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Nasdaq's venture arm agreed on Sept. 10 to invest $100 million in Payward, Kraken's parent company, alongside a deal that puts Nasdaq surveillance across Payward's portfolio of trading venues spanning crypto, equities, tokenized equities, futures and options. One day earlier, Citadel Securities asked U.S. regulators to keep equity-linked products including event contracts and perpetual derivatives inside the SEC's perimeter. The two moves together expose the regulatory gate that any always-on market must clear: surveillance can monitor what crosses a venue, but it cannot decide what a product is under federal law.
Why it matters
Product classification, not technology, is the gating question. CFTC Regulation 40.2 lets a designated contract market self-certify a product the prior business day; Regulation 40.3 offers a slower voluntary-approval route. SEC exchange filings run through proposed rule changes, as Cboe and MEMX have used this summer for binary KPI options and securities event contracts. A single equity-linked instrument could therefore reach users under a CFTC DCM certification, an SEC exchange rule filing, or a securities-based swap framework, each carrying different disclosure, best-execution and halts protections. Nasdaq's March 18, 2026 SEC approval for tokenized securities in a DTC pilot set the conditions for that SEC track: fungible shares, the same CUSIP, the same order book, and execution priority unchanged. That approval did not equal a launch.
Market impact
The Payward deal is forward-looking by design. Nasdaq's investor release names covered asset classes but gives no deployment date and does not commit to combining venue activity with cash-equity order data. Nasdaq separately expects Nasdaq Equity Tokens (NETs), built with Payward, to launch in Q2 2027. The CFTC's May 29, 2026 approval of KalshiEX's bitcoin-referencing BTCPERP under Reg 40.3 was paired with a policy statement calling for case-by-case review of perpetuals tied to other asset classes, leaving equity-linked perpetuals unresolved. The SEC's Sept. 17 roundtable on 24-hour trading will gather exchange, broker and post-trade voices on overnight surveillance and closing-price processes, but it is a public discussion, not a rulemaking. Until cross-market data access and statutory classification align, the products that win durable US liquidity will combine continuous monitoring, an SEC-or-CFTC fit, and a classification regulators can defend.
Frequently asked questions
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What did Nasdaq agree to with Payward, Kraken's parent?
Nasdaq's venture arm agreed on Sept. 10 to invest $100 million in Payward and to roll out Nasdaq surveillance across Payward's portfolio of trading venues covering crypto, equities, tokenized equities, futures and options.
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Why is Citadel asking regulators to keep equity-linked products in the SEC's perimeter?
Citadel's Sept. 9 comment letter argued that misconduct such as insider trading can cross venue boundaries, so effective oversight must reach both an equity-linked derivative and the underlying cash equity, which it says sits in SEC territory.
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Can surveillance technology alone decide whether a tokenized product is regulated by the SEC or CFTC?
No. Nasdaq's technology can monitor trading across Payward's venues, but it cannot decide whether an equity-linked instrument is classified as a security, security-based swap, swap, or futures contract under federal law.
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What regulatory routes can an equity-linked perpetual take to reach US users?
A venue can self-certify under CFTC Regulation 40.2 by the prior business day, seek voluntary approval under Reg 40.3, or file a proposed rule change with the SEC, as Cboe and MEMX did this summer for binary KPI options and securities event contracts.
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When is Nasdaq's tokenized equity product (NETs) expected to launch with Payward?
Nasdaq expects NETs to launch in the second quarter of 2027, separate from the March 18, 2026 SEC approval of its DTC pilot framework, which still requires DTC infrastructure and 30-day member notice before trading begins.
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