Trading facilities
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MiFID 2 Anatomy™
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Also known as an MTF, defined in the FCA handbook thus:
a multilateral system, operated by an investment firm or a market operator, which brings together multiple third-party buying and selling interests in financial instruments - in the system and in accordance with non-discretionary rules - in a way that results in a contract in accordance with the provisions of Title II of MiFID.
A multilateral trading facility is an electronic trading system that which brings together multiple third-party buying and selling interests to purchase and sell financial instruments (including those that may not have an official market). MFTs are often operated by established market participants such as investment banks. Orders will usually be submitted electronically and a software engine employing non-discretionary rules will be used to pair buyers with sellers. MTFs must meet certain other criteria prescribed by MiFID. Examples include as Chi-X and Turquoise.
Compare and contrast with regulated market (basically a conventional stock market like the LSE) and a systematic internaliser (an internal crossing system against principal flow in the books of a broker).
A subject of some interest is to what extent one needs a client's permission to handle orders outside a regulated market or mtf. See COBS 11.2.26 for more on that fascinating topic.
Under MiFID there is also an “organised trading facility” or “OTF”, but we can’t honestly be bothered writing an article about those. They are not regulatged marketsfor the purposes of MiFID, even though you do need MiFID authorisation to operate one.
Conduct of Business
This is an article about the FCA’s conduct of business rules, known by its chapter in the FCA Sourcebook, COBS, which implement, among other things, MiFID (directive 2004/39/EC (EUR Lex) and implementing directive 2006/73/EC (EUR Lex)).