Can payment institutions offer FX hedging without a MiFID II licence?
According to the opinion of Advocate General Campos Sánchez-Bordona in Iulicris Recycling v Ibanfirst (C-339/25): yes. FX hedging that is closely linked to the execution of payments falls under the PSD2 licence, without a separate MiFID II licence. The Court’s judgment is expected in the third or fourth quarter of 2026.
Status · last updated 7 October 2026.
The AG says yes — PSD2 and MiFID II are separate regimes.
The sharpest answer so far to a question the payments sector has wrestled with for years.
PSD2 Article 18(1)(a) allows payment institutions to provide “operational and closely related ancillary services such as foreign exchange services”. The AG concludes that this provision is sufficient on its own: PSD2 contains no reference to the exemption conditions of MiFID II. The two regimes follow a different logic — PSD2 broadens what payment institutions may do, MiFID II limits the scope of regulated investment services. The purpose of Article 18 is precisely to avoid double authorisation where FX is functionally linked to payment execution.
Three FX forwards and a margin call.
A Romanian recycling company entered into three flexible FX forward contracts with the Belgian payment institution Ibanfirst to hedge its USD/RON exposure. When the margin calls mounted, the client argued the contracts were void: distribution of MiFID II financial instruments without an investment firm licence. The Belgian court asked the CJEU whether PSD2 Article 18(1)(a) is sufficient on its own. The case was first flagged in the Dutch payments sector by Emanuel van Praag.
Three changes if the Court follows the AG.
Flexible forwards can sit under the PSD2 licence, without a separate MiFID II licence as an investment firm.
For Dutch payment institutions it becomes sharper where payments supervision ends and investment supervision begins.
The AG addresses authorisation, not investor protection. Product governance is the logical next question for supervisors.
The judgment is expected in the third or fourth quarter of 2026. Use the time for an inventory of FX offerings and a decision tree for both outcomes.
Questions about FX hedging under PSD2.
Can payment institutions offer FX forwards without a MiFID II licence?
According to the AG opinion in C-339/25: yes, provided the FX service is an operational and closely related ancillary service to the execution of payments (PSD2 Article 18(1)(a)). As at 7 October 2026 the Court had not yet delivered its judgment.
What is Iulicris Recycling v Ibanfirst (C-339/25)?
A preliminary ruling case before the CJEU on whether a payment institution may offer flexible FX forward contracts under its PSD2 licence, or whether that requires a MiFID II licence as an investment firm. The Advocate General concludes that PSD2 suffices.
What should payment institutions and EMIs do now?
Take stock of which FX products you offer and how they relate to payment execution, and prepare a decision tree for both outcomes of the judgment — so you are ready whichever way the Court rules.