Six Trends Financial Market Infrastructures Need to Know

Capital markets continue to evolve at a rapid pace. This puts new demands on financial market infrastructures (FMIs) but also opens new doors of opportunity. Here are six key trends impacting FMIs and how they are shaping tomorrow’s markets and post-trade ecosystems.

Capital markets continue to evolve at a rapid pace. This puts new demands on financial market infrastructures (FMIs) but also opens new doors of opportunity. Here are six key trends impacting FMIs and how they are shaping tomorrow’s markets and post-trade ecosystems.

1. Settlement acceleration

The move to T+1 in North America has unleashed a wave of change across the globe as market participants and FMIs adjust processes and systems. With the U.K., EU and Australia exploring T+1, the focus on settlement acceleration continues. Taking a holistic approach to automation across various touchpoints won’t only help FMIs keep pace with shorter settlement but can underpin new exception or allocation management services.

2. Tokenization

The first use cases of asset tokenisation on Trad-Fi are starting to come online, including the central securities depository (CSD) of Chile, DCV, last year announcing plans to support issuance, registry and settlement of digitized securities. As FMIs assess tokenization, a natural next step may be streamlining international custody as the possibility of seamless interoperability becomes a reality.

3. Treasury and repo clearing

New U.S. regulations will require most treasury repos to be cleared starting 2026. In Europe and the U.K., >50% of repo trades are cleared voluntarily, and in Latin America, repo activity is increasing. These dovetailing developments create new opportunities for FMIs with growing demand for repo clearing and collateral management services as well as basket repo services.

4. Modernization via cloud

Cloud uptake continues among FMIs with the first mission-critical workloads coming online on cloud infrastructure through partnerships with hyperscale cloud service providers. Embracing a cloud operational model can unlock new efficiencies, scalability and resilience to power services and innovation. The fact that cloud is a facilitator of AI and data analytics services further fuels this trend.

5. AI

AI is already solving problems in financial markets today, within a year of its rapid onset in summer 2023. Smart modes of automation are freeing resources to direct toward value-add activities that power innovation and differentiation. Nasdaq, for example, has gained regulatory approval for the first exchange order type powered by AI, which aims to improve fill rates and quote stability.

6. Carbon markets

Voluntary carbon markets are growing. Yet scaling challenges stand in the way. The industry needs more standardisation and automation to support increased price transparency and market efficiency. These are key areas where participants will look to FMIs for solutions.

As the landscape continues to shift, FMIs will need to find the capacity to keep pace. Modernisation provides the best path forward for FMIs, delivering solutions for now while futureproofing for tomorrow. Learn more about Nasdaq’s post-trade technology for clearing, settlement, registry and more here.