Nasdaq OMX to buy Australia's surveillance technology firm Smarts

July 27, 2010 10:30 AM EDT

Stock exchange operator Nasdaq OMX Group Inc. on Tuesday announced its acquisition of Australia-based market surveillance technology firm Smarts Group.

Nasdaq said the purchase was part of its strategy to diversify its commercial technology business and enter the broker surveillance and compliance market. Smarts is a privately-held company that provides market surveillance systems to exchanges, brokers and regulators.

The acquisition move comes amid growing US demand for surveillance systems as regulators intensify scrutiny following the flash crash in May.

Financial terms of the transaction, which is expected to close within the third quarter, were not disclosed.

“The acquisition of Smarts is a strategic fit with Nasdaq OMX’s commercial technology business and allows us to capitalize on the growing demand for surveillance technology products in exchange, regulator and broker markets worldwide,” Anna Ewing, Chief Information Officer of Nasdaq OMX, said.

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With over 130 employees Smarts has over 30 national exchange and regulatory customers as well as 50 broking firm clients in more than 30 countries.

Smarts Group Holdings business is conducted primarily through two subsidiary companies Smarts Market Surveillance Pty Ltd., which provides services to securities exchanges and market regulators, and Smarts Broker Compliance Pty Ltd. that provides services to brokers.

“Being part of Nasdaq OMX provides enormous growth opportunities for Smarts surveillance technologies and provides us with the direct connection to the U.S. markets that we have been seeking,” Andreas Furche, chief executive of Smarts said.

Last month, Smarts signed up US-based global futures and OTC markets operator IntercontinentalExchange (ICE) to install its market surveillance platform, making ICE its largest derivatives customer.

Shares of Nasdaq OMX, which is reporting its second-quarter earnings later in the day, ended Monday's session 1.99 percent higher at $19.00.

This article is copyrighted by International Business Times, the business news leader