A Multilateral Trading Facility is part of Europe’s modern market structure, created to increase competition with traditional stock exchanges. Instead of relying on a single centralized venue like the London Stock Exchange or Euronext, MTFs offer an alternative platform where trades can take place under transparent, regulated conditions.
MTFs match buy and sell orders automatically based on price and time, just like an exchange. The difference is that they’re typically run by investment firms, brokers, or banks rather than a national exchange operator. They create more choice, tighter spreads, and often lower trading costs for participants. MTFs were introduced through MiFID to make markets more competitive, efficient, and accessible.
These venues handle stocks, ETFs, derivatives, bonds, and even more complex instruments. They’re popular with institutions that want fast execution, deep liquidity, and modern electronic infrastructure. By operating alongside traditional exchanges, MTFs help create a more dynamic and interconnected European trading ecosystem.
MTFs matter because they increase market competition, improve execution quality, and reduce trading costs. They make markets more efficient by offering additional venues for liquidity and price discovery.
Traditional exchanges are central marketplaces with listing requirements, governance rules, and broader regulatory obligations. MTFs don’t list companies—they simply provide a venue for trading existing assets. They’re usually operated by banks or financial firms rather than national exchange groups. While both must follow strict MiFID rules, MTFs offer more flexibility, faster innovation, and often lower fees.
MiFID aimed to break the monopoly of traditional exchanges and improve competition. Before MiFID, many European markets relied on a single exchange for trading. MTFs were created to give investors more choices, reduce costs, and encourage technological innovation. By allowing multiple regulated venues to compete, MiFID increased transparency and liquidity across Europe’s financial markets.
MTFs attract a wide range of participants—including high-frequency traders, institutional investors, and brokers—which leads to tighter spreads and deeper liquidity. Their electronic matching engines often process orders faster than traditional venues. With more liquidity pools to choose from, traders can compare prices and find better execution across multiple venues, improving overall market efficiency.
Platforms like Cboe Europe and Turquoise are well-known MTFs. An investment firm trading shares of a European company may execute part of its order on Euronext and another part on an MTF like Turquoise to take advantage of better pricing or faster execution.
