US Equity Market Structure

November 01, 2012

The US securities markets have evolved significantly over time, based largely on advancements in technology and intervening efforts by lawmakers and securities regulators. The US system of securities regulation was formulated in the early 1930s by the US Congress in an attempt to restore confidence in the financial system following a market collapse, bank failures, and widespread scandals. The US securities laws, however, have been modified on numerous occasions since the 1930s, generally in response to a crisis or the need to adapt to new technology and ideas.

There is no single financial system regulator in the US. Market participants may be part of holding companies that have affiliates which engage in many different types of activity. The holding company, as well as individual subsidiaries, may be subject to regulation by different financial system regulators, and will often face overlapping regulation. Nevertheless, the laws that most directly affect the day-to-day operations of securities exchanges and equity markets in the US are those enforced by the US Securities and Exchange Commission (SEC). This chapter provides an overview of the laws applicable to the markets and regulated market participants in the US.