As the advent of nearly ubiquitous information infrastructures, such as Internet, promotes the development of electronic commerce applications, new market intermediaries are emerging which bring significant changes in the economics of marketing and distribution channels by interposing themselves between suppliers and consumers in electronic marketplaces. These new market intermediaries provide IT infrastructure, such as user interface, electronic product catalogues and search mechanisms, to enable buyers and sellers to realize commercial transaction over computer networks. The central claim of this paper is that the provision of IT alone is not likely to create trustworthy electronic marketplaces, and that institutional policies and processes must be an important part of electronic intermediary services for wholesale markets. The institutional policies and processes regulate responsibilities and duties of market participants and terms of settlements, and legitimate all transactions made over computer networks, thus reducing new transaction risks involved with electronic commerce. By using an in-depth case study of A UCNET, this paper highlights the importance of the institutional policies and processes for electronic intermediary services in wholesale markets, and suggests various implications relevant to the analysis, design and implementation of successful electronic