Nasdaq, Inc. (NASDAQ:NDAQ) today unveiled a series of enhancements to its market surveillance platform, having completed a pilot program that successfully incorporated advanced AI functions at every stage of a market abuse investigation.
The platform is used by financial institutions worldwide, including 50 exchanges and 20 international regulators, providing advanced capabilities to investigate suspicious activity from anomaly detection to law enforcement.
“Operators are increasingly coordinating sophisticated schemes through indirect relationships that avoid traditional detection methods, requiring equally sophisticated tools that can uncover hidden connections and move at a faster pace than the threats we face,” said Edward Probst, Head of Regulatory Technology at Nasdaq. “As more markets and participants adopt the added functionality, Nasdaq is uniquely positioned to draw on the collective strength of our customer community to maintain the integrity of global capital markets.”
As market manipulation systems become increasingly sophisticated in all jurisdictions, traditional detection methods, which rely on manual processes, are becoming increasingly inefficient and labor intensive. Nasdaq’s new AI detection capabilities leverage extensive industry and internal data sets to provide comprehensive activity assessments and predictive analytics to improve detection and reduce false positives. This allows market operators and participants to more effectively identify high-risk activity and instruments.
The additional capabilities build on existing AI functionality built into the platform, which streamlines the screening and review process involved in screening for suspected abuse. Together, these capabilities can also be used by global regulators to speed up enforcement of suspected market abuse.
Nasdaq plans to offer these enhancements to all customers of its market surveillance platform starting in Q4 2025.
Through a strategic partnership with the Saudi Capital Markets Authority, the pilot AI-powered anomaly detection tool was used to identify periods of unusual activity associated with a predefined set of behaviors. The pilot identified 80% of pump and dump patterns in a historical sample set compared to traditional detection methods.
As part of Nasdaq’s broader commitment to combating financial crime, Nasdaq Verafin recently announced an Agentic AI Workforce, a suite of digital workers designed to transform the efficiency and effectiveness of financial institutions’ anti-money laundering programs.