New trading definition will force broker transparency

Author: | Published: 9 Dec 2010

A new definition of what constitutes a trading facility could mean that any brokers offering an electronic platform will be subject to increased transparency requirements and internal controls.

As well as reassessing the division between official exchanges and multilateral trading facilities (MTFs), the European Commission review of the Markets in Financial Instruments Directive (Mifid) is also proposing to add an entirely new category of trading venue, referred to as organised trading facilities (OTF).

This is designed to acknowledge those facilities operated by brokers and bank that bring together buyers and sellers that look like mini-MTFs, and which the legislators think should be subject to similar regulation.

This would catch, for example, those banks that operate electronic trading...