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Screenshot of a breaking news alert e-mail from Q2 2017
NASDAQ OMX Group, Inc. (NASDAQ:NDAQ) the global electronic trading exchange operator for capital markets has made it known for months that through their own efforts or through acquisition they’ve been interested in entering the electronic exchange traded forex business. We now learned today through a report conducted by Reuters that its own new platform is poised to be released sometime during 2016.
So why is NASDAQ, who is known for its equity exchanges so keen to enter the FX platform business? For one it is a lucrative busines as the largest traded market in the world. Secondly, regulatory demands could push some FX trading on exchange which NASDAQ would be set to capitalize on as one of the major industry players in exchange trading in other asset classes, thus they naturally posses the built in infrastructure and know-how to support another exchange venue as a complimentary business to its core equity exchanges.
NASDAQ states on their website: “The global FX landscape is changing as a result of regulatory and economic pressures affecting the full trade lifecycle: pre-trade, execution and post-trade. FX market participants in all jurisdictions are faced with the challenge of ensuring access to liquidity in order to achieve their trading needs, and to ensure their business models remain viable and profitable as disparate waves of regulation come into effect.”
As a big global operator, NASDAQ is positioned more than others to make an exchange traded platform a success. This will also make them a direct competitor to CME Group exchange traded forex products. This year, the FX industry has already seen a couple high profile mergers take. As covered here on LeapRate, the mergers included Deutsche Börse’s 360T acquisition and KCG unloading popualar forex ECN Hotspot to BATS Global markets… the dollars fetched (over $800m for 360T and over $350m for Hotspot) shows the high valuation that companies place on e-FX platforms. Although, NASDAQ won’t be entering FX exchange to potentially sell off one day but rather to expand operations and increase revenue for the publicly traded group.
NASDAQ OMX Group already has FX options instruments available on major currency pairs to compliment is impending new platform launch, options currently offered being: Australian Dollar, British Pound, Canadian Dollar, Euro, Swiss Franc, New Zealand Dollar, and Japanese Yen. All options are Dodd-Frank exempt and traded via Nasdaq PHLX which provides a fully transparent exchange market structure.
Showing its seriousness for FX, NASDAQ was a founding member of the recently established Foreign Exchange Professionals Association back in 2014, the Washington D.C based organization represents the collective interests of professional foreign exchange industry participants.
For more information on NASDAQ OMX Group’s FX offering, click here.