5.II.4.1 General

MiFID II wants to ensure that multilateral trading with respect to equity instruments is properly regulated.1MiFID II therefore introduces the obligation for investment firms that operate certain so-called internal matching systems to authorise as an MTF.2MiFID II notes that: ‘(a)n investment firm that operates an internal matching system which executes client orders in shares, depositary receipts, ETFs, certificates and other similar financial instruments on a multilateral basis must ensure it is authorised as an MTF (under MiFID II) and comply with all relevant provisions pertaining such authorisations’.3 In other words, MiFID II requires (a) internal matching systems that (b) execute client orders in equity instruments (c) on a multilateral basis (d) to be authorised as an MTF. Authorisation as an MTF results in the applicability of, among other things, the MiFID II equity pre-trade transparency regime.