Nasdaq’s chief executive thinks the era of exchange consolidation is over, given the regulatory hurdles, and instead predicts more partnerships will emerge in an industry that has historically been characterised by cutthroat competition.
Speaking at a derivatives industry conference on Wednesday, Adena Friedman, president and chief executive of Nasdaq, pointed out that there has already been a “fair amount of consolidation” among bourses, and doubted there would be much more dealmaking in the industry.
The Nasdaq head argued that cross-border exchange consolidation in particular was “very complex” due to three reasons: shareholder scepticism, regulatory concerns on industry competition, and politicians.
“There’s the shareholders, probably the easiest hurdle because the level of synergies are obvious. I think you’ve then got the regulators, and sometimes there is a real problem there that they have to look through. And then you have the politicians who then impact the regulators. That’s the hardest part. In this climate right now, given what is happening, it’s a pretty high hurdle.”
Ms Friedman said that Nasdaq and other exchanges were instead focusing on organic growth and partnering with rivals “where we know we can benefit both of our client bases”, such as with cross-listings between trading venues.
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