealing in / advising on securities)Labuan FSA
- IF · Malta
Investment services licence (Category 1, 2, or 3)
MFSA
- IF · Mauritius
Investment Dealer Licence
FSC
- IF · Netherlands
Investment firm licence
Investment firm licence (Vergunning beleggingsonderneming) under Wft Article 2:96 and MiFID IIAFM
- IF · Poland
Brokerage House licence (dom maklerski)
KNF
- IF · Seychelles
Securities Dealer's Licence
FSA
- IF · Singapore
Capital Markets Services (CMS) Licence
MAS
- IF · Slovakia
Investment firm licence
NBS
- IF · South Africa
Financial Services Provider licence - Category I
Financial Services Provider licence - Category I (advice and/or intermediary services, non-discretionary, incl. crypto assets)FSCA
- IF · Spain
AV) investment firm licence
CNMV
- IF · Switzerland
Securities firm licence
FINMA
- IF · United Kingdom
MIFIDPRU Investment Firm Authorisation (Part 4A FSMA)
FCA
Where it can be licensed
Frequently asked questions
Can an order reception and transmission broker hold client money?
Only with an extra permission. A firm authorised solely for order reception and transmission can hold client money if it also holds the ancillary permission under MiFID II Section B(1). Without it, every client fund and security has to flow straight to the executing broker.
What disclosure rules apply when receiving payment for order flow?
MiFID II keeps a tight rein on payment for order flow. A firm transmitting client orders has to show that any routing arrangement or venue fee improves execution quality for the client, rather than creating a conflict of interest or weakening best execution.
Sources
- MiFID II Annex I, Section A(1) · retrieved 2026-09-24
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