Ladies and gentlemen, thank you for standing by and welcome to the Nasdaq Third Quarter 2020 Results. At this time, all participants' lines are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions]. Please be advised that today's conference is being recorded. [Operator Instructions]. I would now like to hand the conference over to your speaker today, Mr. Ed Ditmire, Vice President of Investor Relations. Please go ahead, sir.

Good morning, everyone. And thank you for joining us today to discuss Nasdaq's third quarter 2020 financial results. On the line are Adena Friedman, our CEO; Michael Ptasznik, our CFO; John Zecca, our Chief Legal and Regulatory Officer; and other members of the management team. After prepared remarks, we'll open up to Q&A. The press release and presentation are on our website. We intend to use the website as a means of disclosing material, non-public information and complying with disclosure obligations under SEC Regulation FD. I would like to remind you that certain statements in this presentation and during Q&A may relate to future events and expectations and as such, constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from these projections. Information concerning factors that could cause actual results to differ from forward-looking statements is contained in our press release and periodic reports filed with the SEC. Our forward-looking statements speak only as of today, October 21 2020, and NASDAQ assumes no obligation to update or revise any forward looking statements. Lastly, a quick programming mention we are excited to be hosting our Investor Day on November 10. Our senior leadership team will give presentations, better operations, opportunities and strategy and we’ll be available for your questions. I know many of you on the line today are planning to participate. If you have not registered, please do so today at our IR website. I will now turn the call over to Adena.

Thank you, Ed and good morning, everyone. Thank you for joining us. I'm pleased to report NASDAQ’s financial results for the third quarter of 2020. With our strategic ambitions as our guide, we have been consistently focused on delivering results for our clients while creating sustainable value for our stakeholders. Our global workforce has demonstrated their nimbleness and ability to remain highly productive and available to our clients throughout this period. That focus is reflected in today's strong results where we are seeing significant contributions from across our franchise. My remarks today will focus on business unit highlights and strategic initiatives from the third quarter. I will then touch on today's announcement about Michael's decision to retire and then Michael will cover the financials. Nasdaq delivered another quarter of strong performance driven by great efforts by our team, coupled with stapled favorable market conditions. Here are some of the highlights. We welcome to 105 IPOs of Nasdaq during the period which represents the highest number of IPOs for quarter on a U.S. exchange in the past decade. Conviction by investors to increase exposure to Nasdaq’s focus, semantic indexes, coupled with rigorous market performance continued to support our expanding index business. As a result, we saw the AUM in our index products achieve another quarter of record highs alongside high trading activity and Nasdaq license index derivatives. Our market infrastructure performed exceptionally well during the peaks of volatility we observed earlier this year, particularly in March and April. We continued to experience strong volumes across our equities and options businesses in the third quarter, and we've continued to invest to enable us to have capacity for future volatility as markets react to continually changing dynamics in the U.S. and globally. Our Data & Analytics business within information services as well as…

Thank you, Adena for those kinds of remarks, and good morning everyone. I will first provide comments on the quarter and then a few remarks about my decision to retire. My commentary on the quarter will primarily focus on our non-GAAP results and all comparisons will be to the prior year period unless otherwise noted. Reconciliations of U.S. GAAP to non-GAAP results can be found in our press release, as well as in our file located in the financial section of our Investor Relations website at ir.nasdaq.com. I will start by reviewing third quarter revenue performance as shown on page three of the presentation and organic revenue growth on pages four and 14. The $83 million increase in reported net revenue of $715 million is a net result of organic growth of $70 million, including 13% organic increase in market services, and 10% organic growth in the non-trading segments, a $4 million positive impact from acquisitions and a $9 million favorable impact from changes in foreign exchange rates. I will now review quarterly highlights within each of our reporting segments. I will start with information services, which as reflected on pages five and 14 saw a $40 million or 20% increase in revenue, excluding a positive $3 million impact from the acquisition of Solovis and a $1 million positive impact from favorable changes in foreign exchange rates. Organic revenue growth during this period was 18%, primarily reflecting very strong growth in our index business and positive contributions from each of the investment data and analytics and market data businesses. Operating margin of 65% increased 100 basis points compared to the prior year period. Market technology revenue as shown on pages six and 14 increased $2 million, or 2%, primarily reflecting a positive $3 million impact from favorable changes in foreign…

Thank you. [Operator instructions] Our first question comes from Rich Repetto with Piper Sandler. Your line is open.

Yes. Good morning, Adena. Good morning, Michael and Michael. Michael, despite that elegant explanation, you're still too young to retire, we think. No, I'm kidding. Congrats, and you've done a great job. Anyway, so my question is first, on the information services on the index revenue, some nice upside surprise. I guess Adena or Michael, can you give us a better feel for how the breakout, we see that the revenue grew by more than 50%. But the futures and options volumes grew almost double. So can you just give some more colors, how we can model this a little bit better, given your agreements with the CMA, and also the license, AUM that grew by over 50% as well. So how do you sort of model this a little bit better than what we have?

Sure. So thanks Rich. I think that the first thing I noticed. We've kind of given you a little bit of a guidance in the past to say that, that the index futures revenue kind of ranges from 10% to 20% of the overall revenues for the index business. And it's obviously ebbs and flows based on volume. So it's not we can't give you a precise percentage every quarter, but this quarter, it was 21%. So it's just at the top end of that or just above the top end of that range. And I think that that shows you the strength of the fact that we have a great relationship with CME and I think that we have a long term partnership with them and, and the indexes that we have to -- 100 for CME is particularly strong index this year, and one where we see a lot of investor appetite to invest in ETFs and the products as well as to use the futures markets to help hedge and manage their portfolios.

Okay, that's my, I'll get back in the queue. Thank you.

Thank you, Rich.

Thank you. Our next question comes from Dan Fannon with Jefferies. Your line is open.

Thanks. Good morning. I was hoping again you could expand upon your comments on the market tech side, obviously, the short term dynamics around some of the headwinds with revenue. But if we think about the 4Q sequential build that typically happens in that segment, how we should think about in the context of this year?

Sure. I think that it can kind of break down what we were trying to convey. The first is that they are ARR growth, which is really the recurring revenue streams that comes from our newer offerings that are SaaS oriented as well as trade [ph] for balanced business which is SaaS oriented. When those continue to see, you're seeing continued growth at 9% growth and we can continue to see that that will be a strong part of our franchise. And I think that we should recognize also that, that those types of implementations are more simple. They're just, they don't take as long to, to put a bring a company into the market, whether it's the marketplace services platform, or to bring them on to our trade surveillance or market surveillance platform. It's a, it's a bigger project, where we still do significant on-prem deliveries, where this year, we've definitely seen more of an impact of that. And if you think about it is there's a lot of collaboration that needs to go on between us and the client on so that particularly in the post trade deliveries, and we have several post rate deliveries that we're working on at the moment. And the pandemic made it harder to have that collaboration and it kind of created some, some challenges in terms of keeping up the pace of the original delivery schedule. And we've gotten, we've gotten better at that as we've gone through the year. And the clients also have gotten more used to it as well. But that I think definitely created some challenges. And then also just making sure that in order for us to make sure we're managing the pace of those, we have been making some increases in the tech team to make sure that we can deliver against that in this kind of constrained environment. And those are, those are short term issues. And those are the types of revenues that are non-recurring because they are delivery revenues. But they are, they continue to be an important part of the business. And then on change requests, it's really a matter of our ability. We actually have the capacity to implement change requests when the clients are looking for them. But when they're not, we obviously apply those people to the implementation projects. But we also are finding that clients are making change requests for sure, but just have a lower demand for those this year, because they're managing through other issues in their own organization. So I think you should assume those are shorter term trends that are really driven by the current environment, against the nice long term trend in terms of us increasing the percentage of sales that we're getting through SaaS, as well as continuing to move more of our products into a more flexible delivery mode with NFS. So I think I'm hoping that gives you an enough backdrop.

Great. Thank you.

Thank you. Our next question comes from Jeremy Campbell with Barclays. Your line is open.

Hey, thanks. And Michael, just want to say congratulations. I know you still have a few months left, but it’s been a pleasure working with you. And best of luck. You know, quick question on asset manager consolidation. It seems it’s up a bit over the past year, and reportedly the pipeline is pretty active right now. I know asset managers are kind of a major client base of Nasdaq in different parts of the ecosystem. But how should we think about the pluses and minuses of asset manager consolidation as it relates to your non-recurring revenue stream at Nasdaq, and could like some of this post deal integration be another potential near term headwinds from market tech?

Well, on the asset manager’s side, we don't actually have a lot of asset managers and clients in the market tech business. We tend to really focus in on market infrastructure operators, as well as broker dealers. And we do have a small business that we've been growing in the surveillance business formed by clients. So I think market tech won't, asset manager consolidation will be a significant issue there. And then if you look over in the information services business, we have thousands of asset manager clients. And so you are seeing, an occasional combination and that's where we also work with them to figure out if they're, let's say, both of the clients are investment clients, then we'll work with them to figure out well, what is the overall enterprise value going forward, that they should, they should, that we should be able to charge for investment on a combined basis versus a single basis. It's really a matter of us working with the clients on that. And certainly, if the client, one client is an investment client and the other one is not, then we have a chance of actually increasing our penetration in that client as they combine. So I think that's the way to look at it for the investment business. And same with areas like [Indiscernible] and others were which are still very small and growing. There's just a huge sea, as you know, of asset managers out there, it's for us to appeal to. On the trading side of the business, I don't anticipate that that will have a real impact because they're basically just managing more AUM with their trading organization, and that shouldn't have a significant impact on how much they're trading and how they're managing their portfolio. So I don't see an impact on the trading side.

Great, thank you.

Thank you. Our next question comes from Alex Kramm with UBS. Your line is open.

Yes, hey, good morning, everyone. This may be better for the investor day, but I do want to ask about M&A. You have clearly established a pretty strong track record here over the last years partially helped by Michael and you obviously as well, but if I look into next year, rates are low, 2021 is going to face a really tough comp on the trading side and on the index side. And your multiple has expanded substantially. So I'm just wondering, is this -- are you thinking differently about maybe bigger deals in the space? And if so, to what degree would you actually look at something that has a little bit more transactional revenues with it? And where there could be more of a cost driven value proposition? So maybe a broad update on M&A would be great here. Thanks.

Sure. Yes. We will spend a little bit more time on that in the Investor Day, Alex. So I think it is an area that will at least give you a sense of our focus areas. But I'll give you a little bit rough preview. I think what we've said all along is that we look at acquisitions as part of fitting into our strategy. So we don't just look at every acquisition out there. Optimistically, we have really developed a strategic nexus around where we want to grow and how we want to grow, and where we think that we can do everything organically and where we might benefit from acquisition sector to catalyze growth and/or expand our clientele. And I think that the areas that we have been primarily focused on, we've said this many times, is an expanding our Architect business and expanding our Information Services business in terms of growth to you're part of the sector of the industry. And then on the on the marketplace -- in the marketplaces, I think that we would make targeted acquisitions if it really makes sense in terms of both synergies on the cost side. And so therefore the ability to generate scale, but also that it furthers our strategy in the asset classes where we're really strong. But -- and all I can say is that, we looked at a lot of things. We do always put them within the strategic framework, so that we also stop looking at things on pretty quickly if it doesn't really fit in. And we will certainly not shy away from doing the right transactions that further our strategy. But that hasn't changed. We aren't not shifting our strategy from what we've been seeing over the last few years. So we'll spend a little more time on that at the Investor Day.

Thank you. And our next question comes from Brian Bedell with Deutsche Bank. Your line is open.

Great. Thanks. Good morning, folks. And Congrats, Michael also. And we'll talk to you for another quarter, but I just want to say, congrats. So just on the sustainability of that Information Services revenue, extremely strong this quarter. Looks like it's easy for you to now exceed the top of the 5% to 7% range even with the softness in Market Tech. But as we look at that Info Services moving into the fourth quarter and into next year, obviously, depending on volumes at T&E in your contracts and ETF, AUM levels, but it seems like there would still be an upward trajectory in that line. So just maybe some commentary about that? And to what extent, any audit fees positively impacted the market data. And then just thoughts about market data revenue coming into 2021, with consolidation, say in the online brokerage industry, for example, with Schwab and Ameritrade, and your ability to recoup that cost?

,: So, we do think that there's just a strong secular interest and appetite among investors to invest in the Nasdaq-100, the Biotech index, Semiconductor, other automatic indexes, in addition to our smart beta franchise. And then, we've seen that through both this kind of upward market swing, but also even in March, the largest inflow week that we had was the toughest market week, as the markets were declining the most, that's when we saw something like $4 million or $5 million of inflows into the Nasdaq-100. So, we just think that the indexes that we have are more align with long term themes. But I also would say, there is obviously some beta components there and on the trading. We are making sure that we continue to generate growth there by launching new products and making sure we gathering AUM into those products as well. And that will be a testament to our ability to do that over the next several years to continue to expand that franchise. With regard to the market data business, we are continuing -- I think the one thing that this year is shown, it's a very resilient business. And we have done a nice job of diversifying the clientele, which earlier in the year, we mentioned, could create some challenges just in terms of clients who are -- some of the newer clients in other parts of the world. But actually, we found that we continue to see really strong demand from those clients to continue to provide and expand the data that they're providing to investors around the world. So that's showing up in the numbers. And in fact, our audit revenue this quarter is significantly down from last year third quarter. And our audit revenue for the year is down from last year. So we're actually not collecting as much on the backfilling. We're really driving the growth that we're seeing this quarter is really just from pure new customers, and obviously, the expansion of our current clients. In terms of the consolidation and the impact from the online brokers, there will be some impact from that. And we've been -- we've known that for a long time. The nice thing is that it takes a long time of close these deals. So we've had a lot of time to work with this clients and continue to make sure that they're taking all the products that they can take from us as they become a combined organization. But we do also see continued strong demand coming from New FinTech clients. And so, I think that there's a nice balance there. But we've always said that that is a low to medium term -- I mean, low to mid single digit grower because it's a more mature part of our business. So hopefully that gives you more context.

And Brian, the audit number was $2 million in the quarter compared to as an unusually high quarter of nine in Q3 of 2019.

Great. Thank you so much for all the color. Really appreciate it.

Sure.

Thank you. Our next question comes from Mike Carrier with Bank of America. Your line is open.

Hi. Good morning, and thanks for taking the question. Good quarter. Just wanted to get an update on regulation. Given the DOJ [ph] working with the SEC on some areas like big market data. Just wanted to get your take on particularly from a process standpoint on how this is potentially different versus typical SEC process, meeting what to expect? Thanks.

Sure. Well, to be honest, we're reading about that the same way you are. So, I hope that you must to understand that there's nothing that -- we're reading at the same time you're reading it. So I think that the things -- that is the one thing I would like to say. And secondly, I think that we've been able to demonstrate multiple times over a decade, that we have a highly competitive market model that our products are subject to competition in the data space. And that we provide a great value for investors and participants alike in the market data that we provide. And I think we do it in a very responsible way. And I think we've proven that both to our customers. And we do have a very good relationship with our customers on the market data front despite some of the things that you see in the paper. But I have to say, behind the scenes, we continue to have very strong relationships across our clientele. As well as the fact that and in addition to that, we've had to defend ourselves several times now, both in a court like situation. And I think we've done. We've been able to prove ourselves over and over again, that this is a competitive space that we price our products competitively, and that we create great value for those people who use those data. So I think that, we remain very confident, Mike, in the way that we manage the business, as well as how we deliver products. And we're happy to engage with whoever wants to talk to us about that.

Okay. Make sense. Thanks a lot.

Thank you. Our next question comes from Owen Lau with Oppenheimer. Your line is open.

Okay. Good morning. Thank you for taking my questions. So first of all, best of luck in the future and Deltas, Mike.

Thank you very much.

Yes. So for my question, could you please give us an update on the Nasdaq private market? Does and will spec impact the private market and change the way you look at this space? Thank you.

That's the first I've got that question. So first of all, Nasdaq private market continues to have solid activity this year. It has been lower this year in terms of the overall level of tenders that have been issued in the private market this year. But generally speaking, we continue to have good clientele and a strong service that we offer the private companies, and they're still taking advantage of managing their liquidity in the private space. But it's been a little bit, I would say, decelerated a little bit this year just based on, I think, really the volatility and understanding, and the way that people are entering their businesses. But if you're asking, I think, a broader question is, because of all of the different alternative ways that companies can now tap into the public market, are they going to continue to stay private longer? And I think that's a good longer term question that we're going to have to see play out. So, our company is going to tap into the public markets earlier in their lifecycle, which may make it so that they have less of a demand to tenders. I don't think we can know the answer to that right now. I think that we are obviously seeing a lot of growth companies, but still quite mature, quite full on in terms of their overall ability to tap the public markets. I mean, we're still seeing high valuations and strong performance companies coming into the public markets both respects and through a traditional IPOs, and it's been a very active year. But I also think that there are just thousands of private companies that will continue to mature in the private space before they tap the public markets. And so, I personally think that the private market will continue to have a huge opportunity. We're really frankly, barely scratching the surface of private company's liquidity right now. And so, we have a lot more we can do there. But it is a good question as to whether more companies will come out to the public market sooner, and I just don't know the answer yet.

That's very helpful. Thank you, Adena.

Thank you. Our next question comes from Alex Blostein with Goldman Sachs. Your line is open.

Thanks. Hey, guys. Good morning. Question for you around Market Tech again. So, understanding the near term margin dynamics could sort of fluctuate, but I was hoping you could spend a minute just kind of walking us through the framework for margin from an opportunity here over time. And what I'm really kind of trying to get it, it's kind of what's the incremental margin on the ARPs [ph] instead of the revenue growth that you've seen there? What's the incremental margin on some of the on-prem initiatives that you guys have? And really just kind of incremental margin on the new order intake? Not sure if those are the best three kind of buckets to tackle it, but something along those lines will be helpful? Thanks.

Sure. I don't know, if I'll be able to answer that in detail today something, but we'll take it back and try to figure out how we can help with that as we get into Investor Day. I think that in terms of the margin dynamics, I think what we've been saying all along continues to be very much the case, which is, the more that we can move our clients into a SaaS offering. So whether it's market -- our market surveillance offering, as we've launched SaaS offering this year and we've seen strong pick up there. And that -- and our trade surveillance offering has always been SaaS. And those offerings definitely allow us to have a higher overall margin just because the implementation time is shorter. And it's a recurring revenue stream. And so it's just a different composition of revenue that delivers a stronger margin for us. Whereas with the on-prem implementations, we obviously manage to the margin that we think is the right way to go. But we do often do fixed price contracts there. So sometimes if implementation ends up being longer and more complex, it can make it like -- it can make it so that we end up having to put more resources to it, and that can have some margin impact in the short term on the implementation. And that's what's happening this year. But over time, I think the more we can show that we're -- the new sales for generating our NFS, which is a much more flexible platform, and SaaS driven and/or because some of the NFS deliveries are still on-prem, some are in are SaaS, as well as our surveillance business is all SaaS. So the more we can drive to that higher margin. And so it's up to us to show you that shift in the order intake and the type of order in take that we're taking in. And that's something that we want to make sure that we provide more context around at Investor Day in a few weeks.

Thank you. Our next question comes from Chris Harris with Wells Fargo. Your line is open.

Great. Thanks. Do you think the paradigm has changed for trading in U.S. equities and options? And really, I guess what I'm wondering is, whether you think the volumes that we're seeing in these markets are going to be sustainable? And why if so?

I think that they're two key factors that in our opinion are taking volumes to different levels this year. One is just overall volatility and uncertainty. And that always makes it so that you've got investors that have more different opinions, right? So when there are investors that have different views on what could happen next and how the economy is going to progress, you have more volatility, because those opinions all get expressed in the market and that drives our volumes. But at the same time, we also have a lot more younger retail investors coming into the markets as well. And so, I think that has to do with the fact that we do have more engagement around from retail investors. And those retail investors coming into the market, also drive volume stock. Now, the question is, are those retail investors as stainable trends? And I think that as we've been listening to the online brokers speak about it. And we've been talking to our own clients about it. I think that there's a view that there is a new wave of investors that have come in on the backs of zero commissions, which takes down the friction in the market, and therefore increases overall access, as well as the fact that the macro environment has created some really strong investment opportunities for retail investors. And I think that that is a longer term trend and a healthy one and an exciting one. But I don't think every one of those retail investors will be here over the long term. But I think we are seeing a secular shift in getting more younger investors engaged in the market. And I think that could create a more sustainably higher trading environment than what we saw in 2017, 2018, 2019 timeframe. But I think that time will tell. But that's our -- I think that's our overall view, just speaking with industry professionals who really understand the nature of the investors coming in.

Got it. Thank you.

Thank you. Our next question comes from a Kyle Voigt with KBW. Your line is open.

Hi, good morning. And just on the listings business, I know you cited the strong IPO market and some switches as well in the quarter. I guess, it's still a little bit surprising that revenues grew by $5 million sequentially given those initial listing fees are amortized over several years. So first part of the question, is there anything else to note that drove the increase there that's more one time in nature, or should this be sustainable? And the second part of the question, you're still priced below the NYC for certain tiers within that listings business, given the strength and the momentum, you're seeing in the business? And I know, you'd probably say, it's not necessarily because of low fees, because the value proposition. Just wondering, do you see potential for pricing tweaks as you look out over the next year or so? Thanks.

Sure. Well, one thing just to note is that the amortization of the initial listing fees is really the fees that get amortized. That amortization schedule did change a bit a few years, a couple years ago. So it's a little shorter than it used to be. But you're right, that the initial listing fees do get amortized. And I think, Michael, its for IPOs, its still over two years or two to three.

Yes, it depends. It's two to four years is the timeframe. Yes. But we also did -- we also did have a -- there was some pricing that was taken at the beginning of the year on the sustaining fees as well. And that's flowing through. It's been flowing through all the quarters so far this year.

Yes. And so I would just say that, first of all, there are no kind of one time fees that are creating that increase in the quarter. It is really -- it just the nature of the strength of new issuance market coupled with the strength in our corporate solutions business. And those are recurring revenue streams. So I do -- I think that's important thing to say. But I think that because of the fact that new issuances have been high throughout the year, you're starting to see that compounding effect of that as we get more and more issuance -- issuers in the market. And then they then start to generate annual listing fees, which will then create a list going into 2021. So that's the good news is it is kind of really just coming from the strength of new issuances. I just wanted to make sure you know that the amortization schedule is a little different than it was a few years ago.

Fair enough. And then just on the potential for pricing tweaks?

Alright. Yes. So we are very prudent in the way that we manage our fees. We're very proud of the fact that we deliver a really strong value to our clients. And we never want to give our top clients any reason to even consider an alternative. And fees do play a role in that. I wouldn't say that it's -- you're right, it's not the reason they switched to Nasdaq. But it can be a door opener for them to consider. They're paying $500,000 to list on your and they're paying $160,000 to list here. And they're getting frankly, in our opinion a far superior service here. Then it allows us to open the door to a conversation and then work with them on all the other aspects of our value proposition to have them move over. So I would have to say, the key differential is a catalyst to conversations on switches. And for IPOs, we think that we offer fee structure that is a strong reflection of the value that we give to our clients. And I think its -- so, we feel good about how we tear our fees in the max that we charge. And we'll continue to make pricing changes periodically to reflect the increased investments we're making in the business. But we don't see a reason frankly, to make a big change in our fees at the top end.

Thank you.

Thank you. We have a follow-up from Alex Kramm with UBS. Your line is open.

Hey. Yes, my follow up was actually just answered on the listings. But very quickly, then maybe on index and other numbers question. You gave the, I guess, the trading contribution. Can you also give the AUM contribution, the exact number for this quarter?

Sure. I know it's -- Michael, you might have it more readily available. But I know within any given quarters, like 60% to 65%.

Yes. That's what the answer is 65%. I don't know, do you have the exact number for this quarter. But I think it's in that range.

I think it's in that range, Alex. But probably towards the lower end, since the futures towards the high end.

Right.

Fair enough. Thank you.

Sure. And just to make up the difference is the data. So we should say, the index data, index AUM, and the futures volumes of the three components of the index systems.

Yep. Thanks.

Thank you. We have a follow up from Rich Repetto with Piper Sandler. Your line is open.

Yes. Hi, Adena. couldn't let the call go by without asking about financial transaction tax.

Yes.

So, I guess the question is, what are you doing to prepare? Are you having discussions with legislators? I know, certainly, there's been a lot in the press about potentially moving. Is that really possible? So what are your thoughts on all this debate on the financial transaction -- or a financial transaction tax?

Sure. So I think the first thing to say is, we're heavily engaged with the New Jersey Legislature and the Governor. We also have been receiving inbound calls from governors from other states to certainly would welcome us as a data center operator or a company that uses data centers in their states as well. The nice thing about the way that we manage our infrastructure is that we don't actually own any of our data centers. We work with Equinix as our partner today. And so, we do have flexibility. We've moved our data centers in the past. So we used to operate out of Trumbull, Connecticut. We moved Carteret several years ago. And then also, we used to be in Ashburn, Virginia for our backup or now in Chicago. So we do have experienced moving data centers. We've also moved our data centers in Sweden. So we are familiar with what that takes. And I think that obviously, in this particular context, it's not just us, we have to work very, very closely with our clients, because our clients are all embedded in our data centers, as well. And they've built infrastructure to support connections between Chicago and New Jersey. So there is an investment that would need to be made in order for us as an ecosystem to choose to go to a different state. But it is absolutely feasible to do it. I think that what we've made clear is that, we certainly operate well in New Jersey. And we have a well established ecosystem here. And if we don't think there's a risk of a tax, then that's something that would obviously be our first choice. But if we believe that the state could impose a tax, just because our data centers happen to be located in their state, and that tax creates friction in the market, that then lessens participation from investors, particularly retail investors, then widen spreads and lowers liquidity, we have to do the responsible thing and find an environment that doesn't introduce oppression. And in every other cases you know, Rich, that transaction taxes have been implemented in other countries, they've seen really negative effects on liquidity and spreads. And so, we have a lot of proof points to say, friction matters, taxes create a friction, and it will have a negative impact, right at a time when given the volatility we really needed to maximize liquidity in the market. So we are like serious about it. And we are heavily engaged with New Jersey and other states to understand the best long term path for it.

Thank you. And just, I think there is a coalition among the exchanges to sort of represent your position. And I think Nasdaq is part of it. But I haven't heard as much outside about it, I guess?

I would just say that there's a wide range of participants, market resistance and exchanges involved and understanding the -- and involved in speaking with the legislature on this issue. Just quickly to get back out to Alex Kramm's question. The specific percentage of revenue coming from AUM in the quarter within our indexes was 63%.

And just to add to that Adena, it was about 24% on the index licensing side -- on the futures licensing side?

Oh, it's 24, not 21. Okay. Thank you.

Thank you.

Okay. So, Rich, I hope that answers your question. Thank you.

Sure does. Thank you.

Thank you. Our next question comes from Ken Hill with Loop Capital. Your line is open.

Hey, good morning. First, I just want to say congrats to Michael and Ann [ph] on the transition there. My questions on the Q's innovation suite you guys launched. I know, I was just curious from an economic perspective to Nasdaq. Are there new products being rolled out? Do this have any different pricing or any different economics for Nasdaq given maybe like a lower cost product? I know you're rolling out with the Q's, or an alternative type of product there. And then I guess, just thinking forward, are there any other additional products, you might be looking to slice and dice a little bit differently here within the index suite?

Sure. So on the first point, we don't tend to talk specifically about how we structure theses with each individual partner. But I would say that we're very comfortable with how we've built this partnership with Invesco, and to make sure that we are getting properly compensated for the value of the indexes. And so, I think we feel comfortable that if the clients choose the new products, so they choose the current products, we're very happy with the fee rate that we're getting. In terms of other new products, that's actually the most fun part of the index team. They're always considering new strategies and new ways that we can look at both our benchmark like the Nasdaq-100 and Biotech as well as more thematic indexes to bring creativity to investors. And so, we are constantly working with our index partners to find new ways to slice and dice it. So for instance, I think it was a Victory, where we also have implemented the Nasdaq-250, which is the next 50 stocks below the Nasdaq-100. So we have kind of different ways that people can choose to participate in the broader Nasdaq franchise for different partners.

Okay. Thanks for the color there.

Thank you. We have a question from Brian Bedell with Deutsche Bank. Your line is open.

Great. Thanks for the follow up. Just on the U.S. cash equities market in terms of pricing and revenue captures. We sort of moving into the end of the year. Two dynamics going on there. Obviously, one, we're seeing more volume getting executed off exchange. I suspect that's a part of the retail dynamic and market maker dynamic. Maybe if you could just talk about that? And whether there's any interest in pricing initiatives to capture more of that share. And then, any sort of thoughts on members exchange. And that was seems like that was delayed a little bit. But in terms of pricing, whether you would be doing any pre-emptive pricing against that exchange coming into the fourth quarter?

Okay. So with cash equities pricing, the first thing I would say is, as you all know, it's something that we work on very dynamically, and we make small changes pricing almost monthly actually within their cash equities business. And so, I would say that we're always watching that and working with our clients to understand how we can bring attractive flow into the Nasdaq exchanges. And in terms of the retail trying to get more of the retail to come on to exchange from off exchange. You are correct, that the retail trend has driven a higher level off exchange volumes. And so those orders are not getting subject to the price discovery that we have on market. We'd love to get -- capture more of that. But we also reflect on the fact that the intermediaries have a flow scheme that's different than our exchange fee scheme. So we have to work within the exchange fee structure that we're allowed to operate in. And that will limit our ability to kind of bring in a lot of that new retail office that's going off exchange. But we are always talking to them about on the margins, how can we get more of the retail flow to come through to the exchange. I think that in terms of OMX [ph], and the way that we're managing that, we are highly engaged with our clients we have been now ever since they announced that they were forming OMX. And we take every competitor seriously. And to the extent that we see changes in behaviors among our clients, we will first on to make sure that we are maximizing and optimizing our platform. And we're having those that dialogue all the time. So I wouldn't say that you're going to see dramatic things, but more an ongoing effort from a pricing perspective to manage to that, competitor to the extent that they have early success.

Great. That's very helpful. Thank you.

Thank you. And there are no other questions in the queue. I'd like to turn the call back to Adena Friedman for any closing remarks.

Great. Thank you very much. Well, I just want to thank you all. And I do want to again, thank Michael, for just an amazing time together. I mean we've had, we've really are great partners. And he's also done a spectacular job of preparing Ann for the role. He's sponsored her and mentored her. I've had a chance to work very closely with Ann over the years. And so I just can't be more excited to say that, despite the fact that we're very sad to see Michael leave, we're excited for him in his next step. And we are just thrilled that we have such a strong internal candidate to come in and take the role of CFO. And of course, you get to see Michael a lot over the next few months, including at our investor day, which is on November 10. And we hope that you all join us either virtually or in person and we look forward to that. So thank you all very much and have a great day.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating, you may now disconnect everyone. Have a great day.