Market Structure Regulation
Rules governing who may operate a trading venue, how orders are matched and reported, and how customer assets and conflicts must be handled.
In regulated securities and futures markets, the functions of exchange, broker, custodian, clearinghouse, and market maker are performed by separate licensed entities, precisely so that no single firm can trade against its customers using their own assets. Many digital-asset platforms combine all of those roles in one company, which is the core issue that market-structure proposals address. Typical requirements include registration of the venue, segregation of customer property, order-handling and best-execution duties, recordkeeping, disclosure of proprietary trading, and system resilience standards. Readers meet the term in legislative debates, in enforcement actions against combined-function platforms, and in the differing rules that apply to spot venues, derivatives venues, and decentralized protocols.
En pratique
A registered futures exchange in the United States cannot also act as its customers' broker and custodian while trading for its own account against them; a single integrated digital-asset platform can, absent rules to the contrary.
Le malentendu courant
That market-structure regulation is about prices, when it is mostly about which roles a firm may combine, how conflicts are managed, and where customer property legally sits.