The Exchanges

Q the morning or some crazy event happens in the world? God forbid a terrorist attack or a hack or something. And now we've all got to wake up at three in the morning and decide, do we trade or not? Was that the resistance to this? And then how do you Justify it like, hey, it's gonna be worth the fact that none of us are ever gonna sleep again.

A Yeah. So, so I think, first of all, I've been at, I started at NASDAQ in 1993, and back in the nineties, we had a vision to go to 24 seven markets, and we just couldn't achieve it both technologically, it wasn't, the technology wasn't there to do it, but also, regulatory. And, and part of, a big part of that was that resistance from the industry, saying, I like to be able to finish my day and go home. And actually, we need those points in the day. I mean, the market open and the market close will continue to exist in a world of 24 five markets. But you'll have, like, a US trading day, and you'll have non-US trading day. And so, and we already, our systems turn on at four, and they turn off at eight o'clock at night. Four in the morning, eight o'clock. Trading occurs during that entire period of time, but the official trading days of the United States are nine 34. I don't anticipate that changing, because we have to have those moments for, like, the navs to be set for mutual funds and things like that. But having, allowing the entire world to trade these securities, I mean, we have the Nasdaq itself, we have the top seven companies in the world listed on Nasdaq. So those companies are global. Investors have global interests. The Nasdaq 100 is one of the most traded products in the world. The futures trade, 24 or five, so why shouldn't the underlying? So that's how we look at tho…

AI assessment note: “a big part of that was that resistance from the industry, saying, I like”

Q Outside of the equity markets, the biggest liquid pools that are trading right now, whether it's the actual tokens or perps or what have you, or the crypto markets themselves, It would seem relatively logical that, um, you guys or others would want to play in that game, and, um, why don't you?

A Yeah, I mean, yeah, I think what's held us back is the lack of regulatory clarity. I, I say that Nasdaq is really good at operating regulated markets, and so you ask us to go into a completely unregulated space, that's a pretty different existence. The risk tolerance is much higher. Um, we want to make, I mean, we are always investor protection first, always. So how do we make sure that we create the right structure with fairness and equality for, for our investors while also being really big innovators? You know, we've moved our markets to cloud. We've kind of really brought forth a lot of modern technology into markets, but we also operate best when we have the rules of the road. What's happening now in Washington is the potential for rules of the road, and that gives us an opportunity to participate in a market that really has not been available to us.

AI assessment note: “what's held us back is the lack of regulatory clarity.”

Q to figure out a way to play that event with some equity trade. Does that, do the prediction markets actually kind of create a new way to express investment pieces that are kind of going to perhaps be a superset of the way we trade equities? Or are these just fundamentally different that owning an interest in a business is different than having a point of view on a thesis?

A I mean, I have to say the options markets are as much a prediction market as, uh, as the other prediction markets. So we own and operate the largest options marketplace in the United States. Um, and so we are really, you know, we're very engaged in looking at how do you think about you, you are making a decision as to the direction of travel in an, in an underlying equity, but you're not actually trading in the underlying equity. So Options are, I think, a great reflection of a prediction market. The difference, though, is that in a prediction market, it's a binary yes, no, versus an option market, you're laying, you're layering in your bets across multiple price points and different durations. There's, by the way, a million and a half strikes in the, in the options markets today. But, so it's, I think that in, in some ways, the prediction markets make these types of, um, These types of bets, you know, more accessible to more people, because the options markets are quite complex. Prediction markets are a little bit more simple. So there is an opportunity, and I think it's also good that the SEC and the CFTC, by the way, are joining forces to think about these markets much more comprehensively, because if we can bring that regulatory paradigm across the markets and make more, more of these kind of asset classes more accessible, I think that's good for everyone.

AI assessment note: “prediction markets make these types of... bets, you know, more accessible to more people”

Q central bank holdings that have shown dollar denominated, I think it was treasuries declining from 60 to 40%, gold going from 10 to 20% over just the last decade, with some acceleration perhaps underway. Obviously China's selling down treasuries. What's your view on where we are, um, with respect to spending, with respect to central bank interest in, in, in dollar denominated assets, and what that implies for our markets?

A Yeah, I mean, I think first of all, I am a huge believer in dollar as a reserve currency, and the fact we will be persistent as a reserve currency over a long period of time. I think our economy is just, it's such a powerhouse. Um, I think that the rule of law and the stability that we have, and that we deliver to the world, is going to continue to provide that anchor for, for the dollar to be the reserve currency. But, you know, uh, investors will express themselves if they see certain risks starting to manifest. I do think as we've, You guys talk about a lot. You know, the amount of debt that we have in the country is something that is, we're starting to see manifest itself in the markets, and we'll make it so that they look for alternatives if they feel like the return characteristics of a, of a treasury are different than what they could get in another, the risk weighted returns versus other currencies or other treasuries. They're going to express themselves. I, I believe in the U.S. I feel like I believe in the power of the U.S. economy to work its way through this. I believe that you guys talking about it a lot is actually going to help us. Make ourselves work our way through it.

AI assessment note: “investors will express themselves if they see certain risks starting to manifest”

Q Um, so how do you think about those opportunities and aggressively going after them right now? I, I take it you are invited into those and people hire you to do that, but what about making markets for an open AI share or SpaceX shares or Stripe shares?

A So I think the first thing we focus on in NASDAQ private market is being issuer first and how we work with Work with these private companies. So, you know, they are private companies and they're private for a reason. They want to have control over their shareholder base. Uh, and yet they want to create liquidity for their employees, their early investors, et cetera. And there is a second market that is created on the back of these private shares. So how do we work with them to allow that to happen in a fair way to make it so that we can introduce them to other, other investors that they want to have in their cap table? SPVs are a way to do that. You can roll up a lot of wealth Interests in a company and create an SPV through a known institution. And so the institution becomes the owner. Remember the, the, you know, the wealth clients are not actual owners of the shares. They're owners of the SPV that are owners of the shares, but letting the issuer have the, the ultimate decision on whether or not they invite those issues, those investors in, I think is actually really important in the private context, you know, and that's, that's kind of part of, I, I believe is what makes now that private market different. Than other providers in the private space is we always partner with the issuer.

AI assessment note: “we always partner with the issuer.”

Q get your reaction to this. You know, there's this very famous curve, which is like, you get this early font of insanity, and then there's the trough of disillusionment, and then you grow through, and it's, is it, does it seem like crypto is actually a blockchain? It's just, it's finally real. It's like, there's real companies doing real things, stable coins, what Sachs did with the Genius Act. It's,

A Well, I actually want to point to that because, you know, honestly, having regulators who want to, to work on bringing it into the mainstream and want to create the rules of the road is such a refreshing thing because I think that it allows us all to understand how we can operate within a world where there are tenants of investor protection. The technology is going to have things we can and can't do, but also being forward thinking and forward leaning and how the technology is going to be applied is going to be critical. The fact that we finally have this convergence of regulatory, of regulation between the traditional markets, the digital markets. How do we bring it all together to frankly advance all markets? And we're very, very excited about that.

AI assessment note: “having regulators who want to, to work on bringing it into the mainstream”