Nasdaq to up outsourcing to local IT firms

The Nasdaq Stock Exchange, the $900 million US-based stock exchange, is increasing the outsourcing of its IT requirements to Indian firms so that the facade of Nasdaq to investors will be developed in India.

Speaking to Business Standard, Robert Greifeld, president & CEO, Nasdaq,said: "We have done a bit of outsourcing through contractual relationship with organisations, and obviously we have great Nasdaq-listed companies to supply those services to us. We are fortunate we do not feel the need to develop it ourselves but to contract with firms such as Infosys or Cognizant to develop applications for us."

Nasdaq will increasingly rely on these outsourcing partners to fuel the trades executed through a sophisticated computer and telecommunications network, a system that transmits timely, critical investment information to all users.

Nasdaq has around 3,200 firms listed on it with market capitalisation of close to $4 trillion. The average daily volume in Nasdaq-listed securities for 2005 was 1.8 billion.

Nasdaq manages, operates and provides its products and services in two business segments, issuer services and market services.

The issuer services segment includes its securities listings business and its financial products business. Nasdaq's market services segment includes its transaction-based business and its market information services business. According to the information available, Indian firms will play a significant part in the issuer services segment.

The service providers in the ensuring months will take on more work as transactions on Nasdaq are set to increase. For the record, transactions involving 363.3 billion equity securities were executed on or reported to systems last year.

According to market information, TCS did a significant amount of work when Nasdaq's trading platform was being developed and presently Nasdaq is amongst the largest electronic screen-based equity securities trading platform.

In addition to this, Nasdaq will heavily rely on technology to drive its open market structure which offers a high-level of transparency.

This will enable investors to view their buy-and-sell orders of securities at multiple price levels, and help investors gauge market trends crucial to the decision-making process.