What is an MTF?

MTF stands for multilateral trading facility. This is an EU regulatory term for a financial trading platform that isn’t a traditional stock exchange. It enables investors to buy and sell a variety of shares, bonds and derivatives that might not have an official market.

Where have you heard about MTFs?

MTFs are an attractive alternative to the conventional exchanges for many investors because they don't have as many restrictions surrounding which stocks can be admitted for trading, allowing traders to exchange more 'exotic assets'.

What you need to know about MTFs.

With an MTF, you submit orders via an extremely speedy electronic system, where sophisticated software is used to pair buyers with sellers. Investors who make a high volume of trades can benefit from a faster execution of orders than a traditional exchange.

MTFs, which are designed to boost competition within the EU trading services market, are controlled by large investment banks or approved market operators. They do have to make their dealings transparent though, showing a price before a trade is made, and giving information about transactions, just like with conventional exchanges.

Find out more about MTFs.

Read our definition of stock market to find out how a traditional exchange differs from an MTF.