Multilateral Trading Facility - MTF

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DEFINITION of 'Multilateral Trading Facility - MTF'

A trading system that facilitates the exchange of financial instruments between multiple parties. Multilateral trading facilities allows eligible contract participants to gather and transfer a variety of securities, especially instruments that may not have an official market. These facilities are often electronic systems controlled by approved market operators or larger investment banks. Traders will usually submit orders electronically, where a matching software engine is used to pair buyers with sellers.

BREAKING DOWN 'Multilateral Trading Facility - MTF'

Multilateral trading facilities offer retail investors and investment firms an alternative venue to trading on formal exchanges. Additionally, MTFs have less restrictions surrounding the admittance of financial instruments for trading, allowing participants to exchange more exotic assets.

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