The evolution of distributed energy resources (DERs) at the distribution level has created opportunities to contribute to present and future power system operations. Implementation of DERs contributes to several goals like low-carbon power generation, improvement in system resiliency, and satisfying overgrown load demand. However, in attaining these goals, it is vital to analyse the interconnection of transmission and distribution systems. It requires the participation of DERs in the Wholesale Electricity Markets (WEM) operated by independent or regional system operators. The integration of DERs at the transmission level is an evolving area of research. Many countries have implemented several DER integration models and regulations for this paradigm. This review summarises the concept of FERC Order No. 2222, which initiated the participation of DERs in WEM, the Framework for DER integration into WEM, the TSO-DSO coordination model, and challenges in this paradigm. Overall, this article gives a rich and valuable summary of how DERs can participate in WEM to help TSOs and DSOs work together, taking into account FERC Order No. 2222.