MTFs (Multilateral Trading Facilities) are a MIFID Europe concept, defined as "a multilateral system, operated by an investment firm or a market operator, which brings together multiple third-party buying and selling interests in financial instruments - in the system and in accordance with non-discretionary rules - in a way that results in a contract in accordance with the provisions of Title II of MiFID."
This broadly fits with the SEC's definition of an exhange, which is "any organization,association, or group of persons that: (1) brings together the orders of multiple buyers and sellers; and (2) uses established, non-discretionary methods (whether by providing a trading facility or by setting rules) under which such orders interact with each other, and the buyers and sellersentering such orders agree to the terms of a trade.", and some business such as BATS are listed regulated as an MTF in Europe and an Exchange in the USA.
Having said that, you'll find a lot of literature that consider and ECN and an MTF to be equivalent.
So what's the practical difference?
LMAX runs a single order book with binding orders. There's no last look by price providers, no opporunity to re-quote, and no routing around a network of possible counterparties to find a price. As a result a customers ability to hit an advertised price is only constrained by competition and the laws of physics, offering reliable and consistent order execution.
There's nothing to stop an ECN from operating in the exactly same way as LMAX, but many ECNs do offer price routing, last look etc, adding a degree of unpredictability to order execution. The regulatory constraints on an ECN are also less clear because it depends on what exemptions they've agreed and what level of market share they've acquired. There's much less negotiation around the regulatory requirements for an MTF.
LMAX ensures client funds are segregated and protected from their own business activities at all times. As a regulated entity LMAX is fully compliant with the FSA Client Assets Sourcebook. LMAX holds client trust accounts at RBS and JP Morgan Chase and also holds a client trading accountwith the London Clearing House .LMAX確保在任何時候客戶的交易資金都和公司的運營資金隔離存放，並受到保護。 作為FSA監管的正規公司，LMAX完全按照金融監管機構的客戶資產管理手冊CASS的要求運 行，將客戶資金存放在蘇格蘭皇家銀行或者摩根大通銀行的客戶信託賬戶上，同時為客戶在 歐洲清算所LCH Clearnet持有一個交易賬戶。 Deposits/Withdrawals存取款 Client deposits via bank transfer or credit/debit cards, are routed directly to segregated client trust accounts at either RBS or JP Morgan Chase. 客戶可以通過銀行轉賬、借記卡或者信用卡直接將資金存放到蘇格蘭皇家銀行（客戶匯款的 國家西敏寺銀行NatWest屬於蘇格蘭皇家銀行集團的銀行之一）或摩根大通銀行的隔離的客戶 信託賬戶上。 Withdrawals are debited directly from the client trust account to the client bank account or third party payment service provider. 取款時候，直接將客戶資金從客戶的信託賬戶轉到客戶的銀行帳戶上或者提供支付服務的提 供商。 Margin/保證金 To the extent that client money is encumbered for the purposes of covering the margin requirement on an open position, LMAX under CASS is allowed to transfer these funds to their clearer to cover their own margin obligation on the back to back trade. All transfers are directfrom the client trust account to a client trading account at the LCH. Similarly upon release of margin by the clearer, it is returned directly to LMAX client trust accounts. 在客戶的資金只用來擔保客戶未平倉位的情況下，客戶資產管理手冊CASS允許LMAX將資金 轉移到清算所，以提供該客戶所持倉位所需保證金。所有轉賬都必須從客戶的信託賬戶直接 轉移到該客戶在LCH清算所的賬戶上。一旦清算所中倉位關閉，保證金直接轉移回客戶在 LMAX的信託賬戶上。 Where the LMAX margin obligation with their clearer is larger than the aggregate gross margin requirement across all clients, LMAX will cover the shortfall directly from its corporate funds. This can occur where LMAX's client margin rates are lower than the margin rate charged to LMAX by itsclearer. 在LMAX客戶交易槓桿高於清算所所提供槓桿的情況下，LMAX在清算所的保證金要求可能大 大高出所有客戶的總保證金總和。在這種情況下，LMAX會直接使用公司的運行成本來支付該 差額。 Profits&Losses/盈虧 The LMAX trading day runs from 17:05 EST to 17:00 EST. All realised profits and losses are either credited or debited to/from the client trust account on a T+1 working day basis. All open positions are marked to market eachday and LMAX credits the net profit, or deducts the net loss directly to the client trust account, again on a T+1 working day basis. Dividends are credited or debited (long/short) on the same day as applied to the account statement. LMAX交易日計算時間從美國東部時間17:05至第二日的東部時間17:00。所有已實現盈虧會在 下一個工作日記入客戶的信託帳戶或從中扣除。所有未平頭寸會每天按市場價計算，在下一 個工作日直接從客戶信託賬戶中貸記淨利潤,或扣除淨虧損。交易產品如有股息，會在記賬同 日轉至信託賬戶中或從賬戶中扣除。 Charges/費用 Commissions are charged at the time of trade and funding is applied at the end of day (NON FX) or next day (FX). 佣金在交易當時收取。交易外匯產品所支付的手續費會在下一個工作日從信託賬戶上扣除； 交易非外匯產品所支付的手續費會在交易日結束當日扣除。 Reconciliation/對帳 Client trust accounts are reconciled on a daily basis to ensure that funds transfers have been completed correctly and client's cash entitlement is held in segregated client trust accounts. 我們會每天對客戶信託賬戶進行對賬，確保資金轉賬手續完整，所有屬於客戶的資金都被正 確地存放在隔離的客戶信託賬戶中。