Nasdaq, Inc. (NASDAQ: NDAQ) has agreed to acquire a London based startup called Sybenetix. Founded in 2011, Symbenetix uses artificial intelligence to help compliance officers at asset management firms analyze behavior of traders in order to prevent market abuse. This company will enable the exchange group to expand its current market surveillance technology offering to service buy side firms.
Nasdaq recently has been looking to invest more in innovative technologies such as cognitive computing. This deal is Nasdaq’s first acquisition since January. Other than running stock exchanges, Nasdaq has a large division that sells market technology to trading firms, exchanges, and clearing houses around the world. They run a leading market surveillance software business as well including Smarts that helps brokers, exchanges, and regulators identify possible abusive trading across a range of markets. More than 45 marketplaces, 17 regulators, and 140 market participants use their surveillance tools.
Nasdaq’s acquisition of Sybenetix will enable them to develop solutions that analyze data beyond trading records to better spot conduct risk. Investors interest in “regtech” companies have been growing. These companies such as Sybenetix offer technology that help banks and investors cope with various post financial crisis regulations in order to avoid hefty fines.