What is MTF?
MTF (Multilateral Trading Facility) within the meaning of the MiFID II Directive – is a multilateral system for trading in financial instruments, organized by investment firms or regulated market operators in accordance with rules predetermined by the operator of this system, within the framework of which the offers for the purchase and disposal of financial instruments interact in a way that results in the conclusion of the transaction. Apart from the requirements typical for investment firms, the provisions of the Directive impose additional criteria on MTF operators, which aim at ensuring a smooth and secure process of concluding and finalizing transactions.
MiFID requires MTF operators to provide the following:
- Total transparency of trade (‘pre and post-trade transparency’),
- Transparent and predefined operating principles, including procedures,
- Guaranteed fair and orderly turnover,
- Clear criteria for specifying financial instruments that may be traded,
- Clear criteria of access to the system for potential users,
- Access to reliable information owing to which it is possible to make an appropriate investment decision,
- Appropriate technical security and contingency plans to ensure a high level of user safety,
- Mechanisms to ensure smooth and correct settlement of transactions.