hi everyone I'm Nicola tangin the CEO of the Norwegian so wealth fund and today we are thrilled to be joined by Aden fredman CEO of nastac now Adina transformed NASDAQ into a Global Tech Powerhouse and she's now one of the most influential leaders in global Finance so ad welcome well it's

nastac now Adina transformed NASDAQ into a Global Tech Powerhouse and she's now one of the most influential leaders in global Finance so ad welcome well it's

great to be here thank you so much n and welcome to NASDAQ well exactly because

I'm visiting you so I'm sitting here with a NASDAQ mug you know I'm feeling uh kind of part of something pretty pretty big but um we you start with the basic here so what is NASDAQ sure well

nasac of course is a world-class Market operator and we're extremely extremely proud of that Foundation yeah but as you

know we have expanded our business to become a global technology provider to the financial industry and we focused on

expanding our business in three key pillars and they all are kind of form the foundation of a good market so we've

got our liquidity pillar transparency and integrity and if you think about it

you need all three of those things to make for a worldclass capital Market but

as we've kind of become a technology provider and partner to our clients we've used those themes to really expand

our business on the cup I had here um it says NASDAQ rewrite tomorrow so what is tomorrow going to look like for Nasdaq

well tomorrow it we are now we're going from a market operator to a technology partner and over time we want to become

kind of what I would call an ecosystem partner to the world's Capital markets and the financial system so our vision

is to be the trusted fabric to the world's Financial system and that really does mean that we are not only here just

to be a software provider to our clients but to help them solve their problems in a more material ways how do we drive

from delivering software to delivering a a market ecosystem that makes the capital markets around the world more

efficient and effective how do we come become that risk management partner that really drives the banks to be higher

Integrity as well as more efficient so they can drive more liquidity into the markets those are the types of things

that we think about as we expand the business you say that you wanted to be a trusted partner and you for sure are

trusted by some very big companies right because is the five biggest companies in the world are listed on NQ the seven but

yeah the seven hey so you know you want to buy shares in apple Microsoft Amazon alphabet you basically do it on ndaq but

you also have a lot of people in Sweden how come how come yes in fact we own and operate the markets in the nordics other

than Norway um so Sweden Denmark Finland Iceland and the three Baltic countries

we own and operate those markets and we also have a market technology business where we provide technology to the

world's market so 130 markets um rely on us for their technology to run them to

run their markets and that's also operated out of Sweden why haven't you

go Norway uh that you know we wanted to have Norway you probably remember well

uh we decided to take a friendly approach with the Norwegian exchange and unfortunately there was another exchange

operator that tried to take a less friendly approach and they unfortunately won but we did try very hard to come in

as a friendly as a friendly partner to The noran Exchange does each country

need a so exchange it's a good question um I would say that each country wants

its own exchange and it's important to recognize when you're forming a country there are a few key pillars that really

underpin building a country you've got roads and transportation you've got education um and you have you have

airports and things to make it so people can come in and out of the country but you also have to have an economy and

when you look at the economy of a country it's really underpinned by the central bank and the exchange operator

and then the banking system and exchanges are kind of a critical pillar and they become kind of a national icon

to a country now does every country need to have its own exchange I would say in today's modern Capital markets you know

Capital flows are Global money moves moves seemlessly around the world but there are very local elements to

exchanges where they appeal to local innovators local market participants local investors and so there is a

benefit to having a country have its exchange but having it connected into a global ecosystem to to allow for more

Capital flows is what we think is the the future of markets some people are

moving the listings right so instead of being listed in in London for instance they won't be listed in the US because

they think they get better valuations how how does this work what is driving these differences in valuation between

countries well I think first of all having a listing in multiple countries has been a part of the markets for quite

some time the ADR prob American depository receipt or the gdr gdr which

is a global depository receipt I mean those are contracts that have allowed companies from other countries to go and

put a a second listing into a different country but more and more what we're

finding is it's not so much the ADR that's coming but the primary listing is moving and I think the reason why you're

seeing companies choose from outside the United States choose to move their primary listing to the United States is

really because today the the United States the markets are extremely liquid they're the most liquid in the world we

have the most Diversified investor base in the world so you have a really

healthy retail ecosystem in addition to an Institutional ecosystem in addition

to let's say hedge fund community and other you know other players that really

Drive Market liquidity and that allows companies to raise capit more

efficiently and we also have kind of a research ecosystem that allows investors

to understand these companies more deeply which then gives them more

confidence to invest and all of that is not by accident I mean that's been you

know the contract of the United States in terms of all the work we've done to

develop our markets um and The Innovation ecosystem is now playing to

our benefit I would point though to Sweden as being an anomalous and very

very positive story in Europe um and I really mean that and there's some great

there's some great um um anecdotes it's all uh they got great this is an amazing

amazing startup ecosystem great Innovation culture and a great Equity

Culture by their by their um their citizens so I was looking at the data

and 37% of people in Sweden have direct retail accounts um for equities for

domestic equities and so if you think about how empowerful that is inside an

economy where you have retail then you have a great pension system and they

deploy Capital into the market then you have Global flows you know Global

players who come in and participate in that market because we have a great

market system and you also have these tax advantage savings accounts that

encourage the citizenship to get involved in retail I mean in in invest

in investing in equities and all of that creates a combustion that again creates

a really great Market ecosystem in Sweden so it's possible to do this in

countries outside the United States for sure but it's a it's a lot of

ingredients that have to come together to create the right recipe if I start up

a company and it gets really big are you going to call me and I'll whether I want

to list on NASDAQ well is that how it works I would say that if you start a

company and it doesn't have to get really big we will call you up and ask

if you want to list on NASDAQ so we list companies of all sizes on NASDAQ and

we're very happy to have a startup come and earlier in their life and choose to

make their their stock available to you know everyday consumers and everyday uh

retail investors and then grow up as a company like you know when Amazon went

public many you know a couple decades ago they were worth $300 million and

they've grown up as a public company and done remarkably well in the public

market do all exchanges try to steal them away from you um you know it used

to be that there was kind of a a view that nasac was the home to smaller

companies but today nasc is home to the largest companies in the world and and

what happened was these companies would come to NASDAQ as small companies but

then they'd stay 52 years later we are now the home we have $3 trillion of

market cap listed on NASDAQ and we are home to both the the largest companies

in the world I would say that we're 30 trillion so and New York Stock

Exchange somewhere right around that so we're almost equal you know they're we

are really neck and neck now for um the market cap of the listed companies list

on NASDAQ versus New York and the fact is that once they got to NASDAQ we gave

them a home when frankly at the time because we were formed in 1971 and at

the time New York had rules that didn't allow these companies to list there so

we started as a tech innovator in our space we democratized access to the

capital markets for retail and we actually had listing rules that allowed

young Innovative companies to come before they were profitable and that was

a change in Paradigm in the United States they came so the first class of

companies that come to nzq Comcast Applied Materials Intel and and then a

really cool truck building company called packar th that was the first

class and they're still here they're all in the azac 100 and then we of course

attracted Microsoft and Apple and those companies came and then they stayed

because they realized that we gave them a home we gave them great service we

gave them a great market and and since then we've also become great partners to

them from a technological perspective at the same time um there are more private

companies than before now um it's partly because of private Equity but it's also

because many companies um choose to to stay private so why should companies go

public and have a listing instead of being private well I think we could have

a really good engage discussion about this Nikolai as a large asset owner

yourself as to how do you look at asset allocation across private and public and

how do you think about the public markets and what you're trying to

achieve in the public markets versus the private markets but I think that there

are structural in cyclical reasons why the the public markets are more or less

attractive to companies yeah but uh cyclically of course it's just a matter

of are public investors ready to underwrite risk in a time when you have

changing interest rate environment like we're having right now but more

structurally it's the question is are is the burden of being a public company

such that it makes it so that it becomes more attractive to remain private and

that's where we have to work with the government to think about the balance of

the regulatory balance between the responsibility of being a public company

and making your stock available to Everyday consumers and everyday retail

investors but also the the the ability for you to continue to drive your

strategy change you know and make changes and and continue to progress in

a way that is still attractive to to institutional um investors will you also

make money on private companies at some stage you think so we actually are

involved in private markets today in two ways the first is nasc private Market

which allows for private companies to seek liquidity periodic liquidity in

their stock so we can buy and sell companies even though they're not listed

on a exchange that's correct but you

have to be a qualified buyer or an Institutional buyer so there you know

it's a limited number of um investors who are have that available to them and

then also we support the asset manager and asset owner ecosystem but with our

tool called investment where we allow for asset owners to make smart asset

allocation Decisions by seeking out the asset you know the asset managers that

they find most attractive both public and private and so we do get involved in

the private markets in in those ways now there's been a trend over the last years

um towards high frequency trading right so extremely uh frequent trading you

know measure it in Nan seconds uh we do I suspect I I I I read that the light

travels only 30 m in a nanc so pretty uh pretty short period um now how does this

um how does this high frequency trading work yeah is it good for you is it good

for you I mean I would say that it's good for the system so I will say it

that way because what we look for with high frequency trading firms they really

are the modern market makers they're committing Capital into the market and

even if they're committing Capital into the market for a very short period of

time they are there to make it so that any given time you as an as an asset

owner or any asset manager or any retail investor can come in and put an order in

the market and get it executed instantaneously at any time and there's

price Discovery all the time meaning there's always a bit offer spread

available stock so you know exactly what you can where you can buy it and sell it

at what price that's what the high frequency firms provide to markets all

over the world and while they are doing it in in very small increments and

they're doing it in very short periods of time they are there constantly to be

that liquidity provider so they provide an important service and at the same

time they make money so you know of course they're going to make money in

terms of very small tickets and and kind of the the differences in the spread as

well as making it so that they're taking risk and they're getting rewarded for

taking risk something called Dark pools how do you work with them so the dark

pools actually compete with the lit markets yeah so that's a little bit

different right so I would say that they bad news well for you okay so the

financial industry we think they are good news yeah well the financial

industry is a world of coopertition yeah so I just need to say that like there's

no black there's no kind of bright lines here it's really a matter of finding

ways to work with everyone in the context and and basically working with

our clients where they are y so for dark pools NASDAQ

does compete for order flow from dark pools but we also provide technology to

dark pools so we actually do provide our trading systems and make those available

to dark pools if they want to partner with us and we will actually operate

those dark pools on their behalf as a technology provider but at the same time

we will compete with them to try to get the order flow onto the lit markets now

in the US and in Europe so in the Europe I would say about 50% of the trading in

Europe occurs in dark pools and internalizers and the same almost the

same in the US it's about 45% of the trading occurs in dark pools and in

internalizers so in a dark pool you don't really see who the buyer and the

set is I mean that's the challenge is that if you're an investor and you want

to understand what's the best price to buy and sell my stock the dark pools

don't contribute to that information because they're everything's happening

in the dark that's why they're called Dark PS and you have to be a very

sophisticated investor to gain access to them so we think that it's important to

make sure you're at least creating a competitive playing field that allows

the lit venues to compete on an equal basis with the dark pools to make it so

we can we can be the first place that you want to place that order and not

into the dark the fact that there is so much concentration in the market now you

know a few companies account for a huge proportion of the value of the so

exchange is that a is that a worry um I mean I would have to say that's just the

nature of the economy as it's kind of been progressing right you have these

huge companies that have really defined the future of our economy really in

terms of the technological innovation that they're underwriting the risk

they're taking the scale that they're providing to really under pin the future

of technology and they have therefore become very large parts of the economy

because the entire economy is becoming te technological yeah and so it's really

a n the natural progression of economy towards these

technological um phenomenon really I I think that at the same time there are

still 5,000 companies listed on NASDAQ so it's not like there are many many

companies that are innovators and change agents and people who are in every

single sector of the economy creating change driving new things bringing new

ideas into the market and also and or and are just very mature companies

operating in in every sector in the economy so I don't actually agree that

it's a bad thing it is the nature of econom the economy as it exists today

because technology is such a huge driving force of the E economy changing

t a bit here um so Adina you became CEO

in 2017 yes what does one do when one becomes the CEO of a big company how do

you approach it well I think first it's important to understand what you're

walking into so I I started at nzac as an intern 31 years ago yeah uh so I knew

the company very well whil you were at University uh right after yeah so um so

I knew the company very well coming into the role of CEO but you also have to

make sure that you're looking at with fresh eyes and understanding kind of

where where is the company at the time the second thing is is that I came into a

company that was very well-managed and and had a great foundation so it was I

had the fortune of coming into the seat and playing offense from day one yeah so

my first year as CEO we really focus on driving our strategy did you set a new

leader group when you came in um not when I not when I took um over as CEO

but in the Years progressing up till I became CEO I was able to develop the

team that I was able to have as CEO so the the prior CEO gave me the latitude

to say okay how do you want to form your team how do you want to make sure you've

got the right people in the right seats to take us forward and he and I work

together on making that happen so that I came in with a strong found

great business great team and then it was a matter of okay but how can we run

faster how did how long did you work together in a transition period I came

back to NASDAQ I had left NASDAQ to go and become the CFO of Carlile for three

years and I helped them go public and I came back in 2014 as president I became

CE in 2017 so we we work together almost three years yeah uh and that I think

quite long period right but it was I I had to prove myself when I got back it

wasn't like oh you're going to be CEO it was you could become CEO right you were

there other people at the same time who also could become CEO like was there was

it a race going on it was there was no race it was more just making sure that I

was ready so if you don't make a complete fool of yourself you'll be the

CEO or if I can show that I can really drive the company forward I can be the

CEO which I did I I like to think um so but this transition was very smooth I

mean it was kind of a textbook transition and so I took the job and the

first thing we did we had two strategic efforts right when I started one was

let's redefine the strategy of the company and two was let's really dive

into how can we Revitalize the US capital markets because again we were at

a period where we weren't getting a lot of IPOs and um the regulatory burden was

becoming quite onerous and so we wanted to make sure we were recalibrating the

markets but but the focus on strategy was a great way to engage the team right

off the bat you know so we know that we're a great Market operator but we

also knew that we had the ingredients to be a lot more so we took a a a kind of a

three-prong roach to evaluating the strategy one was what are the technology

trends that are going to redefine our industry in the next decade so let's

have conviction on that two was what are what are the industry trends that

are going to redefine our clients over the next decade so we know where do we

you know how do we want to align ourselves with that and three was what

do our clients think we're great at what do they think we're not good at and what

do they think where do they see us as a strategic partner so we took all of that

input and we brought it to the team and we said okay how do we redefine where

we're going going we had technology assets we were already providing

technology to other exchanges we were providing technology to corporates to

help them manage their lives in the public markets but it wasn't we weren't

a scaled player in that space we were a very Niche provider and we went out to

our clients they said you're really good at what you do you're a great Market

operator but here are my biggest problem so with banks it was dealing with a lot

of regulatory risk dealing with a lot of you know Capital risk and we've got a

lot to do in managing criminals out of our networks so then you bought quite a

few take that's right and then we also kind what kind of things did you buy so

in for that particular area of our strategy which we kind of look at as the

liquidity and the in the Integrity strategy um we focus in two areas one is

scaling up our Capital markets technology to be not only the best at

providing technology to other exchanges we also rewrote our entire trade life

cycle technology ourselves that we're now deploying to our clients but we also

we also scaled up in terms of being a great a great technology provider to

other exchanges and through the clipo which is through the Adena acquisition

the clipo product is a scaled risk management platform for all of the market participants in the

world and so it allows them to to manage their lives in the markets much more

successfully so that was one one part of our strategy the other part was we

bought verafin and axml also part of the adenda transaction to be a scale

provider of regulatory reporting and anti-financial crime technology um and

we we compl that with our surveillance technology so we now can help them

really manage all of the Integrity capabilities within the banks and

Brokers and all the capital markets Tech within the banks and Brokers and

exchanges that really make it so that they can get on the field successfully

and be successful so now the stock exchange bit is actually the division

where you make the least money which is quite interesting but um now this

company called verafin which is is a leader in anti-financial crime Solutions

yes and so I didn't know you had that before I started to read up on you why

are you fighting Financial crime how does that come into it yeah it's great

question so we had been uh we have been a provider of surveillance technology

for trading firms and for exchanges since 2010 and what that means is we

helped them root out Market manipulation and criminal activity within the markets

and within their trading firms and when we went and talked to them about what

could we do to expand and we did a complete strategic review of how can we

expand this business great business and it's growing really well it's a SAS

technology it's it's very modern so how can we make it so that we get bigger

there because it was just it's a very great segment for us to play in they all

said you know what we're really challenged with is anti-money laundering

and fraud within the banking system can you help us with that and we said okay

well that's good to know so we went back and we evaluated every single company in

the space of anti-financial crime and we actually came out with one name of one

company that we thought was the best in the business and by far the most

technologically advanced they had 2 200 clients they were very scaled in the

United States um but they hadn't yet reached the tier one and tier 2 Banks

and that's our that's where we were really strong so we knew we could

complement their capabilities and that's verin and they were not for sale um so

but you managed to buy them you yeah it yeah we did we we went to the owner we

talked to them we went to the firm we talked to them and at the end of the day

they saw us as the great a great partner because we they're growing you know 20

plus percent a year so they're just a fast grower incredible technology we

could learn a lot from them but they could learn a lot from us in terms of

how they go up Market is there a lot of crime in markets there's an enormous

amount of crime in the financial crime so they there's an estimate that there

is3 trillion that is laundered through the system the financial system globally

every year and half a trillion dollars that's lost to fraud every year and

that's that's globally in the US we kind of we zeroed in on the fraud the fraud

Challenge and in the United States there's $150 billion dollar loss to

fraud every year that if you think about that if we were able to recover all that

fraud and keep that in the in the right the right hands and to the hands to the

consumers that would increase our GDP by 50 basis points so we would you the GDP

of the country would be growing at a half% more if that that money wasn't

lost to fraud so w well we can need that in Europe well and then and in Europe I

think the unique element of the United States and why um verin been so

successful here is that there's a law that allows Banks to share um certain

information in order to fight crime so they can share it with a third party

they can't share it with each other we can share it with a neutral third party

we are that neutral third party so we have created a consortial data Lake made

up of all of the banks um transactions from across across 2500 Banks we get

about a billion transactions a week through that platform and we then apply

very Advanced AI algorithms to be better than anyone in rooting out criminal

behavior that then makes it so the banks could be more efficient fewer false

positives and more effective by showing them more F real positives to make it so

that their fraud program is much more effective same with AML it's a it's a

more more complicated problem but similar approach let's move on to you

and um kind of the leadership um now what kind of experiences during your

career have you had that you think have shaped your leadership style the most

well I had a couple um so the first was when I was 30 I became the head of the

data division so they had the company decided to reorganize we had a trading

Division and a listings Division and data set within the trading Division and

they decided to branch that out and make it its own division so we ended up with

three divisions at NASDAQ and when I was 30 they asked me to be ahead of it so

that was a big one uh and I had been running products so I've been running