Regulatory Alerts2023-05-16
Statutory Definition of Multilateral Trading Facility Operations Under the German Banking Act (KWG)
The Federal Financial Supervisory Authority (BaFin) issued this guidance notice to clarify the statutory authorization requirements for operating a multilateral trading facility (MTF) under Section 1(1a) sentence 2 no. 1b of the German Banking Act (KWG). The notice defines an MTF as a multilateral system that brings together the purchase and sale interests of numerous persons according to fixed, non-discretionary rules to conclude contracts for financial instruments, typically requiring a commercially organized business undertaking. It outlines key exemptions for organized market operators, specifies governance and notification obligations for both domestic and foreign entities, and establishes that cross-border operations targeting German residents remain subject to BaFin oversight.