Operating an organised trading facility (OTF)
Running a discretionary multilateral trading system for non-equity instruments, bonds and derivatives among them, needs an investment firm licence under MiFID II Annex I, Section A(9). Unlike an MTF operator, an OTF operator can exercise discretion when routing orders and arranging negotiations between professional participants, and the licence passports across the EEA.
Definition
Running a multilateral system for non-equity instruments where the operator exercises discretion over order execution.
- MiFID II, Annex I, Section A(9): official text
Which licence you need
Licence families that typically permit this activity:
- IF · Cyprus
Cyprus Investment Firm (CIF) authorisation
CySEC
- IF · Czech Republic
Investment Firm licence
CNB
- IF · Estonia
Authorisation as an investment firm
FI
- IF · Germany
Investment firm licence
BaFin
- IF · Ireland
Investment Firm Authorisation (MiFID II)
CBI
- IF · Italy
Investment firm licence (SIM)
CONSOB
- IF · Latvia
Investment firm licence
LB
- IF · Lithuania
Financial brokerage firm licence
LB
- IF · Luxembourg
Investment firm authorisation
CSSF
- IF · Malta
Investment services licence (Category 1, 2, or 3)
MFSA
- IF · Netherlands
Investment firm licence
Investment firm licence (Vergunning beleggingsonderneming) under Wft Article 2:96 and MiFID IIAFM
- IF · Poland
Brokerage House licence (dom maklerski)
KNF
- IF · Slovakia
Investment firm licence
NBS
- IF · Spain
AV) investment firm licence
CNMV
Where it can be licensed
Frequently asked questions
Which financial instruments can be traded on an organised trading facility?
An OTF is restricted to non-equity instruments: government and corporate bonds, structured finance products, emission allowances and financial derivatives. Equities and exchange-traded funds cannot be admitted to trading on it at all.
How does operator discretion work on an OTF?
An MTF runs on a fixed rulebook, but an OTF operator can exercise discretion at two points: when deciding whether to place or retract an order on the facility, and when deciding whether and when to match two or more client orders.
Sources
- MiFID II Annex I, Section A(9) · retrieved 2026-09-24
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