U.S. Market Structure: Is This What We Asked For?

Abstract

The U.S. equity markets have dramatically evolved over the last decade. The evolution has been fueled by the rapid advance of technology, changes to market structure, increased competition among traditional and non-traditional market exchanges, changes in the regulatory framework, and a lack of coordinated oversight from regulators. Although trading in financial markets has changed substantially with the growth of new information processing and communications technologies, many of the issues centered on the fiduciary responsibility of providing best execution remain unchanged. Regulation and market structure have also changed. This article examines the current state of the U.S. equity markets. It explores how changes to market structure and regulation over the years have led us to where we are today and questions, Is this really what we asked for?