NASDAQ

Nasdaq stands for The National Association of Securities Dealers Automated Quotations.

Nasdaq was created by the National Association of Securities Dealers, NASD.

However, around 2001-2002, Nasdaq became it’s own Self-Regulatory Organization independent of the NASD’s control.

The NASD no longer exists as it has changed its name to FINRA on July 30, 2007.¹

According to Nasdaq Executive Vice President & Global Chief Legal, Risk, and Regulatory Officer, John Zecca testifying before the House Financial Services Committee in 2024: Nasdaq builds leading indexes & provides technology that enables around 130 markets globally. Nasdaq provides critical regulatory compliance assistance to the banking industry & helps address financial crimes. Nasdaq was the first company to trading markets on the cloud & the first exchange utilizing an AI-powered order type.²

The History of Nasdaq

1971

Nasdaq was founded in 1971 by Gordon S. Macklin, former President of the NASD.

Nasdaq became “the world’s first electronic stock market on February 8th, 1971.

The Nasdaq Stock Market traded nearly two billion shares in 1971.

Nasdaq was selected by Intel Corporation to launch its Initial Public Offering (IPO) in 1971 with 350,000 shares at $23.50 each.³

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1980-1987

In 1980, Apple Inc. chose the Nasdaq exchange for its public debut IPO. Apple’s IPO was so successful it altered the way tech companies were viewed in the stock market.

In 1982, Nasdaq debuted its National Market System. The National Market System offered investors better information than was currently available in the market by adding high & low prices, volume of trades, and sales prices updated every 90 seconds. Nasdaq believed their National Market System capabilities helped ensure fairness & efficiency.

In 1984, Nasdaq introduced the Small Order Execution System. The Small Order Execution System allowed electronic trades to be executed at the best available price through their computers instead of relying on phone communication with brokers.

In 1985, Nasdaq launched its Nasdaq-100 index. The original Nasdaq-100 index was a capitalization-weighted index of a hundred large non-financial companies listed on Nasdaq. Some of these original companies included: Costco, Intel, & Apple.

In 1986, Nasdaq helped Microsoft go public. Microsoft listed over 3 million shares as demand increased.

In the earlier days, many considered Nasdaq “as merely a second tier exchange to NYSE” but today, that sentiment has changed to becoming a clear rival & equal.

By 1987, the total number of annual trades had risen to around 30 billion, five times more than in 1971.⁴

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1988-1997

In 1996, the transaction fee imposed as part of the National Securities Markets Improvement Act of 1996 (NSMIA) impacted transactions of securities listed on the Nasdaq Stock Market. In 1996, these fees impacted a volume of 543.7-million shares a day.

In 1996, Nasdaq became the first financial exchange with a public website: nasdaq.com. In April of 1996, nasdaq.com provided stock quotes with a fifteen-minute delay.

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1997 potential scandal?

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1998-2005

In 1998, Nasdaq updated it’s Nasdaq-100 index, originally released in 1985.

Also in 1998, NasdaqTrader.com went live giving professional traders specialized access to technical & regulatory information.

In 1999, Microsoft & Intel became the first Nasdaq companies listed on the Dow Jones Industrial Average. Invesco & John Jacobs launched QQQ. QQQ is an exchange-traded fund tracking the Nasdaq-100 Index.

In 1999-2000: Nasdaq opened a physical location called MarketSite in the heart of Times Square. MarketSite contains an eight-story video screen visible to the outside public, which broadcasts Opening & Closing Bell ceremonies & flash logos, videos, and advertisements from 7 AM to 1 AM.

In 2000, as a result of the stock-bubble bursting, Nasdaq had it’s trading volume decrease by around 35%. Nasdaq lost over 1,000 of it’s 4,700 listings as a result of the burst. However, the overall trading volume was around 1.05 billion shares, a 94% gain from 1996.

In 2000, Nasdaq began a formal campaign to become a public company independent of the NASD.

In 2001, Nasdaq filed an official application with the SEC to registered as an independent national securities exchange.

In 2001, Nasdaq moved to the Manhattan financial district. However, the September 11th attacks in 2001 did not impact their critical systems, which were located in Connecticut. Former CEO Hardwick Simmons speaks on C-Span & Congress on opening the market back up after the attacks & the decisions Nasdaq made to halt the opening for a week after the attacks. He also speaks on important lessons in resilience & redundancy.

Around 2002, Nasdaq’s application to the SEC (explained above in 2001) was approved & was allowed to call itself an SRO & divest itself from the NASD’s control.

In 2002, the American Stock Exchange started trading Nasdaq stocks.

In 2003, Nasdaq lost $105 million dollars. Nasdaq also purchased a rival company, Brut, around this time. Nasdaq implemented price cuts on trade executions resulting in less revenues for the company but a greater trading volume. This tactic likely negatively impacted rival companies whose trading executions may have cost more than Nasdaq’s.

Around 2004, Nasdaq introduced a trading system that combined two systems, SuperMontage & Nasdaq InterMarket, which traded both Nasdaq & NYSE-listed stocks. This combined system lowered costs & simplified trading for Nasdaq customers.

Google went public on Nasdaq in August of 2004.

In 2005, Nasdaq went public under the trading symbol NDAQ. Nasdaq also acquired INET, an electronic trading unit of Instinet. The INET platform became critical to improving performance with Nasdaq systems over the years. ⁶

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2006-2017

In 2007, Nasdaq had around 3,200 listed companies on its electronic stock exchange. Nasdaq’s 100 Trust (QQQ) became one of the world’s most actively traded securities.

In 2008, Nasdaq acquired both the Philadelphia & Boston Stock Exchanges. These purchases provided substantial growth to Nasdaq’s electronic stock market & options market.

In 2008, Nasdaq merged with OMX to form a large global network of exchanges. The Nasdaq OMX Group listed over 4,000 companies globally.

In 2010, Nasdaq acquired SMARTS Group, which increased Nasdaq’s regulatory technology presence in global markets. The SMARTS Group has changed in name to be known as Nasdaq Trade Surveillance & Nasdaq Market Surveillance, which around 18 regulators utilize.

In 2014, Nasdaq celebrated its 30th anniversary of its Macintosh listing.

In 2015, Google stock on Nasdaq transitioned to Alphabet Class A & Class C as it launched Alphabet Inc., Google’s holding company. Nasdaq also launched the Nasdaq Entrepreneurial Center which supports new entrepreneurs to run successful businesses.

In 2016, Nasdaq created the Nasdaq Financial Framework (NFF). The NFF helps market operators like: exchanges, clearinghouses & central securities depositories develop solutions to the trade lifecycle. The NFF is capable of integrating with third-party solutions, allowing it to work harmoniously with pre-existing solutions. In later years, banks, brokers, and real estate companies would also utilize NFF, nationally & globally.

Also in 2016, Nasdaq acquired Sybenetix, which expanded it’s ability to utilize artificial intelligence & behavioral analytics within a market surveillance capacity.

In 2017, Nasdaq launched Nasdaq Ventures. Nasdaq Ventures is a venture investment program to help Nasdaq grow product lines & expand into new segments of the market.

Also in 2017, Nasdaq acquired eVestment, an investment analytics firm. The acquisition of eVestment, provided Nasdaq investors with a larger pool of data points on many investments & institutional investors like pension funds & asset managers.⁷

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2018-2025

In 2018, Intel Corporation celebrated its 50th anniversary as Intel’s CFO & interim CEO, Bob Swan rang the Nasdaq opening bell. Intel’s partnership with Nasdaq began a few months after Nasdaq’s founding in 1971 when Nasdaq launched Intel’s IPO.

2018 was also the year that Nasdaq celebrated it’s 38th anniversary of Apple’s listing on their exchange. Nasdaq Ventures invested in ErisX, a crypto exchange. Nasdaq expanded it’s global footprint with the acquisition of Cinnober. Cinnober had clients such as: Dubai Gold & Commodities Exchange, the London Metal Exchange, NYSE, and Asia Pacific Exchange.

In 2019, Nasdaq made massive changes to its website: nasdaq.com & Nasdaq opened it’s global headquarters in Times Square consolidating all New York offices into one location.

Nasdaq also celebrated the 20th anniversary of its physical MarketSite location in the heart of Times Square.

Also in 2019, Nasdaq Ventures invested in Symbiont, a smart securities blockchain startup.

In 2020, the QQQ fund (launched in 1999) became the fifth-largest exchanged traded fund listed in the United States. On December 2020, daily trading volumes exceeded seven billion shares.

In 2021, Nasdaq celebrated it’s 50th anniversary since it’s founding in 1971.

In 2023, Nasdaq acquired Adenza from Thoma Bravo. Adenza combines treasury, risk, & collateral workflows with regulatory & compliance software.⁸

As of February 2024, Nasdaq became the second-largest stock exchange globally when measuring by market capitalization.⁹

Nasdaq Executives

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Gordon Macklin

Gordon Macklin founded Nasdaq in 1971.

Mr. Macklin served as its President from 1975-1987.

Mr. Macklin was also the President of Nasdaq’s parent company, NASD from 1970-1987.

Mr. Macklin’s tenure as President of Nasdaq helped introduce changes that “increased trading volume and efficiency, such as the Small Order Execution System, which automatically executed small orders against best quotations.” He was considered a man of “tremendous innovation and a creative vision of the future of financial markets.”

Mr. Macklin was also a chairman of an investment firm, Hambrecht & Quist, worked with funds at Franklin Templeton Group, and White River Partners. Before founding Nasdaq, Mr. Macklin worked for the securities firm McDonald & Co until 1970. He also was serving as an independent director on WorldCom during the unfortunate events at WorldCom.

Mr. Macklin served on various boards: Overstock, MedImmune, Martek Biosciences, Spacehab, and Worldcom; though there may have been others.

Mr. Macklin was philanthropic, giving back to his home state Ohio by establishing the non-profit Macklin Intergenerational Institute funded by the Marilyn & Gordon Macklin Intergenerational Institute Fund. The Macklin Intergenerational Institute oversees Marilyn’s Lifelong Educational Center, which helps young children prosper. He also helped endow the Macklin Business Insitute at Montgomery College and an interdisciplinary brain science program at Brown University.

Mr. Macklin was married to Marilyn Macklin; and together they had four children. Mr. Macklin passed away in 2007. He graduated from Brown University in 1950.¹³

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Hardwick Simmons

Hardwick Simmons served as Nadaq’s CEO from 2000-2003. Mr. Simmons served as CEO during the attacks on the Twin Towers & the American nation that occurred on 9/11/2001.

Mr. Simmons made an honorable decision to halt trading at Nasdaq for a week following the attacks, despite the Nasdaq systems being located in Newtown, Connecticut and thus was not impacted by the attacks. Mr. Simmons believed that “Nasdaq stocks couldn’t be the only ones available to market participants. It wasn’t fair to open the markets and preclude quite a number of players, particularly large firms, if indeed they had been hit. We had to make sure that all our clients could reach us.”

Mr. Simmons was President & CEO of Prudential Securities from 5/1991-12/2000. During his tenure as CEO of Prudential Securities, Mr. Simmons spoke on behalf of the Securities Industry Association & testified before the Senate Committee on Banking, Housing, and Urban Affairs to reduce the fees that previous legislation had introduced, which ultimately impacted the consumer. You can read Mr. Simmon’s testimony here.

Mr. Simmons served on the chair of the Securities Industry Association & was a director of the Chicago Board Options Exchange (Cboe).

Mr. Simmons has also served on the board of Lionsgate Entertainment Corp. since 06/2005. He is the current Chair of the Audit & Risk Committee with Lionsgate.

He also serves with Stonetex Oil Corp., is a trustee of Woods Hole Oceanographic Institution, and is chairman of The Tennis Hall of Fame. Mr. Simmons has played tennis since he was eight years old. He had a job around fourteen years old rolling clay tennis courts. He also started playing golf at 65 years old.

Mr. Simmons served in the U.S. military from 1960-1966. Mr. Simmons graduated from both Harvard in 1963 & Harvard Business School with an MBA in 1966.¹⁴

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Frank Zarb

Frank Gustave Zarb served NASD & NASDAQ as Chairman & CEO from 1997-2001. After resigning in 2001, he stayed on for many years as a senior adviser to both the NASD & Nasdaq.

Mr. Zarb also worked at Lazard, Smith Barney (as CEO), Travelers Group, Alexander & Alexander Services, Inc. & Aon Corp. Mr. Zarb was a governor of the American Stock Exchange and a member of the board of trustees Gerald R. Ford Foundation.

Around 1970, Mr. Zarb was recruited as Assistant Secretary of Labor under the Nixon Administration. He was then asked to become the Associate Director of the Office of Management & Budget.

Mr. Zarb is also known as the “Energy Czar” having held dual appointments in the Energy Resources Council & Federal Energy Administration from 1974-1977. He has served in advisory roles to Presidents Nixon, Ford, Reagan, Bush, and Clinton.

Mr. Zarb was a director on various public company boards: Long Island Power Authority, Nassau County Interm Finance Authority, NYS Commission on Education Reform, and Lower Manhattan Development Corporation.

Mr. Zarb is also chairman of Frank Zarb Associates, LLC; chairman of Promontory Financial Group, LLC; and senior adviser to Hellman & Friedman, LLC.

Mr. Zarb was born in 1935 in N.Y. Mr. Zarb attended Hofstra University for his Bachelors in Business Administration (focus on Marketing) & Master’s in Business Administration. Mr. Zarb served in the United States military & was a distinguished military student at Hofstra.

Mr. Zarb is married, has two children, and three grandchildren.¹⁵

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Bob Greifield

Bob Greifield become CEO of Nasdaq in 2003.

Mr. Greifield lead the company through a few difficult years, having to cut costs & employees in many important areas to help the company survive.

During these years, Mr. Greifield created deals that helped bring big companies like Charles Schwab & Hewlett-Packard to the listings. Mr. Griefield purchased rival company Brut & helped cut the cost of trade executions within the company. He also helped bring order opening & closing which brought the previous chaotic system under control.

Mr. Greifield worked for Burroughs Corp. & Unisys Corp in various roles, starting as a computer salesman. He also worked at Automated Securities Clearance, creating software that helped automate market-making desks. He became President of Automated Securities Clearance. He became group CEO of SunGard Brokerage Systems around 1999.

Mr. Greifeild was born in Queens, N.Y & lived on Long Island.

Mr. Greifield was a former high-school sprinter who quit racing to work at a local supermarket to save up to attend college at Iona College where he graduated in 1979. Mr. Greifield got an MBA from the New York University Sterm School of Business in 1986.

Mr. Greifield ran marathons & rode bikes during his middle-aged years.

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Wick Simmons

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Adena Friedman

Adena Robinson Friedman became the CEO of Nasdaq in 2017 after starting as an unpaid intern in 1993. Before becoming CEO, she was President, Chief Operating Officer, and held various positions in management & leadership within Nasdaq.

She also served as CFO & Managing Director of The Carlyle Group from 2011-2014.

Mrs. Friedman believes Nasdaq is an “engine for capitalism” aiming to make investing more accessible. Mrs. Friedman grew Nasdaq in areas like data research & software as a service. Mrs. Friedman is working on growing A.I. & Machine Learning powered high-frequency trading techniques within Nasdaq. Mrs. Friedman helped employ RegTech to manage the monitoring, reporting, and compliance processes within the financial industry & Nasdaq Data Link, which helps generate data on alpha & risk to provide transparency into both public & private markets.

Mrs. Friedman earned a B.A. in political science from Williams College in Massachusetts & an M.B.A. from Vanderbilt University in Tennessee in 1993. Mrs. Friedman is married with children. ¹⁷

1. https://www.finra.org/rules-guidance/notices/07-47; https://www.nasdaq50.com/stories/13 ↩︎
2. https://docs.house.gov/meetings/BA/BA00/20240723/117527/HHRG-118-BA00-Wstate-ZeccaJ-20240723.pdf ↩︎
3. https://www.nasdaq50.com/stories/1; Simms, M. (1999). The History: How Nasdaq Was Born. Traders Magazine, , 1. https://go.openathens.net/redirector/liberty.edu?url=https://www.proquest.com/trade-journals/history-how-nasdaq-was-born/docview/209755079/se-2 ↩︎
4. https://www.nasdaq50.com/stories/3; https://www.forbes.com/2007/02/01/macklin-nasdaq-obit-face-lead-cx_po_0201autofacescan01.html; https://www.brownalumnimagazine.com/articles/2007-05-17/the-electronic-trader; https://www.brownalumnimagazine.com/articles/2007-05-17/the-electronic-trader ↩︎
5. https://www.sifma.org/wp-content/uploads/2017/05/testimony-of-hardwick-simmons-president-and-chief-executive-officer-prudential-securities-inc-securities-transaction-fees.pdf ↩︎
6. https://www.c-span.org/program/senate-committee/us-financial-markets/141074; https://www.sifma.org/wp-content/uploads/2017/05/testimony-of-hardwick-simmons-president-and-chief-executive-officer-prudential-securities-inc-securities-transaction-fees.pdf; https://www.institutionalinvestor.com/article/2btgjwl89y52n36tnt9fk/home/nasdaq-battles-back; https://www.nasdaq50.com/stories/5; ↩︎
7. https://www.nasdaq50.com/stories/23; https://www.nasdaq50.com/stories/3; https://www.nasdaq50.com/stories/17; https://www.nasdaq50.com/stories/28; https://www.reuters.com/article/business/nasdaq-founder-and-former-president-dies-idUSN31228744/ ↩︎
8. https://www.nasdaq.com/press-release/nasdaq-accelerates-its-transformation-leading-technology-provider-global-financial; https://www.nasdaq50.com/stories/30; https://download.intel.com/newsroom/2021/archive/2018-07-18-news-intels-bob-swan-opens-nasdaq-trading.pdf; https://www.nasdaq50.com/stories/2; https://www.nasdaq50.com/stories/28; https://www.nasdaq50.com/stories/29; https://www.nasdaq50.com/stories/30 ↩︎
9. https://www.investopedia.com/nasdaq-ceo-adena-friedman-on-the-future-of-the-exchange-4774125 ↩︎
10. https://www.nasdaq.com/about ↩︎
11. https://www.nasdaq.com/about ↩︎
12. https://www.nasdaq.com/about; https://www.nasdaq.com/solutions/fintech/nasdaq-trade-surveillance ↩︎
13. https://www.nasdaq.com/about/press-center/nasdaq-mourns-passing-its-founder-gordon-s-macklin; https://www.montgomerycollege.edu/academics/honors/macklin-business-institute/index.html; https://www.reuters.com/article/business/nasdaq-founder-and-former-president-dies-idUSN31228744/; https://www.community-foundation.com/funds/marilyn-and-gordon-macklin-intergenerational-institute-fund; https://www.mackliniginstitute.org/; https://www.forbes.com/2007/02/01/macklin-nasdaq-obit-face-lead-cx_po_0201autofacescan01.html; https://www.brownalumnimagazine.com/articles/2007-05-17/the-electronic-trader ↩︎
14. https://www.c-span.org/program/senate-committee/us-financial-markets/141074; https://www.nasdaq.com/articles/20-years-later-former-nasdaq-ceo-remembers-9-11-2021-09-10; https://beyondthebaselines.com/tag/hardwick-simmons/; https://www.sifma.org/wp-content/uploads/2017/05/testimony-of-hardwick-simmons-president-and-chief-executive-officer-prudential-securities-inc-securities-transaction-fees.pdf; https://investors.lionsgatestudios.com/board-member-investor-day-speakers/hardwick-simmons; https://www.nasdaq.com/about/our-people/hardwick-simmons;https://www.theofficialboard.com/biography/hardwick-simmons-214e7; https://www.institutionalinvestor.com/article/2btgjwl89y52n36tnt9fk/home/nasdaq-battles-back ↩︎
15. https://www.hofstra.edu/pdf/library/libspc_archives_frank_zarb_collection_scrapbook.pdf; https://www.c-span.org/person/frank-zarb/9045/; https://www.c-span.org/program/public-affairs-event/stock-market-securities-industry-in-90s/6474; https://www.institutionalinvestor.com/article/2btgjwl89y52n36tnt9fk/home/nasdaq-battles-back ↩︎
16. https://www.institutionalinvestor.com/article/2btgjwl89y52n36tnt9fk/home/nasdaq-battles-back; ↩︎
17. https://www.forbes.com/profile/adena-friedman/; https://www.investopedia.com/nasdaq-ceo-adena-friedman-on-the-future-of-the-exchange-4774125; https://www.nasdaq.com/articles/regtech-rising#:~:text=%E2%80%9CTo%20date%2C%20%5Bregtech%5D,know%20your%20customer%20(KYC)%2C; https://www.nasdaq.com/articles/fintech/the-compliance-complexity-driving-regtech-demand-in-apac; https://www.emarketer.com/content/nasdaq-expansion-fintech-space-coincides-with-industrywide-evolution; https://www.nasdaq.com/articles/forbes-recognizes-adena-friedman-on-2021-list-of-the-worlds-most-powerful-women; https://business.vanderbilt.edu/board-bio/adena-friedman/ ↩︎