On a regulated market, non-discretionary rules ensure that all orders are processed according to objective criteria, generally price-time priority. This means the order offering the best price is executed first, and at equal prices, the first order to arrive has priority. This mechanism is essential for ensuring market transparency and fairness.

EMIR aims to reduce systemic risks inherent to OTC markets by imposing the obligation to clear certain standardised OTC derivatives through central counterparties. This allows counterparty risks to be centralised and managed more efficiently, thereby improving overall financial stability.

MiFID II establishes a fundamental distinction based on the admission regime for instruments and members. Regulated markets, such as Euronext Paris, have strict admission and transparency rules, while MTFs, such as Euronext Growth Paris, offer a more flexible regime suited to small and medium enterprises with lighter transparency obligations. This distinction is crucial as it influences market access and compliance costs for companies.

OTC markets are characterised by bilateral transactions between two counterparties that directly negotiate the terms of the contract. This means each transaction can have unique characteristics in terms of price, volume, maturity or specific conditions, which contrasts with multilateral systems where orders are centralised.

Yes, transactions on a regulated market benefit from the guarantee of a clearing house, such as LCH SA for Euronext Paris. This guarantee ensures the successful completion of operations by interposing itself as a central counterparty, thereby reducing counterparty risk for market participants.

No, MTFs have a more flexible admission regime than regulated markets. For example, Euronext Growth Paris allows small and medium enterprises to access capital markets with transparency obligations tailored to their size, unlike the strict criteria of regulated markets such as Euronext Paris.

A multilateral trading facility (MTF) is a system that, without being a regulated market, facilitates the meeting of multiple buying and selling interests according to non-discretionary rules. MTFs offer a more flexible admission regime than regulated markets, making them accessible to small and medium enterprises with transparency obligations tailored to their size.

Regulated markets and MTFs share non-discretionary rules but differ in their admission regime. OTC markets are distinguished by their bilateral transactions without a central order book. Understanding these differences is crucial for choosing the right market for a transaction.