Multilateral Trading Facility
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A Multilateral Trading Facility enables multiple parties (e.g. retail investors or other investment firms) to buy and sell a variety of financial instruments including shares, bonds and derivatives. [1] These systems can be crossing networks or matching engines that are operated by an investment firm or a market operator. This is done within the MTF operator's system.
The Markets in Financial Instruments Directive (MiFID), which also sets the rules for Regulated Markets and investment firms in Europe, provide MTFs with authorization conditions and regulatory requirements. MTFs, such as Chi-X and Turquoise, sprang up in the wake of the MiFID regulations, which came into force in April 2004. [2]
According to MiFID rules, entities trading with financial instruments must be organized as either a regulated market or a multilateral trading facility. Different standards apply to each. The financial instruments traded on an MTF are not subject to the strict rules that apply in the regulated market.[3]
References
- ↑ Multilateral Trading Facility. Investopedia. Retrieved on August 24, 2010.
- ↑ Suitor in approach to Chi-X. FT. Retrieved on August 24, 2010.
- ↑ "Slovakia: Multilateral trading facilities. International Financial Law Review. Retrieved on September 11, 2008.
