Nasdaq Inc.(Nasdaq:NDAQ) announced its Market Technology division has now launched its Nasdaq Financial Framework technology into the banks and brokers segment for complete outsourcing of trading infrastructure and operations, including regulatory reporting.
This new market infrastructure solution complements Nasdaq’s risk and surveillance technology offering, which, as the industry benchmark for trade surveillance, is leveraged by over 140 sell-side clients worldwide.
“With the Nasdaq Financial Framework, we are now able to extend the same exchange-grade technology and support used by our market operator clients to the sell-side, who are facing increased operational requirements and regulatory demands,” said Lars Ottersgård, Executive Vice President & Head of Market Technology, Nasdaq. “Our unique platform delivers technical scalability and flexibility along with the market operations expertise to support banks and brokers in running best-in-class technology while also focusing on growing their business.”
“Banks and Brokers have adapted their trading business models to the new regulatory requirements by sometimes offering a trading platform, whether an MTF, an OTF or a Systematic Internalizer (SI),” said Josephine Joséphine de Chazournes, Senior Analyst, Celent. “In this era of cost control they have also had to refocus their investments where the ROI is high and decided to outsource what others can do better or has become commoditized. The NFF platform can play a key role by offering Nasdaq’s market infrastructure technology to banks and brokers, including high end surveillance and regulatory reporting capabilities.”
Nasdaq Financial Framework for Banks & Brokers supports:
Systematic Internalizers: Continued regulatory pressure, specifically from MiFID II, has forced firms to determine their status as a Systematic Internalizer (SI). Under MiFID II, if firms’ activity exceeds certain thresholds, including equity and non-equity asset classes, they face additional regulatory obligations - including pre-trade transparency, quote and trade matching, best execution reporting and reference data reporting.
MTFs & OTFs: Swift transaction speeds, trading incentives and lower costs have contributed to the growth of popularity in MTFs and soon OTFs throughout Europe. Also under MiFID II, both MTFs and OTFs face additional regulatory obligations - including systematic execution, best execution, pre-trade transparency, post-trade transparency, transaction reporting and regulatory requirements.
ATS/Single Dealer Platform: Investment banks are facing enhanced capital requirements as a result of the changing regulatory agenda. Increased data quantities, fragmented liquidity and inadequate technology resources are placing more pressure on sell-side firms to fundamentally reappraise their existing technology capabilities, requiring constant reinvestment to remain competitive.
Algo & Routing Infrastructure: Continued proliferation of trading venues has caused increased fragmentation in liquidity - placing additional pressure on firms’ routing systems to ensure optimal execution. To this end, firms must ensure their existing technology capabilities are up to par, continually investing to keep an edge.
“In launching this new offering, the sell-side industry can now leverage the Nasdaq Financial Framework for a range of endeavors, including setting up and running a full-scale, multi-lateral trading venue to addressing regulatory obligations for internalization,” said Carl Slesser, Vice President, Market Technology, Nasdaq. “We have built the platform to enable these services to be both deployed in the cloud and in our data warehouses, which allows for flexibility in terms of initial capacity and growth based on individual client requirements.”
Nasdaq’s world-leading market technology powers more than 250 of the world’s market infrastructure organizations and market participants, including broker-dealers, exchanges, clearinghouses, central securities depositories and regulators, in over 50 countries with end-to-end, mission-critical technology solutions.