US Equity Market Structure Primer

Efficient and resilient market structure is key to sustaining investor confidence and participation underpinning the equity markets. In this primer from SIFMA Insights, we provide an overview of equity market structure, including:

  • Drivers of Market Volumes
  • Evolution of the Market Landscape
  • Market Shares Across Exchanges and Off-Exchange Venues
  • Order Routing
  • US Cash Equities and SROs
  • The Evolution of Equity Market Regulations
  • Where We Stand Today
  • The History of US Stock Exchange and Market Events

Executive Summary

The U.S. equity markets are the largest in the world, representing around 38% of the $85 trillion in global equity market cap, or $32 trillion.

On average, around 6.7 billion shares are traded on U.S. equity markets every day. The U.S. equity markets continue to be among the deepest, most liquid and most efficient in the world, with investors enjoying narrow spreads, low transaction costs and fast execution speeds. There is also plenty of opportunity for price improvement, especially for retail investors.

That said, one can always strive to improve. Efficient and resilient market structure is key to sustaining investor confidence and participation underpinning the equity markets. The goal of regulators and market participants is to promote market resiliency and ensure the U.S. equity markets continue to benefit investors and play an essential role in capital formation.

SIFMA Insights Primers

The primer series from SIFMA Insights goes beyond a typical 101-level brief, breaking down important technical and regulatory nuances to foster a fundamental understanding of the marketplace and set the scene to address complex issues arising in today’s markets.

See our full series here.

Authors

SIFMA Insights

Katie Kolchin, CFA
Senior Industry Analyst

Equities

T.R. Lazo
Managing Director, Associate General Counsel

Wes Althoff
Associate, Assistant General Counsel

Efficient and resilient market structure is key to sustaining investor confidence and participation underpinning the equity markets. In this primer from SIFMA Insights, we provide an overview of equity market structure, including:

  • Drivers of Market Volumes
  • Evolution of the Market Landscape
  • Market Shares Across Exchanges and Off-Exchange Venues
  • Order Routing
  • US Cash Equities and SROs
  • The Evolution of Equity Market Regulations
  • Where We Stand Today
  • The History of US Stock Exchange and Market Events

Executive Summary

The U.S. equity markets are the largest in the world, representing around 38% of the $85 trillion in global equity market cap, or $32 trillion.

On average, around 6.7 billion shares are traded on U.S. equity markets every day. The U.S. equity markets continue to be among the deepest, most liquid and most efficient in the world, with investors enjoying narrow spreads, low transaction costs and fast execution speeds. There is also plenty of opportunity for price improvement, especially for retail investors.

That said, one can always strive to improve. Efficient and resilient market structure is key to sustaining investor confidence and participation underpinning the equity markets. The goal of regulators and market participants is to promote market resiliency and ensure the U.S. equity markets continue to benefit investors and play an essential role in capital formation.

SIFMA Insights Primers

The primer series from SIFMA Insights goes beyond a typical 101-level brief, breaking down important technical and regulatory nuances to foster a fundamental understanding of the marketplace and set the scene to address complex issues arising in today’s markets.

See our full series here.

Authors

SIFMA Insights

Katie Kolchin, CFA
Senior Industry Analyst

Equities

T.R. Lazo
Managing Director, Associate General Counsel

Wes Althoff
Associate, Assistant General Counsel