Nasdaq’s Twin Pillars: Brad Peterson and Lars Ottersgård

In a period where most stock exchanges are facing uncertain futures and are eyeing consolidation with rivals, one of the world’s largest is hitting its stride.

Brad Peterson’s first brush with high finance was, by all accounts, an exercise in patience.

John Reed, who would become Citi’s storied CEO and chairman, had recruited Peterson’s father from the Ford Motor Company in 1970, the idea being that bringing people from outside financial services into the industry would inject fresh views on how to adapt to a changing world.

But for the younger Peterson, the questions of finance’s complex relationship with technology were far from his mind. “I remember being in Reed’s office, shooting paper clips into the ceiling when I was 12, thinking ‘why is my dad working on Saturday?’ Now, years later, I get it—working in tech is a round-the-clock job,” he recalls. Indeed, little did he know, then, how that scenario would come full circle for him later in life.

Californian by birth, the future CTO and CIO of Nasdaq had always been surrounded by technology, from when his father told him, in the 1960s, that computers would be in cars one day, through to his time at UCLA, where the first node of the internet was being created. Degrees in electrical engineering and post-graduate qualifications from MIT followed, but Peterson first went into the telecoms industry, where he worked on the 2G cellular web standard.

Stints at Charles Schwab, where he built the company’s first WAP-enabled application, as the CIO of Epoch Securities, later acquired by Goldman Sachs, and as the CIO of eBay shortly before its purchase of PayPal came after. He returned to Schwab as its CIO in 2008, before Nasdaq came knocking, five-and-a-half years ago, with the offer of a job running its technology from New York.

A Technology Company

It would have been a hard job for any technologist to turn down—few names are as synonymous with technology in the capital markets as Nasdaq. Now the second-largest exchange in the world by market cap, it was founded in 1971 by the National Association of Securities Dealers, from which it draws its name, with the objective of being the first fully electronic stock exchange. Since then, it’s become the natural home for the tech industry, boasting by far the greatest number of listings for technology companies across a range of sectors.

Stock offerings are only one part of the company, however. It is one of the few exchanges that still truly straddles the divide between market provider and market technology provider, with both aspects being intrinsic parts of its core identity. “I think there are a lot of companies that are saying they’re technology companies, that are not,” says Peterson. “But I would say, for Nasdaq, we check the box. We’re a technology company.”

Exchanges, like banks, are rarely known for their simple corporate structures. Whether it’s the use of somewhat arcane executive ranks—see the London Stock Exchange’s chief of staff role, as an example—or their global distribution, it can be hard to get a sense of how an organization prosecutes its development and use of technology. Nasdaq is no different, but to understand how deep technology runs in the fabric of the institution, it’s important to understand how tech is operated within the company.

As CIO and CTO, Peterson is responsible for Global Technology, and commands a staff of roughly 1,800, including contractors—or approximately 40 percent of Nasdaq’s workforce. He is fully responsible for delivering technology for the internal needs of Nasdaq’s operations, but also to the external-facing arm of the exchange group, known as Market Technology.

This division, acquired through the merger of Nasdaq with Sweden’s OMX Group in 2007, is led by Lars Ottersgård, head of Market Technology. It is responsible for seeing to the needs of all the exchange’s many external technology clients. Ottersgård himself is a study in contrasts to Peterson. Born in the Swedish town of Växjö, he grew up in Eskilstuna, located about 75 miles from the capital, Stockholm, and jokes that he is from an “uneventful background.”

He didn’t go down the traditional route of a college undergraduate degree in engineering or computer science, but had four years of technical education in high school. Instead, he joined IBM, where he spent nearly 20 years in a variety of roles, beginning as a technician, and later moving into sales. He moved to OMX Group in 2006 and has remained with the company ever since, eventually being promoted to his current role in 2014, running the exchange group’s vendor arm.

First of all, we make our list of things that we think are going to be most important for us. And it’s usually from an opportunity standpoint predominantly, and then we also look out for, if we’re too late, which one is going to likely disrupt us the most

That business is thriving. It supplies banks, brokers, other exchanges, regulators and, increasingly, buy-side firms with a number of technologies, ranging from the matching engines through to post-trade software, and risk and surveillance products, including its popular Smarts platform.

That it has lasted as long as it has is something of an oddity in the world of modern securities exchanges—while in the early part of the Millennium, most venue operators, including the London Stock Exchange, the Chicago Mercantile Exchange, and its then-arch rival, NYSE Euronext, operated vendor arms, most have since pared back their offerings, internalized their structures or eliminated them altogether.

Waters Wavelength

Wavelength Podcast Episode 148: A Look at APAC Trends for 2019

Wei-Shen Wong joins the podcast to discuss all things Asia: cloud, crypto, blockchain, AI, India-SGX and more.