The full form of OTF is Organised Trading Facility.
Organised Trading Facilities (OTFs) are multilateral trading venues operating within the European Union. These venues enable third parties to trade various financial instruments, excluding equities. Common instruments traded on OTFs include:
- Bonds
- Derivatives
- Structured finance products
- Emission allowances
Key characteristics of OTFs:
- Multilateral Trading: They involve multiple buyers and sellers interacting within a defined system.
- Non-Equity Focus: Unlike stock exchanges, OTFs do not facilitate the trading of equities.
- European Union Regulation: OTFs operate under the regulatory framework established by the EU.
In essence, OTFs provide a regulated platform for trading specific types of financial instruments, contributing to market transparency and efficiency within the European financial system.
