XTB Explores Systematic Internalizer Model to Maintain Zero-Commission Trading

XTB is evaluating systematic-internalizer arrangements for stock and ETF execution as a way to preserve its zero-commission offer, according to comments from Filip Kaczmarzyk, the broker's board member for trading, reported by Finance Magnates. In a Biznes Info interview, Kaczmarzyk described how filling eligible client orders against the firm's own book — rather than routing every ticket to a venue — could compress exchange, commission and ancillary costs while keeping the commission-free pitch intact. For us, the development reads less as a pricing headline than as a signal of how European brokers are rebuilding the execution plumbing around best execution, conflict controls and post-PFOF economics.

What the regime actually demands

Under MiFID II, a systematic internalizer is an investment firm dealing on its own account on an organized, frequent, systematic and substantial basis when executing client orders outside a regulated market, multilateral trading facility or organized trading facility. MiFIR layers concrete obligations on top: publish quotes in shares and ETFs during normal trading hours, apply transparent and non-discriminatory execution rules, and satisfy best-execution standards. The framework is not a license to set price — it is a transparency-and-conduct regime with real operational weight. Kaczmarzyk did not say whether XTB would register as a systematic internalizer itself, connect to an external provider, or adopt a different structure, and offered no implementation timetable.

Pricing context and the competitive field

XTB currently charges no commission on real stocks and ETFs up to EUR 100,000 (roughly $117,000) of monthly turnover; above that threshold, a 0.2% commission with a EUR 10 minimum applies, and a 0.5% margin applies to relevant currency conversions. Kaczmarzyk said the firm has no plans to restore standard commissions. The economic case for internalizing is straightforward — absorb execution costs internally rather than pass them through — but sustainability depends on inventory turnover, hedging precision and the spread capture that an SI-style setup can generate on liquid names. Trade Republic changed its execution model in July, shortly after Germany's exemption from the EU payment-for-order-flow ban expired, aggregating prices from 30 exchanges and executing against its own account by default, with a EUR 2 fee for clients who select a specific venue such as Xetra, Euronext, NYSE or Nasdaq. Scalable Capital has leaned on a subscription tier to fund low-cost trading. PFOF and systematic internalization are not interchangeable — PFOF pays a broker to route orders to a third party, while an SI fills qualifying orders against its own book under a separate transparency and conduct framework — but the underlying pressure on European retail broker economics is shared.

What to watch

Two signals will tell us whether XTB moves from exploration to execution. First, any formal structural change disclosed to the KNF — the Polish Financial Supervision Authority fined XTB PLN 20 million (roughly $5.5 million) in a March decision concerning client onboarding, target-market controls, risk information and conflicts tied to a promoted-instrument list between 2022 and 2023, a sanction that did not concern internalization or the cash equity model now under review. Second, a concrete timetable and clarity on whether execution will be internalized, outsourced, or run on a hybrid basis. Until then, the zero-commission headline holds; the spread width on liquid European equities and ETFs is where execution quality will actually print.