For many people, the “infrastructure institutions” in financial markets are the exchanges, central counterparties (CCPs), and central securities depositories (CSDs) that provide the trading, clearing, settlement, and sometimes other core functions for cash and derivative markets. There are, however, also many reasons why the definitions of an infrastructure, an exchange, a CCP, and CSD are all quite opaque. This is important, as the identification of a particular organization as one of these types of institutions can have significant commercial, regulatory, and policy consequences. This chapter aims to provide some basic insights into the definitions and nature of an infrastructure, an exchange, a CCP, and a CSD; and explores the reasons why these concepts are sometimes ambiguous and controversial. The first section considers the meaning and nature of what is an infrastructure. The second provides some comments on the definitions and nature of exchanges, CCPs, and CSDs, and on the functions they deliver. Brief conclusions are offered in the last section.
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