Clearhouse
Meet the Architects of Nasdaq's Next Generation of Regulation
Publication Date: July 16, 2018

Nasdaq is looking forward to the next generation of regulatory technologies and processes that will enhance the integrity and transparency of the markets of the future. In order to ensure it fully leverages its regulatory expertise, Nasdaq is reorganizing its various compliance functions under one umbrella: Nasdaq Regulation.


We recently spoke with Nasdaq Senior Vice President, John Zecca, who is leading this initiative, to find out how this new framework will benefit investors and listed companies.

Q: Why is Nasdaq consolidating its regulatory functions under one umbrella?

A: Regulation has been an integral part of Nasdaq since we introduced electronic trading to the capital markets in 1971. Companies list with us, and investors have confidence in us, because they trust the integrity of our markets. Integrity and transparency in capital markets foster confidence with investors and issuers, deter bad actors and accelerate growth.

This reorganization will elevate our regulatory group to make it easier for Nasdaq's listed companies and investors to reach out with questions, concerns, or tips. We are making it clear to bad actors that our first priority is ensuring the integrity of our markets for issuers and investors—that we are watching and prepared to take action if necessary.

Innovation is also core to Nasdaq's brand, and we are positioning Nasdaq's regulatory team to become the architects of the next generation of regulation. The capital markets are evolving every day: new listing products are in development and technology is transforming transaction and surveillance models. By creating a more cohesive regulatory team structure, we can leverage all of our expertise to better focus on regulatory strategic planning.

Q: How is Nasdaq's regulatory function going to evolve with this reorganization?

A: We made the conscious decision years ago to separate Nasdaq's regulatory programs from its business operations to minimize the potential for conflicts of interest—both real and perceived. That separation will continue going forward.

Nasdaq currently operates seven self-regulatory organizations (SROs) in the United States and we believe there is much to be gained from a more holistic approach to regulation. By virtue of this new framework, our team will have additional opportunities to work more closely together - to share ideas, concerns, and insights - and to ensure that there is no knowledge gap across our markets.

In keeping with Nasdaq's identity as a technology innovator, our regulatory technologists will continue to be critical to the integrity and smooth functioning of our markets. As markets become more automated, technologists become as integral to regulation as lawyers, economists, and accountants. Nasdaq recognized this early on. In fact, Nasdaq was the first market to implement an ongoing internal regulatory testing program to ensure our trading platforms were in compliance with new rules and regulations.

Q: How is the newly-reorganized Nasdaq Regulation team going to benefit investors and companies trading on Nasdaq exchanges?

A: By working more closely together, we will give our SRO regulatory teams more exposure to, and a better understanding of, all facets of Nasdaq's regulatory program. In bringing our regulatory teams and functional areas together, our regulatory team becomes more efficient and more collaborative, and they can focus on regulatory concerns for the future, while staying ahead of the game on technology. We will become smarter and better-informed regulators.

We are also bringing greater visibility of our regulatory group to the public, to act as a deterrent to bad actors. It will be easier for companies and investors to contact the right people with concerns or tips. In fact, anyone with tips or concerns about conduct occurring on our markets should call our new Investigations and Enforcement Hotline at +1 301 978 8310 or email our Investigations and Enforcement Team at enforcement@nasdaq.com.

Q: How else will this reorganization benefit regulation?

A: By giving our regulatory team broader exposure, I want to enable us to think more strategically and focus on new and emerging risks. As the markets are evolving, as new listing products are developed, we've got to change with the times. I want the team to think about what surveillance will be like 10 years down the line: How will automation impact our markets? What do the markets of the future look like? By creating cross-functional teams, we can better leverage the vast resources and broad scope of talent within Nasdaq's regulatory arm.

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John Zecca is Senior Vice President, General Counsel North America, and Head of Nasdaq Regulation for U.S. Markets. Mr. Zecca previously served as Nasdaq's senior corporate counsel and was responsible for public company compliance and mergers and acquisitions. He is a frequent speaker on market regulation and corporate governance. Prior to joining Nasdaq, Mr. Zecca served as legal counsel to an SEC Commissioner and in the SEC's Office of General Counsel.