MiFID II introduces a new category of trading venue called an Organised Trading Facility (OTF) that will sit alongside Regulated Markets (RMs), Multilateral Trading Facilities (MTFs) and the amended scope of Systematic Internalisers (SIs). Only non-equity instruments, namely bonds, derivatives, emission allowances or structured finance products, will be eligible for trading on an OTF. Whilst firms are unable to operate both an OTF and act as an SI, the operator of an OTF may also operate a RM or MTF. Additionally, operators of OTFs will be prohibited from allowing the interaction of orders between two separate OTFs.
In this document we look at:
- consistency of application;
- market abuse and surveillance;
- robustness of operation;
- trading obligations - derivatives;
- pre-trade transparency; and
- specific requirements.