Trading system, multilateral, MTF (multilateral trading facility)

The facility – provided by an investment firm or another operator, – on which the wishes of individual principals in the purchase or sale of financial instruments pursuant to Section 1 (11) KWG are brought together, – without any decision-making leeway remaining with regard to the final conclusion of the transaction with a specific counterparty (a system, operated by an investment firm or a market operator, which brings together various third-party buying and selling interests in financial instruments in a special arrangement and in accordance with non-discretionary rules). However, bilateral systems in which the counterparty to the purchase or sale is always the same provider are not considered multilateral trading systems. Also not covered are advertising systems, which operate as an electronic bulletin board, as it were, and on which interested parties can publicly submit their trading wishes. According to the Markets in Financial Instruments Directive of the EU, such service providers are subject to extensive disclosure obligations. The operation of such a system has been considered a securities service in Germany since 2006. At the end of 2012, the German Federal Financial Supervisory Authority issued a separate fact sheet on the special organizational requirements for the operation of a multilateral trading system pursuant to Sections 31 f and 31 g WpHG. – See trading disclosure, trading system, alternative, market, organized. – See BaFin Annual Report 2006, p. 144 (competition with exchanges), BaFin Annual Report 2008, p. 152 f. (supervision; licensing issues for foreign MTFs), BaFin Annual Report 2009, p. 177 f. (the increase in alternative trading systems raises questions), BaFin Annual Report 2012, p. 64 (organized trading facilities to be aligned with MTF regulations), p: 177 (supervisory issues), BaFin Annual Report 2013, p. 95 (number of institutions; breakdown of licensing).

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
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