Mahoney Paul, Rauterberg Gabriel. The Regulation of Trading Markets: A Survey and Evaluation

University of Virginia School of Law, 2017. — 56 p.The U.S. equity markets have undergone profound changes since the late 20th century. Electronic order books have almost entirely replaced manual floor- and telephone-based trading. New trading venues and order types have proliferated. Technology made these developments possible, but regulation has also had an important impact on the market’s structural features. This paper surveys market structure regulation and the issues it has raised, including high-frequency trading, non-displayed liquidity, and market centers’ fee structures, each of which has attracted criticism in the popular press and proposals or requests for comment by the Securities and Exchange Commission. We also discuss proposals for alternative market structures.