Bloomberg Trading Facility Limited (BTF), an affiliate of Bloomberg, has received authorisation from the UK Financial Conduct Authority (FCA) to operate a multilateral trading facility (MTF).
The MTF draws on Bloomberg’s established trading venue capabilities in the creation of a platform for the execution of interest rate swaps (IRS) and credit default swaps (CDS) and will offer both request for quote (RFQ) and order book functionalities.
“Bloomberg’s MTF trading platform is a key addition to the portfolio of services we are providing our clients to enable them to meet their regulatory obligations, and will provide for a seamless transition into the MiFID II regulatory environment,” says Jean-Paul Zammitt, chief executive officer at BTF and global head of financial products services division at Bloomberg, in a statement.
Mifid II rules will introduce a new category of trading venue, called an Organised Trading Facility (OTF), tighter customer and product classification, and new guidelines on the use of derivatives which will be required to have sufficient liquidity and be traded on eligible platforms or multi-lateral trading facilities (MTFs).
This has brought some discrepancies of opinion in the structured products market as some believe the regulatory regime in both OTC and non-OTC markets obscures the process of defining what activities are acceptable to execute away from transparent venues. Regulators are pushing for an on-exchange type approach while the industry is asking for a distinction between OTC and non-OTC, taking into account the distinction between execution and intermediation as an initial categorisation, before other subcategories such as OTF and MTF are applied.
Bloomberg’s MTF is the latest market solution to “supporting clients in the evolving regulatory environment”, which includes an existing multi-asset class swap execution facility (Bloomberg SEF) and a swap data repository (BSDR).
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