Nasdaq's Strategy: Compliance and Growth Amid Market Volatility

Nasdaq's Regulatory Compliance Measures

Nasdaq leverages advanced technology and AI to simplify regulatory compliance, enhance market surveillance, and uphold marketplace integrity. Through events, newsletters, and strategic disclosures, Nasdaq ensures adherence to global regulations and SEC obligations, demonstrating a robust commitment to regulatory compliance.

"Nasdaq's industrial grade technology simplifies the complex challenges associated with regulatory compliance and we welcome the opportunity to partner with Bitvavo to support the development of its marketplace." --- (NDAQ, press release, 2024/07/31)

"As a major regulatory technology provider to the world's financial system, with a deep culture of innovation, Nasdaq is uniquely placed to leverage the power of technology to further enhance the tools and capabilities necessary to uphold the integrity of marketplaces globally. New AI Surveillance Capabilities In an effort to ensure market integrity and trustworthiness, international regulators require financial institutions to demonstrate the ongoing effectiveness of their surveillance systems and controls." --- (NDAQ, press release, 2024/05/15)

"At @Nasdaq's ESG in Capital Markets Event, Johanna Fager Wettergren, Swedbank's Head of Group Sustainability, discussed challenges in complying with the CSRD and preparing for regulatory changes." --- (NDAQ, Twitter, 2024/06/28)

"Regulatory Roundup, @Nasdaq’s monthly newsletter authored by Tony Sio, Head of Regulatory Strategy and Innovation is celebrating its 1-year anniversary, sharing the latest on global regulations and enforcements while also offering a comprehensive analysis of some crimes perpetrated within the financial ecosystem." --- (NDAQ, Twitter post, 2024/07/18)

"WEBSITE DISCLOSURE Nasdaq intends to use its website, ir.nasdaq.com, as a means for disclosing material non-public information and for complying with SEC Regulation FD and other disclosure obligations." --- (NDAQ, press release, 2024/07/25)

Impact of Market Volatility on Nasdaq's Operations

Nasdaq's operations have been significantly impacted by market volatility, leading to a decrease in U.S. equity derivative trading revenues and fluctuations in market share. However, the company has seen growth in cash equity trading revenues and overall market share, supported by modernized risk management technology and strategic initiatives aimed at sustainable growth.

"🚨 Volatility continues to roil energy and commodity markets. In a new article, @Nasdaq emphasizes modernized risk management technology in monitoring position limits across portfolios to mitigate risks amid ongoing market volatility. Read here: https://t.co/hBJfRtTsA9 https://t.co/mAkDVTLvF1" --- (NDAQ, Twitter post, 2024/07/16)

"The decrease in U.S. equity derivative trading revenues was primarily due to lower overall matched market share executed on Nasdaq’s exchanges, partially offset by a higher gross capture rate and higher industry volumes." --- (NDAQ, sec filing, 2024/Q1)

"In our Market Services division, we delivered revenue growth of 3%. We experienced healthy volumes across North America and Europe, and we achieved a sequential increase in North American options market share as well as growth in Nasdaq US equities on-exchange market share and capture." --- (NDAQ, earning call, 2024/Q2)

"During the annual Russell U.S. indexes reconstitution, Nasdaq successfully facilitated approximately 2.9 billion shares traded in 0.878 seconds across Nasdaq-listed securities, representing a record $95.3 billion dollars in market value. Nasdaq's performance was further enhanced by continued progress against its 2024 strategic priorities – Integrate, Innovate, Accelerate – positioning the company to capitalize on opportunities for sustainable, scalable, and resilient growth." --- (NDAQ, press release, 2024/07/25)

"Cash equity trading revenues increased in the second quarter of 2024 compared with the same period in 2023 primarily due to higher U.S. industry trading volumes, partially offset by lower overall U.S. matched market share executed on Nasdaq's exchanges and lower gross capture." --- (NDAQ, sec filing, 2024/Q2)

Nasdaq's Risk Management Strategies

Nasdaq employs a multi-faceted risk management strategy, leveraging global capabilities to assist clients, utilizing Gen AI for financial crime management, and investing in software to enhance collaboration and mitigate risks. Additionally, Nasdaq's purpose-driven approach promotes financial literacy and stability, further supporting their comprehensive risk management framework.

"And I think our ability at a global scale, on a global level to be able to help our clients manage risk in their trading books, in their treasury operations in their capital obligations, as well as also the managed risk in markets is just -- it's tremendous, honestly." --- (NDAQ, earning call, 2024/Q2)

"Learn more about how @Nasdaq's purpose-driven approach is helping to expand access to the necessary tools and resources, close knowledge gaps and provide culturally relevant financial education to create a more equitable financial landscape: https://t.co/kB1PRm5ca0" --- (NDAQ, twitter, 2024/04/30)

"Again, those are not Gen AI. If you go Gen AI, Financial Crime Management, which is that company I was mentioning as part of NASDAQ is already doing Gen AI and that reduces for client that doesn't use us when you combine that with other things we were doing." --- (NDAQ, conference, 2024/06/12)

"@Nasdaq's study reveals how investment in software helps improve organizational collaboration, mitigate risks, and meet sustainability goals: https://t.co/rU1rMzlBwu https://t.co/yNz8s07oSh" --- (NDAQ, twitter, 2024/07/12)

"@Nasdaq's study reveals how investment in software helps improve organizational collaboration, mitigate risks, and meet sustainability goals: https://t.co/bzOUruWm7N https://t.co/netJ3R6bJq" --- (NDAQ, twitter, 2024/06/27)

Nasdaq's Growth Strategies and Market Expansions

Nasdaq's growth strategies focus on evolving market structures, expanding technology partnerships, and shifting from retail to institutional indices. They anticipate 3-5% growth in market tech and trade management services, with significant expansions like upgrading the Indonesian Stock Exchange's platform to enhance resilience and support economic development.

"When it comes to market reforms, “it’s not about revolution; it’s about evolution.” Chuck Mack, @Nasdaq’s Head of Strategy & Market Structure for North American Markets, recently received the @marketsmedia Best in Market Structure Award for his insightful approach to market evolution. Read more: https://t.co/SgiCMBbFKa" --- (Nasdaq, Twitter, 2024/05/30)

"Looking forward to the full year 2024, we expect the combined market tech and trade management services to be well positioned within the 3% to 5% range with a muted second quarter and the growth being back-ended." --- (NDAQ, earning call, 2024/Q1)

"And I'd like to know a little bit about your growth initiatives, especially because, the NASDAQ indices have historically been viewed more at retail and how you're making that more institutional." --- (NDAQ, conference, 2024/06/12)

"⚡ Nasdaq is thrilled to expand our partnership with @IDX_BEI to upgrade its core platform to @Nasdaq's advanced matching engine, which will enhance the resilience and integrity of the exchange and the development of the Indonesian economy. Learn more: https://t.co/QnBvflAmFd https://t.co/gyBROgzFum" --- (NDAQ, Twitter, 2024/06/17)

"Technology partnership will further enhance overall resilience and integrity of the exchange, while supporting the rapid deployment of new products and services Scalable trading platform will quadruple transaction capacity and support development of Indonesian economy NEW YORK and JAKARTA, Indonesia, June 17, 2024 (GLOBE NEWSWIRE) -- Nasdaq (NASDAQ:NDAQ) and the Indonesia Stock Exchange (IDX) today announced an expansion of their technology partnership which will see IDX upgrade its core trading platform to Nasdaq's most advanced matching engine." --- (NDAQ, press release, 2024/06/17)

Technological Advancements Driving Nasdaq's Competitive Edge

Nasdaq's technological advancements, including partnerships with global exchanges like the Indonesia Stock Exchange and early adoption of cutting-edge technologies from NVIDIA, Microsoft, and AWS, are driving its competitive edge. Additionally, Nasdaq's Technology of the Future conference fosters innovation and collaboration, further solidifying its leadership in the financial technology sector.

"We believe this partnership will speed up the modernization advancement of the Indonesia capital market while supporting sustainable economic growth. IDX has experienced a period of rapid growth over recent years with trading volumes having increased 65% since 2019, while the total number of investors trading on its exchange has grown by over 400% to 12.6 million." --- (NDAQ, press release, 2024/06/17)

"🚀 @Nasdaq’s Technology of the Future 2024 conference held in Barcelona, Spain, brought together our community of global market operators, serving as a powerful forum to share ideas, learn from each other and build lasting partnerships that shape the technology of the future." --- (NDAQ, Twitter, 2024/06/14)

"And so we are well positioned at the start and we also viewed as innovative with, for example, the NVIDIA's and the Microsoft's and AWS and they view us as an early adopter, which enables us in turn to always be at the cutting edge." --- (NDAQ, conference, 2024/06/12)

"It has certainly become more competitive as well. And then there's 0 DTE, as you mentioned." --- (NDAQ, conference, 2024/06/12)

"https://www.valantic.com/fsa/electronic-trading About Nasdaq Nasdaq (NASDAQ:NDAQ) is a leading global technology company serving corporate clients, investment managers, banks, brokers, and exchange operators as they navigate and interact with the global" --- (NDAQ, press release, 2024/07/18)

Nasdaq's Competitive Positioning in a Volatile Market

Nasdaq's competitive positioning in a volatile market is bolstered by its proactive approach to potential future competitors, advanced Market Surveillance technology, diverse index products, and strategic initiatives. These elements collectively enhance its market share and financial resilience, despite external risks and uncertainties.

"competitive landscape, we're also thinking about the competitors we don't yet know of, that we have not yet seen, that haven't come to market yet." --- (NDAQ, conference, 2024/06/12)

"Such forward-looking statements include, but are not limited to, statements related the benefits of Nasdaq's Market Surveillance technology solution. Forward-looking" --- (NDAQ, press release, 2024/07/31)

"risks, uncertainties or other factors beyond Nasdaq's control. These factors include, but are not limited to, Nasdaq's ability to implement its strategic initiatives, economic, political and market conditions and fluctuations, government and industry regulation, interest rate risk, U.S. and global competition, and other factors detailed in Nasdaq's filings with the U.S. Securities and Exchange Commission, including its annual reports on Form 10-K and quarterly reports on Form 10-Q which are available on Nasdaq's investor relations website at http://ir.nasdaq.com and the SEC's website at www.sec.gov." --- (NDAQ, press release, 2024/04/25)

"And really looking at it from a hedging perspective. We have a whole range of index products beyond the NASDAQ 100." --- (NDAQ, earning call, 2024/Q2)

"Could you please talk about how it could impact your market shares and financials over time and how difficult it is for your client -- for your competitor to launch similar products? Thanks." --- (NDAQ, earning call, 2024/Q2)

Role of Partnerships and Collaborations in Nasdaq's Strategy

Nasdaq's strategy heavily relies on partnerships and collaborations to drive growth and innovation. Collaborations with entities like the UN Sustainable Stock Exchanges Initiative, Microsoft, and Citi enhance sustainable finance, unlock business insights, and prevent fraud, respectively. Nasdaq aims to deepen relationships with banks, positioning itself as a partner of choice.

". @Nasdaq Technology of the Future ‘TOF’ Talks: Accelerating sustainable finance Anthony Miller, Chief Coordinator at @UN Sustainable Stock Exchanges Initiative (@SSEinitiative) discusses the crucial role of carbon markets and voluntary carbon markets in accelerating sustainable finance worldwide." --- (NDAQ, Twitter post, 2024/07/16)

"Our collaboration with Microsoft allows us to unlock greater business insights, accelerate innovation and optimize operational excellence for our clients. A Nasdaq survey found board members are looking to technology for new ways to be more efficient and data-informed, with 84% of respondents indicating that they expected increased or sustained scrutiny and time requirements for board service." --- (NDAQ, press release, 2024/05/30)

""We are excited to collaborate with Nasdaq on innovative, AI-powered solutions to better serve its clients around the world," said Judson Althoff, executive vice president and chief commercial officer at Microsoft." --- (NDAQ, press release, 2024/05/30)

"Fraud continues to grow in scale and complexity. Michael Steinbach, Head of Global Crime Prevention, Personal Banking and Wealth Management at Citi shares how Citi’s partnership with @Nasdaq Verafin is crucial in preventing fraud and protecting Citi's customers from scams. https://t.co/sxCrKvsrqR" --- (NDAQ, Twitter post, 2024/05/14)

"Right now, we touch the banks in a very specific way, but we would like to touch them in many ways so that we elevate ourselves to be not just a trusted vendor, but a partner of choice, somebody that the C suite of banks is connected to." --- (NDAQ, conference, 2024/06/12)

Future Outlook and Strategic Direction for Nasdaq

Nasdaq's future outlook is centered on strategic initiatives like Integrate, Innovate, and Accelerate, supported by the One Nasdaq go-to-market strategy and capital allocation for growth and leverage reduction. Significant inflows into the index segment underscore the strategic focus on expanding market presence.

"Approximately 500 investors and analysts participated in Nasdaq's 2024 Investor Day, where Nasdaq highlighted its strategic initiatives of Integrate, Innovate, and Accelerate, introduced the One Nasdaq go-to-market strategy, and outlined its capital allocation priorities to support organic revenue growth and leverage reduction. AxiomSL and Calypso achieved 15% combined pro forma ARR growth." --- (NDAQ, press release, 2024/04/25)

"And so I would contract the strategic from the tactical in that segment. In terms of the then going into index, that's a place where we've seen close to $200,000,000,000 of inflows in the last 5 years that has really continued" --- (NDAQ, conference, 2024/06/13)