Over the last year to date, up 14%. Over

the last year, NASDAQ shares up 40%.

Over the 5-year period, more than

doubled, up over 100%. You've been on a

real tear.

>> She is often on the list of not just the

most influential women in finance, but

just the most influential. Adena

transformed NASDAQ into a global tech

powerhouse. Adena is a dealmaker at her

core. NASDAQ is in the business of

deals.

>> We are here to advance economic progress

for all.

Ladies and gentlemen, please welcome

NASDAQ CEO Adena Freriedman.

[Music]

>> Welcome.

>> Hey Jason, how are you?

>> Thanks for coming. How are you?

>> Hi. It's great to see you. Hey,

>> great. It's great to be here.

>> Welcome. Thanks for coming out.

>> What a day you've been having.

>> Yeah. So, you caught some of the action

earlier today, right?

>> I did. I did. I've been watching from

behind the scenes. It's been amazing to

watch. You've been hanging backstage.

Did you have a favorite moment or

speaker?

>> Oh, I I I never like to pick favorites

at NASDAQ. We don't pick favorites. Um

uh we have great companies, but

obviously Rene is a wonderful NASDAQ

listed company that and I've gotten to

know it very well with ARM. So, I would

say always have great conversations.

>> But you know, sorry, but NASDAQ's more

than a market. I think I wanted to start

with this real important question

because when when we were talking, I

didn't realize that NASDAQ was more than

just the NASDAQ market that we all know.

Maybe just for the for the audience you

could just share a little bit more about

the broader business.

>> Sure. Thank you. Well, so first of all,

we are really proud of our foundation as

a market. But as we started to grow and

expand the business, first of all, you

know, when I became CEO, we had about

two and a half million billion dollars

in revenue. Today or as of the end of

last year, we had a little over $2.5

billion dollars of IBIDA. So, we've

grown and expanded the business quite

dramatically. And how we've done that is

taking our core as a market and saying,

what more can we do for our clients? So

we are an architect of modern markets.

We provide our technology to our 17

markets and we sell it to 135 other

markets around the world. So market

infrastructure is our business and we do

that globally. Then the second is really

being powering that innovation economy

like companies like Renee you know ARM

and other great companies. So uh we've

expanded that. So, our index business

now has about $700 billion of assets

under management that are tied to those

great innovators in addition to creating

better abilities for companies to

navigate the public markets and

investors to find cu find investments.

>> And you had a big announcement today.

And then the third is is also building

trust in across the financial system.

And that is anti-inancial crime

technology, market surveillance

technology, other technologies that the

banking industry and the and the broker

dealer industry really need to manage

their lives in the markets. And you're

right, we had a big invest we had a big

um a big announcement today

>> which almost Vlad foreshadowed before

you actually.

>> Yeah. And and actually it goes right

back to that first pillar being, you

know, being the architect of modern

life.

>> Tell people what

>> You think we should? Yeah. Yeah. Okay.

So uh so this morning we announced that

um we're going to be bringing

tokenization into our markets. So making

sure that equities are tokenized and

traded on market in the markets not in a

side a side sleeve but actually in the

the core markets.

>> So the eventual goal or is it today 24x7

365 equities just let it rip constantly.

>> I mean I think we are all moving in that

direction. We announced several months

ago that we're moving to 245. So we're

moving that way. So Saturday and Sunday

not

>> not not for equities yet. I think that

you know we have to we're walking before

we run u but I think that getting to 245

is a major advancement for the US

equities markets. And then on top of

that now with tokenization if we can

introduce that also into the markets it

allows us to really think about

streamlining the post trade processing

bringing and modernizing elements of the

markets that have a lot of friction. You

know we we are hyper resilient and we're

hyperscaled. You know, we manage like

today we had 95 billion messages come

into our systems today and we had a

median, you know, return time of 20

micros on from order to trade. We handle

like 3 million messages a second. It's

hugely scaled. But then at the same

time, you know, once that trade occurs,

there's a different process. And the

post trade process as we know is an area

where tokenization really shines and

really cutting down the friction

managing capital flows across the global

ecosystem and really bringing that

capability into the market is going to

be the next.

>> 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

>> Well, I 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 in how the

technology is going to be applied is

going to be critical. So, we're very

excited about 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.

And and I don't mean this to be glib or

anything, but wasn't there like a

concept around the markets having an end

of the day at 4:00, allowing people to

have a life and to sleep and to not have

this anxiety? Are we all going to live

in a world where we have to check our

stocks at 2 in 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 3:00 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 going to be worth the

fact that none of us are ever going to

sleep again.

>> Yeah. So, so I think first of all, I've

been at I started at NASDAQ in 1993, and

back in the '9s, we had a vision to go

to 247 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 245 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 4 and

they turn off at 8:00 at night. 4 in the

morning 8:00. Trading occurs during that

entire period of time. But the official

trading days of the United States are

9:34. 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 have

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. Those

companies are global investors have

global interests. The NASDAQ 100's one

of the most traded products in the

world. The futures trade 245. So why

shouldn't the underlying? So that's how

we look at those non- US trading hours

and then the trading hours and trying to

find that confluence and wait a little

bit.

>> There's a lot of um hand ringing about

the number of companies that have gone

public. The weight of being a public

company, the stay private longer moment.

Took Uber 11 long years. Stripe is

private now close to 15 years. SpaceX.

So and and we have some folks who maybe

think things should run differently. We

had Spotify go uh public in a direct

listing. You have Chimath experimenting

with spaxs. What should the IPO market

look like? And how can we make it now

that we have a government that's maybe a

little more engaged, let's say, and less

napping as administration? How should

the IPO market change and that process

change to encourage people to maybe not

stay private so long? Because all the

gains are being captured by the elites,

by the qualified purchasers, the

accredited investors can barely get in

and let alone the public. By the time

the public gets in, it does feel like,

oh, I'm getting into Instacart and it's

going to go sideways for a year or two

or three.

>> Yeah. So I mean first of all I think

it's really good to remind all of our

you know all of us why the public

markets are so important for the

economy. Um when a company goes public

they get access to billions of investors

and every citizen in this country gets a

chance to become an owner in the

economy. And when we look at just the

performance of the NASDAQ 100 over 40

years of its existence the average

return on the NASDAQ 100 over those 40

years is a 14.25% annual return. So

that's double the broader market.

>> It's an incredible return

>> if if if com you know if individuals

have access to these great companies as

you know I saw your your pod a few weeks

ago showing the performance of the

public markets. It's it's such an

important part of our economy to engage

the population in the economy and the

growth of the economy and the success of

the economy. So I've always believed in

the balance between public and private

markets. I think there are reasons for

them both to thrive and be great great

for everyone. But the public market

experience has become this massive you

know burden and I think that we call it

like you have to cross the Rubicon to

become public and it's become very

daunting for com for CEOs and companies

to to take that decision. So we have

talked very closely with the SEC and

others about what can we do to lighten

the load to make it so that it's not

such a huge change. We've t we've

advocated for changes in disclosure

reforms, proxy reform, litigation

reform, all of those things. There's

such a different existence. It shouldn't

be so different.

>> Does the burden actually improve the

quality of the companies that are

public? Does it improve the fraud rates?

Does it

>> It's a good question. And I actually do

think that you will find that there is

really good valid reasons for certain

disclosures. I think disclosure is a

cleansing, you know, as a as a cleansing

event. Um but and so having the respon

but there's so they have to disclose so

much more than that's actually necessary

for an investor to make a smart

investment decision.

>> Let's strip that away and get back to

the core disclosures and then offering

different ways to actually enter the

public markets. We think the direct

listing and we've actually worked

closely with Bill and others on a direct

listing with a capital raise like why

not have that? We have that ability

today. Um and so and then spaxs are

another another avenue to public

markets. ICOs over time. We'd like to

kind of bring that as a that to me is

frankly a direct listing, a tokenized

direct listing. So, how do we bring all

those capabilities into the markets and

make them available and make these

companies feel like it's exciting?

>> That requires the SC hold just sort of

one followup if I may. That requires the

SEC to take a a little bit more risk and

they seem like an organization that is

incredibly riskoff and you know very

conservative in their approach. Did they

need to change their approach to be a

little bit more forwardinking in your

mind?

>> Well, I first of all, I would say that

um Chair Atkins is my first meeting with

him was just amazing. He's great. Um you

know, he is forward-leaning. He wants to

create change. He wants to make IPOs

great again.

>> He wants to to really support the public

markets while also, frankly, looking at

elements of the market structure in the

established markets and saying, does

this all need to exist? Because there's

a lot of there's a lot of that, too. And

then also really embracing the crypto

ecosystem to say what elements of this

could be brought in that regulatory

convergence is real.

>> You know, how can we create a a

regulatory road for crypto markets? How

can we actually create a regulatory road

for tokenized securities markets? How do

those things kind of converge? Can I can

I ask you he's a he's a great I mean I

would say he's off to a great start.

outside of the equity markets, the

biggest liquid pools that are trading

right now, whether it's the actual

tokens or pers 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?

>> 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 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 has not

been available to us.

>> And is that something that if the

federal government just creates that

clarity, you know, you could compete

with Coinbase, you can compete with

Binance, you can compete with OKX, you

can compete with the decentralized. I I

would say that what we would want to do

is really work with our institutional

clients because they also have not been

able or willing to play in the markets.

Their risk tolerance is we have a

similar profile.

>> So if we can actually bring the

institutional ecosystem into crypto

assets, we bring tokenization into

securities assets. That's a really

interesting way for us to play a role in

in really helping evolve these markets

and and bring them to the mainstream.

And whether you know I many flowers will

bloom in that in that ecosystem. you you

today all of your markets are equities.

These are securities that have secured

interest in in an underlying business

asset. There's a business that's buying

and selling stuff and has employees and

does stuff.

>> But much of what we see the volume today

in prediction markets, in crypto

markets, there aren't underlyings. These

are there's there's a there's a point of

view on some value of, for example, in

the prediction markets an event. And

historically, you'd have 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?

>> 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 I think it's also good

that the SEC and the CFTC by are joining

forces to think about these markets much

more comprehensively because if we can

bring that regatory paradigm across the

markets and make more more of these kind

of asset classes more accessible. I

think that's good for everyone.

>> Maybe you could talk about private uh

markets and the secondary sales that are

occurring. There's an SPV boom. We heard

um uh Vlad talk earlier today about

tokenizing open AI and SpaceX and I know

when Masayoshi wanted to buy a bunch of

um Uber when it was a private company,

they did that through NASDAQ uh and I

guess second market.

>> NAS Yeah, NASDAQ private market.

>> NASDAQ private markets which came

through the acquisition for Second

Market. That's right. If I remember my

history correct,

>> that's pretty good. Um, so how do you

think about those opportunities and

aggressively going after them? Right now

I 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.

>> So I think the first thing we focus on

in NASA private market is being issuer

first in 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, etc. 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 issu 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 NASA private

market different than other providers in

the private space is we always partner

with the issuer

>> because they're going rogue basically.

They're going around the backs of the

CFO and CEO of those companies at times

and it does piss them off.

>> Yeah. I I think it's important always to

realize that um you know the the issuers

the companies especially private

companies are being very mindful of who

they have as owners. Let's let them

continue to do that as private

companies. Once you enter the public

market then you've got public investors

and that's a different it is a different

responsibility

>> and there is different risk that that's

involved in opening the aperture to

billions of people but I think um and

there should be disclosures also

provided as a result of that. So in this

in that private marketplace, let's make

sure that we we keep some controls in

place around that.

>> The um the stock market has mostly

flipped from individual stock pickers to

just an absolute abundance of index

funds.

>> Um

it kind of compresses returns in some

way. It's hard to find like a lot of

alpha in the market. Um you have an

enormous concentration with the top

seven, eight or nine companies as a

percentage of the overall market. um

when you see these kinds of structural

things, what does it tell you about the

moment of the cycle because you you've

seen it now for 30 years.

>> Yeah. Yeah, I have. Um well, first of

all, I I think that the rise of index

investing is making investing more

accessible in general. It's a very very

inexpensive, very accessible and very

liquid way to have a view into a sector

or a return profile or a theme and not

have to pick stocks. And you know, as as

as retail investors, it's hard to sit

there and be a stock picker. It takes a

lot of time. I tried to I worked with my

son when he was a teenager. He really

wanted to do it. So I had to teach him

how to read an S1 or a 10K. It's you

spend some time on it. But but indexes

give makes I think investing much more

accessible. However, I also agree with

you that you also have to balance it

with active management. You have to have

active investors. I mean, at the end of

the day, I always say that there's a

balance between the passive and and

active world within the markets. And

whenever it skews towards the passive,

what happens is that that creates um

arbitrage opportunities for the active.

If the herd really kind of starts to

move the socks in a certain direction,

the active manager should step in and

take advantage of that arbitrage. But

the the real foundation of it though,

Chimath, is this that the you know the

NASDAQ 100 or these innovative companies

h are they are performing the way

they're performing for a reason and it

becomes very difficult to beat

>> the index because these companies are

very hard. It's hard to find companies

that deliver a better return than they

do. Um, and I think that's where active

management has has uh struggled just

because they are trying to beat a

benchmark, but that benchmark is so such

an attractive benchmark.

>> Let me ask a question unrelated to

NASDAQ. Um, your role on the board of

the New York Fed

from where you sit and and and your role

in capital markets, do you think that

there is a trend of ddollarization

underway? Um there's a report that just

came out on 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 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

>> 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 is 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 that they're going to express

themselves. I I believe in the US I feel

like I believe in the power of the US

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.

>> Does the Fed

>> uh and the Fed I think the Fed is a

staunch believer in the reserve

currency? I don't think that they have

any, you know, at least my experience

with them is that they don't have any

significant concerns that have arisen

from what you talked about.

>> Do you think that there's a data issue

at the Fed? You know, I've talked about

this before. I just I worry that, you

know, sort of bad inputs, bad decisions,

and they don't necessarily benefit from

the best of what's available. And quite

frankly, the best of what's available

is, you know, held close by certain

companies and not really shared broadly

because that they think is their edge.

So I'm just curious how

enabled the Fed is to actually see the

tea leaves and actually see what's

actually happening on the field.

>> I I can only say I mean I I can just

speak from my own experience. The the

Fed is very data driven. They get

sources of data, private sources of

data, public sources of data. They'll

get private databases of information

that they're not going to disclose or

they're not going to share with others

as an input. But there are many many

inputs that they take into

consideration. And they share every 10

days we go through and understand a

market update and economic update to

help us understand and frame what's

happening in the economy. And they use

that data. They're they're quite wedded

to understanding the data. But they'll

take in new sources. if new sources

become available or they find something

that could be useful, they will

absolutely take that into consideration,

but it won't supplant everything else

that they're looking at.

>> Do you have concerns about the Fed

remaining independent? We've seen a bit

of pressure uh from this administration.

We've seen it from other administrations

in the past, but what are your thoughts

broadly on the Fed and independence and

the importance of that and their

mandate?

>> Yeah, I mean, I know there's a a debate,

you know, even in healthy debate, a

health debate, I would say on that

point. I do have a point of view. I do

think that the Fed we've benefited for

almost 250 years on having Fed

independence. Uh I think that it's

important to to have allow the Fed to

think long term and that's why the term

of the Fed chair is six years like to

think longer term than through

individual political cycles and to be

data dependent. And I agree Tomoth like

there should be new sources of data that

are made available to allow the Fed to

continue to make those smart decisions.

But and I think in terms of the

decision-m within the Fed um that

independence allows them to to look

through a lot of different noise in the

economy and to think longer term. Are

they going to make perfect decisions

every time? No.

>> Are they 2020 hindsight we could all

look back and say oh we would have done

it differently.

>> Are they a political politically driven

organization in your experience?

>> Yeah. My pers my perspective and my

experience is that it is a very

datadriven very apolitical. I mean the

New York Fed has been very very focused

on just looking at the economy looking

at the market.

>> They take pride in that. I take it

>> a huge amount of pride in that and they

have you know there's definitely I mean

we've they've gone through some very

different political cycles. I I've been

there for almost six years. Uh and and

yet it's been a very steady process of

evaluating the monetary policy. Very

steady. while they also do a lot to

operate the economy. It's pretty cool.

>> Yeah. Do you think that um we need to

think more about the underlying leverage

that the Fed enables in market

participants and specifically you know

I've said this I I worry that we

financialize so much of the the economy

that you know hedge funds they can take

on so much leverage that even if you

have you know 60 70 billion you're

running a trillion long and you know a

trillion is not what it used to be but

it's still a lot of money where you can

really screw up the infrastructure of

America if you blow up or if you know

things go wrong. And there just doesn't

seem to be this robust check and balance

anymore yet again. I mean, we had it for

a few years coming out of the GFC

because we everybody was so burned by

it.

But I think that all these risk

measures, if you look at them, many of

them say, you know, a lot of these folks

um are running very levered. Um, so I

don't know if you see that from your

vantage point if you have

>> I mean certainly NASDAQ as the CEO of

NASDAQ we do see it in not so much in

our specific ecosystem although there

are you know highly levered let's say

ETFs and other things like that. Um

certainly outside the regulated markets

in the crypto space there's a lot of

leverage there too in the derivatives

markets there is but so but at the same

time I think there are a lot of checks

and balances within the securities

ecosystem that um that forces us to go

back towards a mean and there is an

oversight that the SEC has on what

levered products are at least brought

into the public markets. Uh in terms of

the Fed and looking at leverage I think

that the way that they focus it is what

really truly creates systemic risk. Um

and the GFC too big to fail kind of.

>> Yeah. The GFC really introduced the fact

that the there are certain banks that

introduce systemic risk by capitalizing

the banks the way they have. They feel

like have addressed a lot of that. And

yes, some of that activity moves off

outside the banking system that they

don't necessarily have complete control

over. But their view is that it's

distributed enough that it doesn't

necessarily create um systemic risk or

having a too big to fail hedge fund for

instance, right? Um but that's that's

that's how they kind of manage that that

risk. I you know leverage is a part of

the system but we also I think there's a

responsibility we all have to think

about how much

>> where do you see the biggest risk in the

market today? All markets. So there's

there's a lot of talk about climbing

defaults in commercial real estate and

the catalyzing effect that may result

from delinquency rates starting to

climb. We're private

>> credit I've heard about those now for

several years. Um, and I also would say

that the banks, you know, to the extent

they have a lot of real estate in their

portfolio, they've been working through

that. I do think that as we start to be

in an environment where we can start to

see rates come down, I think that

there'll be a lot of pressure that's

eased off of some of those those

concerns. Uh, and you know, people are

also coming back to work. Like, you

know, commercial real estate's going

through a cycle, but it's not it's it's

going to go through a different cycle.

So, but I do think that a lot of banks

have been working through those issues

and have been managing actually quite

well. We have over 5,000 banks in this

country. So, it's also again it's pretty

distributive risk.

>> So, I'm going to go buy stocks tomorrow.

>> I think that's a great idea. I remember

joining me in thanking Tina Freriedman

for being here today. Thank you. Thanks.

That was great. Thank you.

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