Curatia Analysis for Mon, Nov 18

How Nasdaq’s Track Record of Innovation Is Helping It Shepherd Markets into the Future  Sponsored

Jason Dibble Co-Founder, Editor in Chief

Since Nasdaq’s founding, it has provided investors the tools to unlock a better tomorrow, helping forge markets’ technological and financial foundations. In recent years, with forays into new geographies and asset classes as well as a successful push to make its technology the engine of global financial markets, Nasdaq has reaffirmed that commitment.

As markets enter a promising yet daunting new age of digitization, automation, and global reach, Nasdaq’s pioneering advances into AI, cloud computing, and carbon-trading markets, continue to light the way forward.

Foundations of Firsts

Nasdaq has burnished its credentials as a leader in modernizing markets through its growing presence across the financial ecosystem for over 250 years.

Even in the early days of the US’s first securities exchange, the Philadelphia Stock Exchange, later acquired by Nasdaq, links to the technological underpinnings of what would become the world’s most advanced financial markets were legion. The PHLX relied on a light-based signaling system running from New York City to Philadelphia to rapidly transmit market-moving information. The setup presaged the low-latency networks high-speed traders use today.

In 1971, Nasdaq’s move to offer the first electronic stock market transformed the world of floor brokers to complex, electronic trading systems facilitating transactions faster than the speed of light.

Other technological innovations include the exchange’s establishment of the first integrated derivatives trading and clearing system in Europe in 1991, and the 2000 launch of the first fully electronic options exchange in the US in Nasdaq ISE.

LEARN MORE: See the Catalog of Firsts That’s Established Nasdaq as the Industry’s Leading Light in Modernizing Markets

Enduring Presence

While many financial-technology firms restrict themselves to a particular locale to avoid the complexities of navigating regulatory, linguistic, cultural, and time-zone boundaries, Nasdaq boasts a robust presence globally, owning 18 markets across North America and Europe.

Its success in those markets has yielded invaluable experience in negotiating challenges of scale. Nasdaq’s US equities exchange is the nation’s largest and has bested its rival the New York Stock Exchange in IPO fundraising for five years running. The distinctions helped Nasdaq win Traders Magazine’s 2024 award for Best Global Exchange Group.

And unlike many exchanges that specialize in a single asset class, Nasdaq facilitates trading in a host of asset classes to meet investors’ needs, including equities, fixed income, FX, options, futures, and ETFs. Additionally, Nasdaq Private Markets unlocks investor access to high-growth, pre-public companies.

That breadth of experience gives Nasdaq access to a global community of more than 3,000 institutional clients encompassing banks, brokerages, asset managers, hedge funds, and market makers, as well as market-infrastructure providers, regulators, and retail investors.

Even so, Nasdaq’s broadest reach arguably springs from its unique role as a provider of market-infrastructure technology powering more than 130 exchanges, central clearing counterparties, and central securities depositories globally. Half of the world’s top 25 stock exchanges, 97% of global systemically-important banks, and 35 central banks and regulatory authorities use Nasdaq technology.

As a result, Nasdaq technology drives one in ten securities transactions worldwide — a validation of its market leadership in technology as strong as its ranking as the top provider of trading and matching technology by FOW International in 2022.

A universal presence in financial markets gives Nasdaq a unique vantage point that informs the exchange’s views on how markets are evolving in areas like promoting balance between innovation and caution in AI regulation and encouraging data sharing and collaboration between industry firms and regulators.

Shaping Markets’ Future

A long association with technology and a view of global financial markets uniquely informed by its broad reach place Nasdaq at the forefront of shaping markets’ future.

The exchange has embraced that charge as an early adopter of cutting-edge technologies that could unlock new levels of market efficiency. In the cloud space, Nasdaq forged a 10-year strategic partnership with Amazon Web Services (AWS) in 2022. The deal has already spurred the successful cloud migration of three exchanges, including the first-ever options exchanges in MRX and GEMX, with BX Options also slated to migrate in 2025.

Nasdaq has also emerged as an industry trailblazer in using AI to streamline market efficiency. In the last nine months alone, the exchange has released into production AI-based solutions for processing risk calculations up to 100 times faster with its Calypso platform and enhancing the quality, speed, and efficiency of market-abuse investigations as well as launched the first on-exchange AI-powered order type — Dynamic M-ELO.

In addition, the one-year anniversary of Nasdaq’s Adenza acquisition – made up of AxiomSL and Calypso - brought mission-critical risk management, regulatory reporting, and capital markets capabilities to Nasdaq and has helped elevate Nasdaq’s dialogue with clients as a strategic partner.

Collectively, that breadth of initiatives highlights Nasdaq’s commitment to leading financial markets into the future by responsibly exploring emergent trends and technologies, which Nasdaq has brought to markets for centuries. By giving investors the tools to build a better tomorrow, Nasdaq will continue to shepherd markets’ modernization for centuries to come.

LEARN MORE: How Nasdaq is Modernizing Markets to Meet Tomorrow’s Needs