Nasdaq Blockchain

Johan Toll, Product Manager Blockchain

December, 2017 NASDAQ A FINTECH COMPANY NASDAQ - WHO WE ARE We don’t chase the opportunities of tomorrow - We create them

A financial technology company, rewriting the future of global Market Services economies & markets by unlocking Marketplaces & Associated capital and opportunities through Connectivity our technology, innovation, and 36% of Net Revenues expertise. Market Technology Corporate Market, Regulatory and Information Services Risk solutions Services Listings, Intelligences 12% of Net Revenues Market Data, Index & Communications and Analytics 28% of Net Revenues 24% of Net Revenues

3 AMERICAS (21) MIDDLE EAST AND AFRICA (19) • AFFINITY CAPITAL EXCHANGE • ABU DHABI SECURITIES EXCHANGE • BATS EXCHANGE (S) • BAHRAIN BOURSE MARKET TECHNOLOGY • BERMUDA STOCK EXCHANGE • DUBAI FINANCIAL MARKET • BOLSA INSTITUCIONAL DE VALORES • EAST AFRICA EXCHANGE • BM&FBOVESPA (S) • ERBIL STOCK EXCHANGE • BOVESPA MARKET SURVEILLANCE BSM (S) • THE EGYPTIAN EXCHANGE • BOLSA DE VALORES DE COLOMBIA • IRAQ STOCK EXCHANGE • BOLSA ELECTRÓNICA DE CHILE • KUWAIT CMA (S) • BOLSA MEXICANAS DE VALORES (S) • BOURSA KUWAIT POWERING • DEPÓSITO CENTRAL DE VALORES • NASDAQ DUBAI • FINRA • NIGERIAN STOCK EXCHANGE • GOLDMAN SACHS DARK POOL • NATIONAL ASSOCIATION OF SECURITY DEALERS MORE THAN • ICE US (S) • NIGERIAN CENTRAL SECURITIES CLEARING SYSTEM • IIROC (S) • PALESTINE SECURITIES EXCHANGE • LAT AM SEF (S) • PALESTINE CAPITAL MARKETS AUTHORITY (S) • NEX (BROKERTEC US) • QATAR CSD • NORTH AMERICAN DERIVATIVES EXCHANGE (S) • SAUDI STOCK EXCHANGE – TADAWUL • NEW YORK INTERACTIVE ADVERTISING EXCHANGE (NYIAX) • SAUDI ARABIA CAPITAL MARKETS AUTHORITY (S) • TP ICAP (I-SWAP) • (UAE) EMIRATES SECURITIES AND COMMODITY AUTHORITY (S) • TRUEX (S) • UTP SIP ASIA-PACIFIC (25) • ASX AUSTRALIAN SECURITIES EXCHANGE EUROPE (26) • BURSA MALAYSIA • AFM NETHERLANDS (S) • DHAKA STOCK EXCHANGE • AGENCY FOR THE COOPERATION OF ENGERY REGULATORS (ACER) (S) • FEX FINANCIAL & ENERGY EXCHANGE 100 • ASTANA INTERNATIONAL FINANCIAL CENTRE • HONG KONG EXCHANGES AND CLEARING MARKETS • BATS CHI-X (S) • ICAP (I-SWAP) AUSTRALIA • BOERSE STUTTGART • INDONESIA STOCK EXCHANGE • BORSA ISTANBUL • INDONESIAN CENTRAL SECURITIES DEPOSITORY (KSEI) WORLDWIDE • BUDAPEST • JAPAN COMMODITY CLEARING HOUSE • DUTCH AUTHORITY FOR FINANCIAL MARKETS (AFM) (S) • JAPAN ELECTRICITY AND POWER EXCHANGES(S) • ENERGIMARKNADSINSPEKTIONEN (SWEDEN) (S) • JAPANNEXT • EURONEXT – AMSTERDAM (S) • JAPAN EXCHANGE GROUP (JPX) • 90+ external exchanges, clearinghouses & • EURONEXT – BRUSSELS (S) • MONETARY AUTHORITY OF SINGAPORE (S) • EURONEXT – LISBON (S) • NATIONAL STOCK EXCHANGE (AUSTRALIA) CSDs in 50 countries • EURONEXT – PARIS (S) • NEW ZEALAND STOCK EXCHANGE • FINANCIAL CONDUCT AUTHORITY UK (S) • PORT MORESBY STOCK EXCHANGE • ICAP (BROKERTEC EUROPE) • PHILLIPINES DEALING AND EXCHANGE CORP • 31 Nasdaq owned and operated exchanges, • ICAP (I-SWAP) • PHILIPPINES STOCK EXCHANGE • ICE EUROPE (S) • SECURITIES AND EXCHANGE BOARD OF INDIA (S) CSDs and clearinghouse • IRGiT • SECURITIES COMMISSION MALAYSIA (S) • KDPW • SECURITIES & FUTURES COMMISSION HONG KONG (S) • OFGEM UK (S) • SHANGHAI FUTURES EXCHANGE (S) • 140+ market participants in 35 countries • OPCOM/ROMANIAN POWER EXCHANGE • SINGAPORE EXCHANGE • OSLO BØRS (S) • SOUTH PACIFIC STOCK EXCHANGE • POLISH POWER EXCHANGE • SYDNEY STOCK EXCHANGE (FORMERLY ASIA-PACIFIC SE) • 17 regulators in 16 countries • SIX SWISS EXCHANGE • TOKYO COMMODITY EXCHANGE • THOMSON REUTERS BENCHMARK SERVICES (S) TECHNOLOGY TRENDS SHAPING FINANCIAL SERVICES Blockchain cannot stand alone

5 Market Disruption through blockchain PILLARS OF INTEREST FOR THE FINANCIAL MARKET

POST TRADE Cheaper Operations PLUMBING Alternative Business- and Market Models RELATIONSHIP Faster Processes ISSUERS/INVESTORS Regulatory Reporting REGULATORY Reduced Reconciliation TRANSPARENCY Cross border Solutions

7 COMPLEX WEB OF THIRD PARTY INTERMEDIATION

Investor Broker Dealer / Marketplace Broker Investor Clearing Member Dealer

CCP Clearing Member

Global Global Custodian Custodian CSD Sub- Sub- Custodian Custodian

Government Corporation Central Bank

8 CAPITAL MARKETS ON BLOCKCHAIN

Broker/Dealers Marketplace Broker/Dealers

Asset and Cash ledger(s)

Government Central Bank Corporation

9 Nasdaq blockchain forges ahead NASDAQ BLOCKCHAIN JOURNEY

Product Delivery of products offerings built for production

Nasdaq R&D – Blockchain tuned to handle the U.S. equities trading volume - 1st Nasdaq patent filed. Nasdaq recognizes the Investment in chain.com applicability of blockchain technology to Build of Design studies and Financial Markets. solutions build of solutions with customers

Linq, proxy voting, establishing clearing and settlement Nasdaq Linq enables first- partners. ever Private Securities Issuance documented with blockchain technology.

11 NASDAQ BLOCKCHAIN IN PRODUCTION AND DELIVERY

• Nasdaq is already live with blockchain solutions

• Actively ongoing cooperations with partners to evolve markets into a more decentralized world

• Several development projects underway with the end goal for production

12 “BLOCKCHAIN FOR PAYMENTS” WITH CITI BANK BUILDING COMMERCIAL OFFERINGS AND PUTTING SOLUTIONS INTO PRODUCTION

Nasdaq / CITI Payment Solution

• A new integrated payment solution

• Enables straight through payment processing

• Automates reconciliation by using a distributed ledger to record and transmit payment instructions

• Integrates Nasdaq and Chain blockchain technology with Citi’s global financial network

13 ISSUANCE AND SETTLEMENT OF OTC PRODUCTS IN BLOCKCHAIN BUILT WITH AIM FOR PRODUCTION, DEPLOYED FULLY IN THE CLOUD

Issuance and Settlement of OTC Structured Products

• Issuance and settlement of structured products through a DLT solution, including management of payments.

• Solution deployed fully in a cloud environment, built on the Linq and Nasdaq Financial Framework.

• Initial MVP phase with member testing, followed with move into production and further enhancements for automating corporate actions processing

• MVP project finished January 2018, phase 2 in the planning

14 SOLVING OUR NORDIC MUTUAL FUND CLIENT NEEDS WITH BLOCKCHAIN

Issuance & Settlement of mutual fund shares

• Will revolutionize the fund market with one common framework for issuing, trading and settling of fund units including payments on the blockchain

• Current market very fragmented, many intermediaries, long lead times and sometimes fax machines are still being used

• Initial start in the Nordic countries, further global expansion with the market technology customer base

• PoC project finished by end of year

15 NASDAQ PUSHES BLOCKCHAIN AHEAD

• Blockchain will disrupt and improve our markets Several types of market functions will benefit from a more harmonized and shared infrastructure • Nasdaq is a pioneer and blockchain leader Actively involved in developing and re-imagining the future with blockchain as one of the elements to think new • In production today with blockchain Already today we have solutions in production and products available for global use • Network effect through Nasdaq community 100+ marketplaces already on the same technology

16 THANK YOU

NASDAQ - The Leading FinTech Company

Johan Toll, Product Manager Blockchain [email protected]

business.nasdaq.com