Multilateral trading facilities and organised trading facilities

Find out what permissions you'll need to apply to us for authorisation, how much you'll need to pay and what we expect to see in your application.

Multilateral trading facilities (MTFs) and organised trading facilities (OTFs) are types of businesses that operate trading facilities or venues, similar to recognised exchanges.

MTFs and OTFs facilitate the arranging and execution of transactions in financial instruments on a ‘multilateral system’, which means any system or facility in which multiple third-party buying and selling trading interests in financial instruments are able to interact.

MTFs An MTF is an investment firm or market operator that operates a multilateral system in accordance with non-discretionary rules.

An OTF means a multilateral system which isn't a regulated market or an MTF, and in which multiple third-party buying and selling interests in bonds, structured finance products, emission allowances or derivatives are able to interact.

In contrast with how an MTF operates, order execution must be carried out on an OTF on a discretionary basis.

Before applying to us for authorisation you need to read this page, our page for all wholesale markets firm applicants and our how to apply page for all firms.

Defining your users

It's important to be clear on how you refer your users.

Users of an:

  • MTF are defined as members, not clients or customers
  • OTF are clients, not members

When your firm is looking to select its permissions, your 'client types' will likely be professionals and eligible counterparties.

Permissions you'll need

Typically, these are the permissions required:

  • operating a Multilateral Trading Facility (MTF) – A8 MiFID Investment Activity
  • operating an Organised Trading Facility (OTF) – A9 MiFID Investment Activity
  • making arrangements with a view to transactions
  • arranging deals in investments
  • dealing in investments as agent
  • dealing in investments as principal (an OTF may apply a match principal limitation)

Application fee

Your fee falls into Category 8, which will be £50,000 (or £25,000 to vary your permission).

Find out more about your application fee, including how to pay.

Prudential requirements

Refer to MIFIDPRU (our prudential sourcebook for MiFID investment firms) to determine what Own Funds Requirement and K-factors you need for your business model.

If your firm satisfies all the conditions of MIFIDPRU 1.2.1 R it will be classed as a small and non-interconnected (SNI) firm, meaning the Permanent Minimum Requirement (PMR) is £150,000.

If you're an OTF dealing on your own account without a limitation, you'll be classed as a non-small and non-interconnected (non-SNI) firm, meaning the PMR is £750,000.

What to include

Before submitting your application through our Connect system, make sure you've prepared:

Page updates

: Information changed Minor amendment to the application fee section