Organized trading system
Organized trading system ( English Organized trading facility , OTF) is a legal concept from the exchange law , the one from a security service company , a securities company -run or a market operator trading system describes that the purchase or sale of certain financial instruments merges within the system so that, between the market participants a contract is concluded.
General
In highly organized electronic markets, the market operator provides the infrastructure that is required for an electronic market to emerge; To this end, he builds and operates an IT infrastructure himself or commissions third parties to operate it. The multilateral trading of financial instruments takes place through the regulated market , multilateral trading systems and organized trading systems. Organized trading systems are based on Art. 18 MiFID II and, in accordance with Section 2 (22) WpHG, belong to the trading venues like the organized market and the multilateral trading system . In contrast to the stock exchanges and multilateral trading systems, organized trading systems do not have trading participants but customers (Art. 20 (1) MiFID II).
The consolidation of matching customer orders ( English Matched Principal Trading ) is a transaction in accordance with Section 2 (29) WpHG in which
- an intermediary is interposed between buyer and seller who is never exposed to market risk during the entire execution of the transaction ,
- Buy and sell transactions are carried out simultaneously and
- which is concluded at stock exchange prices through which the agent - apart from a commission , fee or other remuneration disclosed in advance - makes neither profit nor loss.
Legal issues
According to Section 2 (8) No. 9 WpHG, the organized trading system is the operation of a multilateral system that is not an organized market or a multilateral trading system and that serves the interests of a large number of third parties in buying and selling bonds and structured financial products , Carbon credits or derivatives within the system in a way that results in a contract for the purchase of these financial instruments. Due to this exclusion definition, there are organized trading systems only outside of organized markets and multilateral trading systems for selected financial instruments, so that stocks and other equity instruments cannot belong to an organized trading system (Art. 4 (1) No. 23 MiFID II).
According to Section 48b (1) BörsG , the operation of an organized trading system on an exchange requires the written permission of the exchange supervisory authority . As the operator of an organized trading system, the exchange operator must take suitable precautions to prevent the execution of customer orders in the organized trading system using the operator's own capital or a member of the same group of companies (Section 48b (2) BörsG). The exchange supervisory authority can at any time request a detailed explanation from the exchange operator as the operator of an organized trading system, in particular when applying for authorization to operate , why the organized trading system does not correspond to a regulated market , multilateral trading system or systematic internaliser and cannot be operated in this form.
An operator of an organized trading system is only permitted to trade for its own account ( proprietary trading ) in accordance with Section 75 (3) WpHG, provided it does not involve the consolidation of customer orders within the meaning of Section 2 (29) WpHG and only in relation to public ones Debt instruments for which there is no liquid market possible.
application
The organized trading systems include the crossing networks of the major banks . Organized trading systems are not permitted to execute security orders against their own order book (except when trading in government bonds ). On the other hand, orders can be executed on a discretionary basis, provided that the pre-trade transparency requirements are met and the execution does not go against the interests of the customer.
Individual evidence
- ^ Bertold Heil, Online Services, Portal Sites and Electronic Shopping Centers , 1999, p. 67
- ↑ BaFin , Market Infrastructure and Transparency MiFID / MiFIR , lecture of February 16, 2017, p. 4
- ↑ Deutsche Börse Group, Trading Venues , 2019
