Nasdaq on the future of technology and the exchanges

Long thought of as a global exchange company for buying and selling securities, Nasdaq has used its marketplace expertise and technology knowhow to leverage itself into a partner and provider for market structure, exchange and settlement guidance for markets of all types.

Scott Shechtman, Head of New Markets and President of Longitude at Nasdaq, was on hand to share Nasdaq’s vision as a technology solutions provider, data aggregator and market facilitator at Transparency19, a three-day freight technology conference taking place this week at the Georgia International Convention Center.

Through its 30 owned-and-operated marketplaces throughout the world, Nasdaq is able to take its experience at these exchanges and technology infrastructure and implement new technologies in more than 115 marketplace customers globally. Nasdaq provides technology services to trading platforms, enabling them to execute their core trading functions as well as market surveillance to detect patterns suggesting nefarious actions like insider trading. Additionally, Nasdaq acts as a clearing house in the Nordics as the guarantor of the trade by collecting deposits, analyzing the risk of the parties and establishing deposit requirements for each party in each transaction. Nasdaq also provides this type of technology to other organizations in the world to manage the ‘clearing’, delivery and payment functions within a transaction.

Nasdaq’s position as a technology provider, data collector and market administrator has allowed it to help other companies to create markets that once didn’t exist.

Blockchain technology allows Nasdaq to provide electronic voting in Johannesburg, helps to create a liquid secondary market for trading portions of risk from reinsurance pools in Bermuda, develop new wagering products and broaden betting menus in Hong Kong and allow cryptocurrencies to be tokenized allowing for better settlement, liquidity and exchange-based trading all over the world.

Nasdaq is currently working on projects with a digital advertising futures market and a travel booking secondary market. The company hopes to be able to help customers launch markets where bookings of hotels and flights can be traded, which it believes will alleviate the losses or defaults incurred on incorrect bookings.

In the transportation space, the company sees the need for a transportation capacity exchange where modal definite pre-bookings can occur with date of shipment and specifics on the type of capacity needed to be determined as the commencement date on the contract draws near. Nasdaq believes that any disputes in this type of system will be easily remedied because blockchain technology will act as the registry or detailed log book for the events that took place before, during and after the booking.

Data and technology help Nasdaq provide price clarity, improved settlement/clearance and liquidity, which helps to establish a marketplace for new goods and services. Nasdaq believes that this is the new technology-based disruption model that will gain mass in the exchange world in the years to come as previously poorly or non-traded goods and services have the means to be exchanged in a market with price clarity, liquidity and secure execution using blockchain technology and machine learning.

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Todd Maiden

Based in Richmond, VA, Todd is the finance editor at FreightWaves. Prior to joining FreightWaves, he covered the TLs, LTLs, railroads and brokers for RBC Capital Markets and BB&T Capital Markets. Todd began his career in banking and finance before moving over to transportation equity research where he provided stock recommendations for publicly traded transportation companies.

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