MTF is defined under MiFID, a European financial law, as "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"
MiFID lays out a number of obligations for an MTF:
- It must be pre-trade transparent (subject to certain exceptions);
- It must be post-trade transparent (deals published as close to real time as possible);
- Prices and charges must be public and applied consistently across all members;
- There must be a Rulebook advising how system works and how to apply for membership.