In respect of the listing of Euronext shares on Euronext Paris, the following provisions of the French financial markets regulations apply to Euronext:

• AMF general regulations, book II, Title II, chapter 2 regarding the dissemination of information when an application to admit securities to listing is made;
• AMF general regulations book VI, Title I, chapter 6 regarding the appointment in France of a permanent correspondent with the AMF;
• certain parts of AMF general regulations, book II, Title II, chapter 1 regarding periodic information to be provided to the public;
• AMF general regulations book II, Title II, chapter 2 requiring issuers to provide permanent information to the public;
• AMF general regulations book II, Title IV regarding the dissemination of information during buy-back programs for securities that have been admitted to listing on a regulated market, without prejudice where appropriate to European Commission regulation (EC) 2273/2003 of 22 December 2003; and
• AMF general regulations book VI regarding insider trading and market abuse.

In respect of the listing of Euronext shares on the Trading Facility Market organised by Euronext Brussels, the following provisions of the Belgian financial market regulations apply:

• Royal Decree of 31 March 2003 on the obligations of issuers of financial instruments admitted to trading on a Belgian regulated market;
• In respect to the market abuse regime in Belgium, articles 25, 25bis, 40 and 41 of the Law of 2 August 2002 on the supervision of the financial sector and on financial services.

In addition, the rules governing the organisation and functioning of the markets (the Euronext Rulebooks) are applicable to Euronext as a listed issuer. The Euronext Rulebooks may be consulted at the offices of all Euronext locations and is available on Euronext’s website. The Dutch statutory provisions governing tender offers will apply to Euronext until the Takeover Directive is transposed in national laws, which is expected to be in 2006. The Dutch statutory provisions governing the disclosure of holdings exceeding certain thresholds in Euronext’s capital are described in section 6.2.2.5.

In addition to the laws and statutory provisions applicable to Euronext summarised above, Euronext has to comply with public information requirements. Euronext is listed on the Eurolist Market (former Premier Marché of Euronext Paris) and is traded on the Traded-But-Not-Listed segment operated by Euronext Amsterdam and traded but not listed on the Belgian regulated market Trading Facility.

National disclosure requirements were modified in 2005 (or are still being modified) in order to implement at national level the Market Abuse Directive. Disclosure requirements will be further modified when the Transparency Directive is implemented in national law (transposition should take place at the beginning of 2007).

Euronext markets overview
From a regulatory perspective, and without prejudice to its unified operational structure, Euronext is the sole owner of the market operators in Amsterdam, Brussels, Lisbon, London and Paris, which in turn hold the national regulatory licences to operate the local financial markets.

Euronext’s regulated markets are as follows:

• Euronext Amsterdam operates two regulated markets: one stock market (Eurolist by Euronext) and one Derivative Market;
• Euronext Brussels operates three regulated markets: two stock markets (Eurolist by Euronext and the Trading Facility), and one Derivative Market, the Belgian futures and options market;
• Euronext Lisbon operates two regulated markets: one stock market (Eurolist by Euronext) and one Derivative Market, the Mercado de Futuros e Opções;
• Euronext Paris operates three regulated markets: one stock market (Eurolist by Euronext) and two Derivative Markets (Monep and Matif); and
• LIFFE Administration and Management operates one regulated market, the Derivative Market Euronext.liffe.

Euronext also operates the following non-regulated markets:

• in Amsterdam, the Traded-But-Not-Listed segment ( Categorie Verhandeling). Euronext Amsterdam experts to create a new nonregulated market, Alternext, in 2006;
• in Brussels, the Marché Libre for companies that do not want to abide by specific listing requirements or ongoing obligations and the Public Auction Markets (Ventes publiques) for trading securities which are non listed but traded on an occasional basis. Euronext Brussels expects to create a new non-regulated market, Alternext, in 2006;
• in Lisbon, the Unlisted market/Mercado Sem Cotações, which is a stock market with minimal listing requirements and EasyNext Lisbon, which is a new non-regulated market for structured products. Inearly 2006, EasyNext was introduced for listing and trading of Bonds. Euronext Lisbon expects to introduce Alternext in 2006; and
• in Paris, Alternext for companies willing to submit to tailored reporting and disclosure duties without being listed on a regulated market and the Marché Libre for companies or offering shareholders that do not want to abide by the listing requirements of a regulated market or of Alternext.

The Euronext Rulebooks currently consists of two books:

• book I contains the harmonised rules, including rules of conduct and enforcement rules that are designed to protect the markets, as well as rules on listing, trading and membership;
• book II contains all rules of the individual markets that have not been harmonised.

The notices adopted by Euronext for the enforcement of book I apply to all Euronext markets (unless otherwise specified), while those for the enforcement of book II are specific to local jurisdictions. The regulators in Belgium, France, the Netherlands, Portugal and the United Kingdom have approved the market rules of books I and II. The following rules have been integrated in book I:

• membership rules for Cash Markets and Derivative Markets;
• trading rules for Cash Markets and Derivative Markets;
• listing rules for Cash Markets;
• rules of conduct for Cash Markets and Derivative Markets;
• transparency obligations for certain issuers (applicable only to Cash Markets); and
• enforcement of the rules (applicable to Cash Markets and Derivative Markets).

Euronext intends to continue to harmonise as rapidly as possible in order to transfer rules from book II to book I.

The Euronext Rulebooks and all subsequent amendments have to be submitted to the regulators of Euronext and those of its subsidiaries. On 22 March 2001 the COB (Commission des Opérations de Bourse) and the CMF (Conseil des Marchés Financiers) which merged to create in 2003, the CBF (now CBFA), and the STE (now the AFM) – the regulators responsible for overseeing Euronext and its subsidiaries – signed a memorandum of understanding to co-ordinate the supervision and regulation of Euronext’s market activities and the associated regulated markets it operates. The memorandum of understanding covers the following matters:

• creation of a chairmen’s committee composed of the Chairman of each of the regulatory authorities that signed the memorandum of understanding;
• creation of a steering committee composed of a representative of each of the principal authorities that signed the memorandum of understanding;
• regular meetings between the chairmen’s committee and the Managing Board; and
• prior agreement of the chairmen’s committee to certain decisions made by the subsidiaries of Euronext regarding such matters as its articles of association and those of its subsidiaries, the Euronext Rulebooks, any subsequent amendments to these documents, the creation of alliances, mergers, cross-holdings and cross-membership agreements, the implementation of integration and restructuring measures, the supervision of trading members’ activities, the monitoring of transactions, and the opening or closing of a regulated market.

The CMVM signed the memorandum of understanding, on 26 March 2002. On 3 March 2003, these regulators, together with the FSA in the UK, also agreed on the provisions of a separate memorandum of understanding in relation to all of Euronext’s Derivative Market activities. Euronext continues to discuss with its regulators ways in which the arrangements implemented pursuant to these memoranda of understanding can be enhanced.

Euronext Amsterdam
Euronext Amsterdam, a subsidiary of Euronext, operates one stock market and one Derivative Market. Under article 22 of the Dutch Securities Act, the establishment of a recognised securities exchange in the Netherlands is subject to prior authorisation by the Dutch Minister of Finance who may, at any time, amend or revoke this authorisation if this is necessary to ensure the proper functioning of the markets or the protection of the investors. Authorisation may also be revoked for noncompliance with applicable rules. It should be noted that the exchange licence was jointly issued to Euronext Amsterdam and Euronext.

Among other responsibilities, AFM, together with DNB, acts as the regulatory authority for members of Euronext Amsterdam, supervises the primary and secondary markets, ensures compliance with market rules, and monitors clearing and settlement operations, while the Dutch Minister of Finance authorises the recognition of exchanges, ensures compliance with European Directives, and issues declarations of no objection in connection with the acquisition of significant shareholdings in Euronext or Euronext Amsterdam.

On 1 July 2005, Euronext Amsterdam relinquished its responsibility for approving prospectuses. This authority was transferred to the AFM, pursuant to the implementation of the Prospectus Directive. Euronext Amsterdam is still responsible for admitting financial instruments to listing on its markets. It is also in charge of establishing, monitoring compliance with and enforcing rules governing its primary markets. Responsibility for dealing with market abuse was transferred to the AFM on 1 October 2005, pursuant to the implementation of the Market Abuse Directive. Finally, the Dutch Minister of Finance has imposed on Euronext Amsterdam and Euronext a number of specific conditions and restrictions regarding the integration process. In particular, both entities are required to inform the AFM of  progress made in integration. Furthermore, the Dutch Minister of Finance and/or the AFM have to give prior approval for certain decisions, which include:

• major integration steps affecting the operation of the exchanges in the Netherlands;
• adoption of the applicable Rulebooks;
• any merger or similar arrangement involving Euronext in far as these may affect the operation of the exchanges in the Netherlands.

In certain cases, the Dutch Minister of Finance has the discretion to amend or supplement any conditions or restrictions stipulated in connection with the exchange recognition.

Euronext Brussels
Euronext Brussels, a subsidiary of Euronext, is the market operator for the following three Belgian regulated markets: Eurolist by Euronext, the Trading Facility and the Belgian Derivative Market. Euronext Brussels is governed by the Belgian Act of 2 August 2002 which entered into force on 1 June 2003 and is recognised as a market undertaking according to article 16 of this Act. The principal subject of that law was to transfer to the CBFA some of the competences previously executed by the exchange (disciplinary powers against members and issuers, control of sensitive information, supervision of the markets, and investigative powers). Euronext Brussels continues to be responsible for matters such as the organisation of the markets and the admission, suspension and exclusion of members, and has been appointed by law as a “competent authority” within the meaning of the Prospectus Directive. Euronext Brussels, also governs two non-regulated markets: the Marché Libre created in October 2004 and the Public Auction Market for non-listed companies.

Euronext Lisbon
Euronext Lisbon, a subsidiary of Euronext, is the recognised market operator of the two Portuguese regulated markets: Eurolist by Euronext and the Derivative Market (Mercado de Futuros e Opções). It is governed by the Decree of Law no. 394/99 of 13 October 1999 (Regime Jurídico das Entidades Gestoras de Mercados de Valores Mobiliários e de Sistemas Conexos), which, along with the Portuguese Securities Code and the CMVM regulations, governs the legal regime for regulated and non-regulated markets, market operators and all companies with related activities. This act was amended on 15 January 2002 (Decree of Law no. 8-D/2002) to allow Euronext to acquire all the shares of BVLP and to allow an amendment to the articles of association which, until that date, restricted voting rights to 15%. The creation of regulated markets is subject to prior authorisation in the form of a decree from the Portuguese Minister of Finance, following consultation with the CMVM. The CMVM is an independent public authority that monitors the markets and market participants, public offerings and collective investment undertakings. In addition, a regulated market must be registered with the CMVM prior to starting operations. The Portuguese Minister of Finance may withdraw recognition of a regulated market in certain cases stipulated in the above-mentioned Decree of Law.

The CMVM is the regulatory authority for Euronext Lisbon as stipulated in the Portuguese Securities Code.

Euronext Paris
Euronext Paris, a subsidiary of Euronext, is the market operator that manages the three French regulated markets: Eurolist by Euronext Monep and Matif. Euronext Paris is governed by French Law no. 96-597 dated 2 July 1996, as amended and codified in the French Monetary and Financial Code, which implemented the European Investments Services Directive in French law.

Under the French Monetary and Financial Code, the French Minister of Finance has the authority to confer or revoke regulated market status on the recommendation of the AMF and following an opinion from Banque de France. This status is granted if the market meets specific conditions for proper operation. In particular, the market must have rules governing access to the market, listing of securities, the organisation of trading, the suspension of trading, and the recording and publication of trades. The AMF is responsible for safeguarding investments in financial instruments and in all other savings and investment vehicles, ensuring that investors receive material information, and maintaining orderly financial markets. It establishes the rules of conduct that must be observed by market operators and their personnel, determining the conditions for granting or revoking professional licenses for individuals acting on behalf of market operators, and establishing the general principles for the organisation and operation of regulated markets. It is also responsible for formulating the rules governing the execution and publication of transactions involving securities or futures and options contracts listed on these markets. It also has the authority to regulate and monitor IPOs (i.e. vetting of prospectuses), financial communication of listed companies and tender offers. It can oppose the decision of a market operator to admit a security or a futures and/or option contract to trading on its market.

Furthermore, as mentioned above, the AMF makes recommendations to the French Minister of Finance on conferring regulated market status. Finally, the AMF approves the Rulebooks of regulated markets. All amendments to the Rulebooks of a regulated market are subject to the prior approval of the AMF following an opinion from Banque de France. The AMF is also empowered to lay down standards for certain non-regulated markets or obligations for persons having made forms of public offerings other than listing on a regulated market, which may be relevant for the operation of non-regulated markets by Euronext Paris (notably Alternext and the Marché Libre). In addition to its status as a market operator, Euronext Paris is approved as a specialised financial institution.

It is therefore governed by French banking legislation and regulations (notably the Banking Act as amended and codified in the French Monetary and Financial Code), which means that it is subject to supervision by the Comité des Établissements de Crédit et des Entreprises d’Investissement (CECEI) and the Banking Commission. As such, it must comply with prudential ratios related to the banking regulation applicable to its activities (on a consolidated basis at the 2005 balance sheet date, prudential equity amounted to €222 million, and the solvency ratio to 44.8%).

LIFFE
LIFFE is a UK company formed on 25 February 1988 and is governed by the UK Companies Acts of 1985 and 1989. LIFFE shares are held by Euronext UK plc, a subsidiary of Euronext. LIFFE has three principal regulated subsidiaries: LIFFE Administration and Management and LIFFE Services Ltd in the UK, and NQLX LLC in the USA.

LIFFE manages the markets for financial derivatives and Commodity Derivatives in London, which are overseen by the FSA pursuant to the Financial Services and Markets Act 2000.

Under current legislation, LIFFE is designated as a recognised investment exchange under Financial Services and Markets Act 2000. As such, LIFFE is required to maintain sufficient financial resources for the proper performance of its functions (requirement to hold £52 million of cash in its assets based on 2005 financials). LIFFE Services Limited is a technology supplier and is also governed by the FSA regulations as a service company. NQLX LLC is a wholly owned indirect subsidiary of LIFFE NQLX LLC, which is registered with the SEC, is regulated in the US by the Commodity Futures Trading Commission (CFTC). NQLX LLC will retain its status as a designated contract market in anticipation of listing other contracts in the future. In the UK, financial services legislation comes under the jurisdiction of Her Majesty’s Treasury, whilst responsibility for overseeing the conduct of regulated activity rests with the FSA.