The aim of the Euronext market model is to secure the best possible liquidity for listed stocks. The guiding principle is that all companies are listed and traded on the same market through a centralized electronic order book. The trading system has been designed with three aims in mind: facilitate fair and transparent price formation, provide investors with speedy order execution and centralized liquidity, and enable listed companies to be continuously quoted.

Euronext is a centralised, order-driven market on which trading is supported by brokers. Orders are automatically sorted by limit price and subsequently by time of arrival in the order book.
Members and financial institutions that have direct access to trading on its markets. At the end of 2004, a total of 284 members were connected to Euronext’s cash markets.

However Euronext provides financial market participants with a comprehensive range of integrated services to meet the needs of listed companies. These services range from facilitating IPO, public offerings, marketing  and providing trading facilities for cash market data…

Liquidity providers make up one of the elements of the Euronext Market Model (EMM), implemented in 2001 for the harmonisation of the cash markets of the three founder countries of Euronext - Belgium, France and the Netherlands. This model has been extended from summer 2003 to the Lisbon market, which joined Euronext at the beginning of 2002.

Liquidity providers must be members of Euronext and hold the European passport. Only dealers (members entitled to trade exclusively for their own account) may act as liquidity providers. Liquidity providers sign a commercial agreement with Euronext N.V. whereby they undertake to quote two-way bid and offer prices, with a minimum volume size (expressed either in number of shares or in cash) and within a maximum price range or 'spread' (usually expressed in percentage).

In this way the liquidity provider acts as a 'market specialist' for its stocks, and as a result is often the principal point of contact for the issuing company. In the majority of cases (in Belgium and France), the liquidity provider agreement is combined with a liquidity contract* which links the issuing company to a Euronext market member offering a placing, analysis and advisory service, or specialising in initial public offerings (IPOs).

Liquidity providers concentrate mainly on small and mid caps. Large capitalizations, by definition, generate greater liquidity, so the criteria for market-making on these stocks are more restrictive. (Liquidity provider agreements are not permitted for any of the stocks included in the Euronext 100 index.)

Associate Members may be individuals and legal entities with specific technological, financial or legal expertise linked with financial markets, and actively contributing to their promotion.

This status requires a high quality service level and specific expertise to the benefit of companies before IPO and new listed companies.

This profile includes:

• Audit and accounting firms;
• Management and strategic planning consultants;
• Law firms;
• Banks IPO teams and their issuer services departments;
• Organisations, agencies or associations aiming at promoting enterprise and innovation;
• Financial communications agencies;
• Fund Managers;
• University professors in Economics, Management and Finance research;
• Venture and capital development companies.