Multilateral Trading Facility (MTF)

Multilateral Trading Facility (MTF),

Definition of Multilateral Trading Facility (MTF):

  1. A multilateral trading facility (MTF) is a European term for a trading system that facilitates the exchange of financial instruments between multiple parties. Multilateral trading facilities allow eligible contract participants to gather and transfer a variety of securities, especially instruments that may not have an official market. These facilities are often electronic systems controlled by approved market operators or larger investment banks. Traders usually submit orders electronically, where a matching software engine pairs buyers with sellers.

  2. Multilateral trading facilities (MTFs) provide retail investors and investment firms with an alternative to traditional exchanges. Before their introduction, investors had to rely on national securities exchanges like Euronext or the London Stock Exchange (LSE). Faster transaction speeds, lower costs and trading incentives have helped MTFs become increasingly popular in Europe, although the NASDAQ OMX Europe was closed in 2010 as MTFs face intense competition with each other and established exchanges. MTFs operate under the European Union’s (EU's) MiFID II regulatory environment - a revised legislative framework to protect investors and instill confidence in the financial industry.

  3. A type of trading system whereby financial vehicles are exchanged between a number of different parties. Typically these financial vehicles are those that do not normally have an official market through which to be traded. The traders who use this type of facility usually submit their trading orders electronically through a system that helps in pairing the buyers with the sellers of these financial instruments.

How to use Multilateral Trading Facility (MTF) in a sentence?

  1. An MTF provides retail investors with an alternative platform to trade financial securities.
  2. MTFs typically offer more exotic trading instruments and OTC products.
  3. MTFs are known as Alternative Trading Systems in the United States.
  4. MTFs operate under the EU’s MiFID II legislative framework.
  5. Market operators and Investment banks usually operate MTFs.

Meaning of Multilateral Trading Facility (MTF) & Multilateral Trading Facility (MTF) Definition