Building the leading European market infrastructure

Back

From the first 17th century marketplace to providing tomorrow's sustainable growth products, Euronext has been financing the real economy for over 400 years.

Over 20 years ago, Euronext’s founding fathers embraced the concept of creating a European capital markets union. They saw the harmonisation of the European Union’s financial markets as an opportunity to build something unique: a pan-European market infrastructure that would provide local businesses and investor communities with unrivalled access to capital and liquidity.

The first step on the journey began by uniting three exchanges with deep historical roots and locations at the heart of the European financial marketplace.

Creating the first cross-border exchange

On 22 September 2000, the exchanges of Amsterdam, Brussels and Paris combined to create Euronext, the first genuinely cross-border exchange in Europe. Euronext combined the continental exchanges into a unique federal model with unified rules and a Single Order Book, operating on the same electronic trading platform and cleared by LCH S.A. CCP. Registered in Amsterdam with its headquarters in Paris, the fledgling company expanded rapidly, going public in 2001. It acquired the London-based derivatives market, LIFFE, shortly thereafter and the Lisbon Stock Exchange, including central securities depository Interbolsa, in 2002.

On this foundation, Euronext’s creators wanted to design an organisation that incorporated the individual strengths and assets of each market, while retaining the deep, well-established links the individual exchanges had with local companies, investors, intermediaries and regulators. At the same time, by joining Euronext, the exchanges could offer local investors a gateway to international financial markets, and open up their local markets to international investors.

 

Did you know? The Amsterdam Stock Exchange is considered the first “modern” Stock Exchange in the world. It was created early in the 17th century by the Dutch East India Company.

From European roots to global ambition

In 2007, Euronext merged with the New York Stock Exchange to form NYSE Euronext. The newly-formed company continued to grow, moving all its European exchanges to the Universal Trading Platform (UTP) technology.

Intercontinental Exchange (ICE) took over NYSE Euronext in 2013. A key element of the transaction was to carve out NYSE Euronext’s continental European exchanges into a stand-alone entity. Thus in 2014, ICE launched an initial public offering (IPO) of Euronext, which once again became an independent company, Euronext N.V.

The IPO marked the beginning of a new era of expansion, where Euronext would move beyond exchanges to build the foundation of a European market infrastructure. Under the leadership of Stéphane Boujnah, CEO and Chairman of the Managing Board of Euronext, the Group began a transformational journey with two key drivers: welcoming additional European market infrastructures to strengthen the historical Euronext federal model, and diversifying into new asset classes with business innovation and value-driven acquisitions. In 2015, Euronext created a Corporate Services franchise for issuers and private companies, and in 2017 it entered the spot FX business with the acquisition of FastMatch (now Euronext FX).

The Group made its first major new expansion into Europe in 2018 with the acquisition of the Irish Stock Exchange, and consequently acquired Oslo Børs VPS in 2019, in line with its aim of building strong capital markets in Europe by bringing together historic marketplaces. With these new acquisitions, Euronext became the leading debt listing venue globally with more than 52,000 total bonds listed, and expanded into the Nordic region for the first time while boosting its central securities depository (CSD) activity. This was strengthened in 2020 by the acquisition of VP Securities, the Danish CSD. Also in 2020, Euronext entered the power market by acquiring a majority stake in Nord Pool, Europe’s leading power trading infrastructure. Nord Pool operates in the Nordic region, the Baltics and Central and Western Europe, and supports power trading in 16 countries.

2021 was a pivotal year for Euronext. The Group acquired the Borsa Italiana Stock Exchange along with central securities depository Monte Titoli (Euronext Securities Milan), clearing house CC&G (Euronext Clearing), and leading electronic bond platform, MTS. Italy, which is the third-largest European economy and a G7 country, became the seventh country to join the Euronext federal model.

 

Did you know? Amsterdam was the first stock exchange in the world to admit a woman member, Henriëtte Deterding, in 1923, closely followed in 1925 by Oonah Keogh in Dublin.

Did you know? The Danish CSD, at that time named VP Securities, now Euronext Securities Copenhagen, was the first CSD in the world to succeed to paperless registration of all listed bonds in 1983.

Listing and trading: expanding into new asset classes

With the combination of seven exchanges, four CSDs and one clearing house, Euronext now supports the listing and trading of stocks and shares, as well as other financial instruments, and covers the entire capital markets value chain. It is now the leading cash trading venue in Europe and handles 25% of shares traded in the European region. Euronext also operates one of the leading structured products trading venues in Europe, and is the leading exchange globally for listing bonds and investment funds. The company also offers trading in financial and commodity derivatives, including a range of derivatives instruments on Euronext and European underlyings, and index futures and options on our benchmark indices such as the CAC 40® and AEX®. Euronext’s flagship milling wheat contracts and rapeseed commodity contracts continue to be included in recognised commodity benchmarks, such as the S&P World Commodity Index and Rogers International Commodity indices.

 

Did you know? Euronext is the leading equity listing venue in Europe with c.2,000 issuers representing €6.9 trillion of aggregated market capitalisation at end December 2021.

 

Did you know? In 2021, close to €1 in every €4 of equity capital markets funding for European firms was raised on a Euronext market.

A proprietary trading platform: creating a single liquidity pool

At the backbone of our pan-European infrastructure is our state-of-the-art proprietary trading platform, Optiq®, launched in 2017. This single trading platform connects all of our trading venues, providing a Single Order Book and a harmonised regulatory framework[1]. Our Single Order Book enables investors to trade, clear and settle in a uniform way throughout various jurisdictions. And through Optiq, investors have access to the largest financing liquidity pool in Europe and a unique entry point to all Euronext’s securities and products.

Supporting the entire listing and issuing value chain

Another vital aspect of creating a pan-European market infrastructure is supporting companies in listing and issuing equity and debt finance on our markets. Euronext does this by working with them through every phase of their listing journey. For example, in 2017, as part of the Euronext Corporate Services expansion, Euronext acquired Company Webcast and a 60% share in the iBabs board portal platform in 2017, allowing it to offer companies virtual investor services solutions. And in 2018, Euronext’s corporate and investor services offering was strengthened further through the acquisitions of InsiderLog and Commcise.

 

Did you know? Euronext Corporate Services serves over 4,000 clients in 25 countries, spanning listed and private companies, as well as public sector entities.

Offering post-trade and settlement services

In 2020 and 2021, Euronext broadened its post-trade services offering with the acquisition of VP Securities (now Euronext Securities Copenhagen) and Monte Titoli (now Euronext Securities Milan). Together with the previously acquired central securities depositories (CSDs) in Portugal (2002) and Norway (2019), these companies form the foundation for a pan-European CSD network that provides clearing, settlement and custody services to issuers across Europe, as well as ancillary services that facilitate market participants’ operations. With CC&G (now Euronext Clearing), a multi-asset clearing house, Euronext can now offer services covering the complete post-trade value chain and aims to provide a harmonised clearing framework across all of our venues. Our aim is to make Euronext Clearing the CCP of choice for Euronext cash equity and listed derivatives markets, offering our clients harmonised and simplified access.

Empowering sustainable growth

Euronext’s unique federal model places us at the intersection of local economies and global markets, connecting buyers and sellers on our trading venues. In this key role, Euronext has a responsibility to the whole finance community to facilitate the transition to a more sustainable economy in each of the countries where we operate. Early in our history, Euronext lived up to this responsibility by making it easier for investors to locate and invest in projects and companies working to finance the transition to a blue and green economy. For example, in 2008, Euronext was the first exchange to launch a pan-European index focusing on CO2 emissions, the Low Carbon 100. It is the oldest and most successful low-carbon index. Since that time, Euronext has created over 70+ ESG indices, and issued over 900 sustainable bonds and over 400 ESG-related ETFs.

 

Did you know? Euronext issued over €298 billion in ESG bonds in 2021.

Helping ambitious companies raise capital

Europe has emerged as a centre for innovation and has a fast-growing tech sector. This growth has also increased the funding needs of companies looking to scale their business globally. As a part of our mission to facilitate the financing of the real economy, Euronext has supported this fast-growing sector by helping companies meet their funding needs and gain a higher profile among international investors. For example, in 2015 Euronext launched TechShare, a unique pan-European programme for ambitious Tech entrepreneurs on their road to an IPO. TechShare has since grown into an extensive network of Tech companies and financial partners, becoming one of the largest tech financing communities across Europe with a presence in over 10 countries. In 2022, Euronext is also launching Tech Leaders, a segment dedicated to highlighting the visibility and attractiveness of high-growth listed Tech companies among international investors. This segment includes a suite of services to support these companies along their financial journey.

 

Did you know? Euronext is Europe’s leading venue for Technology companies, with over 750 issuers listed on its markets across clean technologies, life sciences, TMT, bio-technologies, medical technologies, and other sectors.

Future prospects: the next chapter of our story

From the trading of the first corporate shares in Amsterdam back in 1607 to providing tomorrow’s sustainable growth products, Euronext has a long history of financing the real economy. Over the past 20 years, Euronext has transformed from an exchange into a market infrastructure covering the full value chain of financial markets, and connecting local markets with global economies. The journey, however, is just beginning. For example, financing the transition to a blue and green economy will require significant investments from public and private institutions. Euronext will continue to drive those investment efforts by offering a full suite of ESG products, including creating climate and ESG versions of its blue-chip indices in all our regulated markets. Euronext is also playing its part in advancing the ESG agenda by moving its core Data Centre to Italy, shifting to a green facility powered 100% by renewable energy sources. This migration sets the standard for the industry and provides Euronext’s clients with concrete tools to improve their own carbon footprint. And Euronext will continue to form the backbone of a Capital Markets Union by furthering harmonisation across markets and borders. It has been an exciting journey, and the Group looks forward to what comes next, as it continues to shape capital markets for future generations.

 

[1] Borsa Italiana cash & derivatives markets will migrate to Optiq in 2023 (targeted date, pending regulatory approval).