JOFOC - Nasdaq NMS - redacted.pdf

FOR OFFICIAL USE ONLY

Source Selection Information -- See FAR 2.101 and 3.104

JUSTIFICATION FOR OTHER THAN FULL AND OPEN COMPETITION

CFTC intends to solicit on a sole-source basis. The following rationale is provided in accordance with the requirements of Federal Acquisition Regulation (FAR) FAR 6.103-1 as established by the Revolutionary FAR Overhaul (RFO).

1. Identification of the Agency and the Contracting Activity.

This justification for other than full and open competition has been prepared by the Commodity Futures Trading Commission (“CFTC” or “Commission”), Business Operations Branch, 1155 21st Street, NW, Washington, DC 20581.

2. Nature and/or description of the action being approved.

The Divisions of Market Oversight (DMO) and Data (DOD) of the CFTC seek to acquire the Nasdaq Market Surveillance (NMS) solution to conduct comprehensive trade surveillance and market monitoring on the market data received and processed under the CFTC’s existing reporting obligations and regulatory oversight framework. NMS will be applied to both real-time and post-trade market data streams, specifically covering products and activity governed by the CFTC under its jurisdiction over designated contract markets (DCMs) and swap execution facilities (SEFs), and related intermediaries. NMS is a leading market surveillance technology used by CFTC registered exchanges, market participants, and other U.S. and foreign regulators to detect and prevent market manipulation and other disruptive trading activity.

Under the Commodity Exchange Act (CEA) and CFTC Regulations, the CFTC is authorized to detect, analyze, and enforce potentially manipulative and abusive trading practices, including spoofing, layering, wash trading, marking or banging the close, and front-running. To effectively facilitate the oversight requirements in the CEA and CFTC Regulations, DMO and DOD propose deployment of NMS, a market-leading surveillance system currently in production with over 20+ global exchanges, 17+ regulatory bodies, and 140+ market participants. NMS is designed to ingest native market data across CFTC asset classes and venues and supports CFTC products, including futures, options on futures, and swaps.

Key attributes for use of NMS include:

T+1 and retrospective surveillance across multi-CFTC DCMs and SEFs and cross-asset trading environments.

A comprehensive alert system tailored to CFTC specific trading activities, including configuration detection for the aforementioned potentially manipulative and abusive trading practices.

Proven integration with compliance workflows and escalation protocols aligned with existing regulatory audits and reporting requirements.

The CFTC DMO and DOD propose to directly award a contract to Adenza, Inc., a wholly owned subsidiary of Nasdaq.

3. A description of the supplies or services required to meet the agency’s needs (including the estimated value).

The proposed contract action is for a sole-source award to Adenza (i.e., Nasdaq) for its NMS Surveillance.

Specifically, NMS will cover market data received under the CFTC’s regulatory oversight and authority, including but not limited to:

Orders, trades, cancellations, and amendments Derived metrics such as order-to-trade rations and latency patterns Data across multiple CFTC registered DCMs and SEFs

The estimated cumulative contract value for the base year and four option years is $6,437,500, including:

4. An identification of the statutory authority permitting other than full and open competition.

The authority permitting the acquisition is 41 U.S.C. § 3304(a)(1), implemented via RFO FAR 6.103-1, “Only one responsible source and no other supplies or services will satisfy agency requirements.”

5. A demonstration that the proposed contractor’s unique qualifications or the nature of the acquisition requires use of the authority cited.

The implementation of a market surveillance system capable of handling high-volume, multi-venue trading data with T+1 detection of potential manipulation and/or other abusive trade practices in CFTC regulated derivatives markets requires a system that meets the highest standards of reliability, precision, and regulatory alignment. NMS, a Nasdaq product, is uniquely positioned to satisfy these requirements as it is the only commercially available surveillance solution that has been widely adopted and proved at scale across global exchanges, regulatory bodies, and trading platforms.

The NMS platform is operational at scale, supporting over 50 global marketplaces, 15 regulatory bodies, and 140 market participants. It is the only system that offers full-market surveillance capabilities—including depth-of-order book analysis across asset classes—with T+1 detection of market manipulation and cross-venue abuse. The tool’s integration with regulatory workflows and operational structure is unmatched in the industry, offering pre-configured and bespoke risk modeling tailored to regulatory oversight functions and rapid deployment.

While other vendors offer surveillance tools suited for internal and firm-level monitoring, they do not provide the level of market-wide oversight, integration, and data scalability required by the CFTC. NMS uniquely delivers the scope, depth, and timeliness (T+1) needed for a regulatory body of the CFTC’s mandate. NMS’ demonstrated experience with CFTC-registered entities, including support for approximately 40% of CFTC registered futures commission merchants, and its operational track record in the derivatives and equities space—processing over 60 billion messages daily—further supports its sole-source suitability.

Competing systems, , either lack the regulatory integration NMS provides or have not been demonstrated to meet the volume, complexity, or multi-market cross-asset functionality required. NMS’ offering is also supported by robust investigative tools, customizable risk detection, and pre-coded analytics (e.g., via Alice and Python language), enabling rapid deployment and regulatory efficiency.

As discussed below, while other surveillance vendors offer solutions targeted at regulatory bodies, like the CFTC, none currently offer the scope, depth, and T+1 scalability that NMS delivers. The other solutions discussed below are suitable for individual firms or exchanges monitoring their own order flow, but are not optimized for full-market or cross-venue surveillance from a regulatory oversight perspective.

6. A description of efforts made to ensure that offers are solicited from as many potential sources as possible, including whether a notice was or will be publicized as required by part 5 and, if not, which exception under part 5 applies.

Earlier this year, the CFTC researched multiple trade surveillance providers to assess the availability of commercially available trade surveillance systems. This research included an analysis of potentially competing vendors and technologies.

Additionally, pursuant to the requirements of RFO FAR 6.103(d)(2) and FAR 5.201(b)(1)(i), the CFTC posted a pre-solicitation notice of its intent to enter into a contract with Nasdaq on a sole source basis. The notice described the CFTC’s specific requirements, and stated that it would consider responses from all responsible sources received. The original announcement was posted on July 2, 2025 with a response date of July 10, 2025. No responses to this notice were received.

As previously stated, market research confirmed that no other vendor offers a commercially available bespoke system with the same breadth of integration and track record supporting regulatory bodies. As such, the statutory exception under RFO FAR 6.103-1 “Only one responsible source and no other supplies or services will satisfy agency requirements” is applicable and justified.

7. A determination by the contracting officer that the anticipated cost to the Government will be fair and reasonable.

Prior to award of the contract, the Contracting Officer will determine whether the proposed price is fair and reasonable using available commercial data. The Contracting Officer will verify that the vendor is proposing commercially available or better pricing.

8. The market research conducted (see part 10) and the results or a statement of the reason market research was not conducted.

Market research was conducted in accordance with RFO FAR 10.001. No other vendor that is located in the United States offers the same level of functionality and surveillance across CFTC registered DCMs and SEFs.

9. Any other facts supporting using other than full and open competition.

None.

10. A listing of the sources, if any, that expressed, in writing, an interest in the acquisition.

None.

11. A statement of the actions, if any, the agency may take to remove or overcome any barriers to competition before any subsequent acquisition for the supplies or services required.

If CFTC identifies additional competitors that can provide a service similar to NASDAQ’s, CFTC would solicit those eligible vendors in a future competition.

Certifications and Approvals

Technical Personnel Certification

I certify that evidence and any supporting data which form a basis for this justification are complete and accurate.

Edward Wehner Date Division of Data Commodity Futures Trading Commission

Contracting Officer’s certification pursuant to RFO FAR 6.104-1(a)(12), and Senior Procurement Executive’s approval pursuant to RFO FAR 6.104-2(a).

I certify that this justification is accurate and complete to the best of my knowledge and belief, and approve this justification.

William M. Roberson Date Contracting Officer / Senior Procurement Executive Commodity Futures Trading Commission