A critical determinant of whether exchanges, central counterparties, and central securities depositories should be considered infrastructure institutions is whether they have market power. This chapter explores whether they do, specifically in the provision of trading, clearing, central register, and settlement services. It examines four general issues and provides some broad comments on the nature of market power. It discusses the key factors that lead towards consolidation of market power in each industry sector, and those that tend to promote competition and reduce market power. It then presents brief comments on the industry structure in practice in each of the three sectors. Finally, a range of generic propositions about the industry structure in each of the three sectors are articulated.
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