Nasdaq Enhances Market Surveillance with AI-Powered Technology 

Nasdaq Inc. announced the launch of a generative AI-powered feature within its Market Surveillance technology, aimed at improving the efficiency and effectiveness of market abuse investigations. This cutting-edge solution is expected to reduce investigation time by 33%, streamlining the process for detecting and examining suspected market manipulation and insider trading.

The new AI capability will be implemented for U.S. equity market surveillance, promising faster and more accurate identification of potential market abuses. “Maintaining trust in capital markets is critical to preserving long-term growth and prosperity,” said Ed Probst, Senior Vice President and Head of Regulatory Technology at Nasdaq.

The feature utilizes Amazon Bedrock, an AWS service for building secure generative AI applications. This technology will assist analysts by quickly analyzing and interpreting relevant information, enabling more detailed initial assessments of alerts. The AI can generate consolidated tables of regulatory filings, summaries of company news, sentiment analysis, and other pertinent data.

Tony Sio, Head of Regulatory Strategy and Innovation at Nasdaq, emphasized the importance of the new technology: “By drawing on the latest innovations in cloud technology and artificial intelligence, we can better respond to new threats and offer the global financial system advanced tools to tackle market abuse effectively.”

Scott Mullins, General Manager of Worldwide Financial Services at AWS, added, “Nasdaq is continuously innovating on behalf of the global capital markets. We are honored to work with Nasdaq as it harnesses the power of generative AI to advance the stability and security of the global financial system.”

Nasdaq’s AI initiatives extend across multiple business units, including North American Market Services, Financial Crime Management Technology, and Corporate Solutions. The company has introduced Dynamic MELO, the first SEC-approved AI order type, and Strike Price Optimization to align strike lists with market demand.

The Nasdaq Investor Relations Intelligence team has also employed various AI tools to enhance data analysis, recently launching Nasdaq Sustainable Lens™, an AI-powered ESG intelligence solution. Additionally, Verafin, a Nasdaq Financial Crime Management provider, introduced the Entity Research Copilot, using generative AI to automate compliance tasks and improve efficiency.

Nasdaq’s ongoing AI strategy focuses on improving data quality and infrastructure, embracing cloud-enabled systems, and ensuring proper governance, security, and oversight. These efforts aim to enhance the integrity, fairness, liquidity, and efficiency of the global financial ecosystem.