NASDAQ (National Association of Securities Dealers Automated Quotation) is an American stock exchange engaged in electronic securities trading.
Owned by the holding company Nasdaq, Inc., specializing in trading, clearing, regulation, listing of securities, provides information services for public and private companies.
The company was founded by the National Association of Securities Dealers (NASD, now the Financial Industry Regulatory Authority, FINRA) and began operations on February 8, 1971.
In 1938, the US Congress passed an amendment to the Stock Exchange Act called the Maloney Act. This document obliged brokers who were not members of the exchange to unite in a self-regulatory organization. In 1939, the National Association of Securities Dealers was formed, which basically functioned as the governing body for buyers and sellers of OTC shares. At this time, in order to buy shares, it was necessary to communicate by phone with various market makers in order to find out who offers the best price. With the help of this system, it was impossible to fix the price of a share at a certain point in time, and also to track whether the price of a share rose or fell.
In 1968, the Securities and Exchange Commission analyzed the state of the over-the-counter securities market and found it unsatisfactory. The financial statements of market participants were published irregularly, and sometimes were absent altogether. The National Association of Securities Traders was tasked with systematizing and automating the entire retail securities market.
The automated quotation system, called NASDAQ (National Association of Securities Dealers Automated Quotation), appeared in February 1971, using one of the first computerized trading systems Institutional Network (Instinet), created in 1967-1969. NASDAQ made it possible for brokers to post their quotes, which became available to other brokers in various US cities through a computer network.
Originally NASDAQ was just a database of average quotations of low-liquid securities, but even this was an important innovation and made it possible to reduce the costs of transactions with these securities. In 1975, the NASDAQ split from the OTC market and canceled the financial minimum to enter the market. Small, newly created companies that did not have the opportunity to get listed on the New York Stock Exchange (NYSE) had a chance to get promoted. It was through NASDAQ that Apple, Microsoft, and Amazon began their journey.
In 1981, in an effort to increase the size and prestige of the NASDAQ, NASD established a new two-tier ranking system for 3,600 companies. For stocks of US companies with a large market capitalization, the NASDAQ National Market was formed, for less liquid securities – the NASDAQ Small Cap Market.
In 1985, the company introduced the NASDAQ-100 Index, which includes the 100 largest non-financial companies.
In 1996, the first site of the exchange was opened, in 2009 a mobile version of the site was launched.
In 1998, NASDAQ merged with the American Stock Exchange to form the NASDAQ-AMEX market group (AMEX was acquired by NYSE Euronext in 2008 and its data was integrated into the NYSE).
Beginning in 2000, FINRA restructured and expanded its ownership of the NASDAQ by selling shares to FINRA members, investment companies and issuers listed on the NASDAQ stock exchange. As a result of this restructuring, FINRA completely lost its stake in the company in 2006, and in 2007 the NASDAQ became fully operational as an independent registered national stock exchange.
In 2008, NASDAQ merged with OMX, Scandinavia's leading exchange operator, and changed its name to NASDAQ OMX Group. In 2015, the company changed its name to Nasdaq, Inc.
The company currently has about 40 offices around the world.
In the United States, operations are carried out on three sites: Nasdaq Stock Market, Nasdaq BX, Nasdaq PSX. Both stocks of companies listed on the stock exchange and securities that are not listed on the NASDAQ are allowed to trade. Participants: market makers, broker dealers, alternative trading systems, stock exchanges.
In Canada, the company operates three independent exchanges: Nasdaq Canada CXC, Nasdaq Canada CX2 and Nasdaq Canada CXD, on which securities listed in Canada are traded.
In Europe, NASDAQ operates stock exchanges in Stockholm (Sweden), Copenhagen (Denmark), Helsinki (Finland), Reykjavik (Iceland), Tallinn (Estonia), Riga (Latvia) and Vilnius (Lithuania).
Companies wishing to list securities on the NASDAQ stock exchange must meet minimum listing requirements, including financial and corporate governance criteria.
The NASDAQ stock exchange has three different market tiers: Nasdaq Global Select Market – for large-cap companies, this is the highest initial listing standard of any global stock exchange; Nasdaq Global Market – for companies that hold leading positions in the global market and have international coverage with their products or services; Nasdaq Capital Market – for small companies whose main goal is to raise capital.
As of December 31, 2019, 3,140 companies have listed securities on the Nasdaq Stock Exchange, of which 1,420 are on the Nasdaq Global Select Market, 870 are on the Nasdaq Global Market, and 850 are on the Nasdaq Capital Market.
Regular trades are held daily Monday through Friday from 9:30 am to 4:00 pm ET (4:30 pm to 11:00 pm Moscow time). Trading is possible until 20.00 in the post-trading session.
The annual revenue of NASDAQ in 2020 was $ 5.627 billion, in 2019 – $ 4.262 billion, in 2018 – $ 4.277 billion.
At the end of 2020, NASDAQ's net profit was $ 2903 million, which is $ 368 million, or 15%, more than in 2019.
Since 2017, NASDAQ is headed by Adena Friedman, she became the first woman to lead a major exchange in the United States.
The material was prepared on the basis of information from RIA Novosti and open sources