The financial industry is undergoing profound changes, with shifting regulations, evolving investor sentiment, and the increasing role of technology shaping the capital markets. Speaking at a fireside chat moderated by Walt Lukken, President & Chief Executive Officer, FIA at FIA Boca on Monday, March 10, Nasdaq Chair and CEO Adena Friedman, shared her perspective on the evolving market landscape, the state of IPOs, regulatory modernization, and the transformative role of AI in financial technology.
Reflecting on the current investment climate, Friedman highlighted a renewed sense of confidence among businesses and investors.
“People came into 2025 with a lot of confidence and hope for an environment where we could really rationalize regulation,” she said. “We’re also seeing an agenda that supports the ability for companies to grow.”
The IPO pipeline, according to Friedman, remains strong, with many companies ready to enter the public markets. However, the prevailing uncertainty—stemming from monetary policy changes, inflation fluctuations, and evolving regulatory frameworks—has made some firms hesitant.
“Since the end of 2021, we’ve seen relatively quiet IPO markets, but now more and more companies are prepared,” Friedman explained. “Investors are waiting for a stable environment to assess risks. The window for IPOs will open, and when it does, there are some truly interesting companies ready to step in.”
Regulatory Reform and Simplification
With the recent nomination of Paul Atkins as the new SEC Chair under the Trump administration, the conversation around regulatory reform has gained momentum. Nasdaq has been actively engaging with regulators to advocate for a more efficient framework.
“The real question is: What regulations are truly necessary for investor protection, and what has become outdated?” Friedman noted. “We must modernize rules governing public companies, streamline proxy and disclosure regulations, and create a more balanced approach to compliance.”
Friedman emphasized that excessive regulatory complexity stifles growth. A study by Nasdaq and Boston Consulting Group (BCG) revealed that while global complexity has increased sixfold in the last 50 years, regulatory burdens have multiplied 35 times over.
“If we can reduce risk and compliance costs by even 10 to 20%, we could unlock $25 to $50 billion in retained earnings across the banking sector,” Friedman stated. “That could translate into $500 billion in capital for market expansion.”
The Future of 24/5 Trading
A major initiative announced by Nasdaq is the planned expansion of U.S. equity trading to a 24/5 model by late 2026. The move aims to accommodate the growing demand for U.S. equities from international investors and align with existing 24-hour futures trading.
“We don’t take decisions like this lightly,” Friedman explained. “With $17 trillion in capital flowing into Nasdaq-listed securities, there is clear demand for extended trading hours. Futures markets are already operating 24/5, and alternative trading systems (ATS) have begun offering overnight trading.”
The transition will focus on three key pillars: liquidity, transparency, and market integrity. Nasdaq is forming an advisory committee composed of corporates, investors, market infrastructure providers, and brokers to ensure a seamless rollout.
AI’s Role in Finance and Compliance
Nasdaq has been at the forefront of integrating artificial intelligence (AI) into financial markets, particularly in fraud detection, risk management, and surveillance.
“We’ve embedded AI across all our financial technology solutions, from trade surveillance to regulatory compliance,” Friedman said. “Our anti-financial crime division processes over a billion transactions per week, and AI has dramatically improved efficiency.”
She provided an example of how AI is revolutionizing compliance workflows:
“In the past, analysts manually searched the internet for background information on potential bad actors. Now, AI automates the process, compiles reports, and reduces investigation times by 90%.”
Nasdaq is also leveraging AI to accelerate risk calculations.
“Some risk assessments used to take hours to process,” Friedman explained. “With AI-driven computation, we’ve reduced that time to minutes, allowing for more accurate and timely risk management.”
The Global Competitive Landscape
While the U.S. is advancing in regulatory reform and market innovation, Friedman noted that Europe faces a pressing need to revamp its financial system to remain competitive.
“Europe has an opportunity to create a more dynamic capital market by harmonizing regulations, modernizing tax laws, and fostering a culture of equity ownership,” she said. “Sweden, for instance, has 36% of household income invested in equities—on par with the U.S.—whereas the rest of Europe lags at just 18%.”
She emphasized that regulatory fragmentation in Europe remains a challenge but expressed optimism that ongoing discussions with European policymakers could lead to meaningful change.
