Euronext
Encyclopedia
Euronext N.V.
is a pan-Europe
an stock exchange
based in Amsterdam
and with subsidiaries in Belgium
, France
, Netherlands
, Portugal
and the United Kingdom
. In addition to equities and derivative
s markets, the Euronext group provides clearing and information services. As of Dec 2010, markets run by Euronext had a market capitalisation of US$2.93 trillion, making it the 5th largest exchange in the world. Euronext merged with NYSE Group
on April 4, 2007 to form NYSE Euronext, the "first global stock exchange". Both companies have approved the rumors that Deutsche Börse AG is acquiring NYSE Euronext with an expectation of 300 million Euro synergy savings from personnel salaries and infrastructure management costs.
, Brussels Stock Exchange
, and Paris Bourse
, in order to take advantage of the harmonization of the European Union
financial market
s. In December 2001, Euronext acquired the shares of the London International Financial Futures and Options Exchange
(LIFFE), which continues to operate under its own governance. Beginning in early 2003, all derivatives products traded on its affiliated exchanges trade on LIFFECONNECT, LIFFE's electronic trading platform. In 2002 the group merged with the Portuguese stock exchange Bolsa de Valores de Lisboa e Porto (BVLP), renamed Euronext Lisbon
. Hours of operation on non-holidays are 9:00-17:30 CET.
for their cash and derivatives products, and with the Helsinki Exchanges on cash trading; ownership agreements are currently excluded. The Euronext List encompasses all quoted companies. It has two segments; NextEconomy, consisting of companies whose equities are traded continuously and are active in sectors such as information technology and biotechnology, and NextPrime, consisting of companies in more traditional sectors that are traded continuously. Inclusion in the segments is voluntary.
Euronext manages two broad-based indices. The Euronext 100
Index is the blue chip index
. The Next 150 Index is a market capitalisation index of the 150 next largest stocks, representing the large- to mid-capitalisation segment of listed stocks at Euronext. The NextEconomy and NextPrime segments each have a price index and a total return index
, weighted by market capitalisation and excluding the shares listed in the Euronext 100 Index. The indices have a base date of 31 December 2001, with a starting level of 1000 points. Six NextWeather weather indices for France, launched in January 2002, are among the sector indices planned by Euronext. Exchange traded funds, called trackers, comprise Euronext's NextTrack product segment, and have been introduced on the AEX index
, CAC 40
, Euro Stoxx 50, and various pan-European regional and sector indices. Euronext has introduced several commodity futures contracts, available to all constituents. Winefex Bordeaux futures are traded on Euronext Paris
. Euronext.liffe is the subsidiary of Euronext responsible for all option
s and futures contract
s trading, formed by the merger of the derivatives activities of the various constituents of Euronext with LIFFE.
by Euronext. The derivatives activities of the other constituent exchanges of Euronext (Amsterdam, Brussels, Lisbon and Paris), were merged into Euronext.liffe. Trading is done electronically through the LIFFE CONNECT platform. Euronext.liffe offers a wide range of futures and option products on short-term interest rates, bonds, swaps, equities and commodities.
In addition to this, it sells its technology to third parties. Since April 2003, the Tokyo International Financial Futures Exchange has run on LIFFE CONNECT. Furthermore, from January 2004 until its merger with the Chicago Mercantile Exchange
in 2008, the Chicago Board of Trade
provided electronic trading via e-cbot, which was powered by LIFFE CONNECT. As a result, the Kansas City Board of Trade
and the Minneapolis Grain Exchange
used LIFFE CONNECT for their overnight trading.
was formed in 2005 by Euronext to help small and mid-class companies in the Eurozone seek financing. Since the merger of Euronext and NYSE since 2006, now completed in 2007, this market is now a division of NYSE Euronext, named NYSE Alternext.
to acquire the London Stock Exchange
, NYSE Group, owner of the New York Stock Exchange
, offered €8 billion (US$10.2b) in cash and shares for Euronext on 22 May 2006, outbidding a rival offer for the European Stock exchange operator from Deutsche Börse
, the German stock market. Contrary to statements that it would not raise its bid, on 23 May 2006, Deutsche Börse unveiled a merger bid for Euronext, valuing the pan-European exchange at €8.6 billion (US$11b), €600 million over NYSE Group's initial bid. Despite this, NYSE Group and Euronext penned a merger agreement, subject to shareholder vote and regulatory approval. The initial regulatory response by SEC chief Christopher Cox (who was coordinating heavily with European counterparts) was positive, with an expected approval by the end of 2007. The new firm, tentatively dubbed NYSE Euronext, would be headquartered in New York City
, with European operations and its trading platform run out of Paris. Then-NYSE CEO
John Thain
, who was to head NYSE Euronext, intended to use the combination to form the world's first global stock market, with continuous trading of stocks and derivatives over a 21-hour time span. In addition, the two exchanges hoped to add Borsa Italiana
(the Milan stock exchange) into the grouping.
Deutsche Börse dropped out of the bidding for Euronext on 15 November 2006, removing the last major hurdle for the NYSE Euronext transaction. A run-up of NYSE Group's stock price in late 2006 made the offering far more attractive to Euronext's shareholders. On 19 December 2006, Euronext shareholders approved the transaction with 98.2% of the vote. Only 1.8% voted in favour of the Deutsche Börse offer. Jean-François Théodore, the Chief Executive Officer
of Euronext, stated that they expected the transaction to close within three or four months. Some of the regulatory agencies with jurisdiction over the merger had already given approval. NYSE Group shareholders gave their approval on 20 December 2006. The merger was completed on 4 April 2007, forming NYSE Euronext.
A deal was reportedly not struck due to valuation differences. However, such a merger would create the largest exchange in history.
Naamloze Vennootschap
is the Dutch term for a public limited liability company. The company is owned by shareholders, and the company's shares are not registered to certain owners, so that they may be traded on the public stock market....
is a pan-Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
an stock exchange
Stock exchange
A stock exchange is an entity that provides services for stock brokers and traders to trade stocks, bonds, and other securities. Stock exchanges also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and...
based in Amsterdam
Amsterdam
Amsterdam is the largest city and the capital of the Netherlands. The current position of Amsterdam as capital city of the Kingdom of the Netherlands is governed by the constitution of August 24, 1815 and its successors. Amsterdam has a population of 783,364 within city limits, an urban population...
and with subsidiaries in Belgium
Belgium
Belgium , officially the Kingdom of Belgium, is a federal state in Western Europe. It is a founding member of the European Union and hosts the EU's headquarters, and those of several other major international organisations such as NATO.Belgium is also a member of, or affiliated to, many...
, France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
, Netherlands
Netherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...
, Portugal
Portugal
Portugal , officially the Portuguese Republic is a country situated in southwestern Europe on the Iberian Peninsula. Portugal is the westernmost country of Europe, and is bordered by the Atlantic Ocean to the West and South and by Spain to the North and East. The Atlantic archipelagos of the...
and the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
. In addition to equities and derivative
Derivative (finance)
A derivative instrument is a contract between two parties that specifies conditions—in particular, dates and the resulting values of the underlying variables—under which payments, or payoffs, are to be made between the parties.Under U.S...
s markets, the Euronext group provides clearing and information services. As of Dec 2010, markets run by Euronext had a market capitalisation of US$2.93 trillion, making it the 5th largest exchange in the world. Euronext merged with NYSE Group
NYSE Group
NYSE Euronext, Inc. is a Euro-American for-profit corporation that operates multiple securities exchanges, most notably New York Stock Exchange , Euronext and NYSE Arca ....
on April 4, 2007 to form NYSE Euronext, the "first global stock exchange". Both companies have approved the rumors that Deutsche Börse AG is acquiring NYSE Euronext with an expectation of 300 million Euro synergy savings from personnel salaries and infrastructure management costs.
Background
Euronext was formed on 22 September 2000 following a merger of the Amsterdam Stock ExchangeAmsterdam Stock Exchange
The Amsterdam Stock Exchange is the former name for the stock exchange based in Amsterdam. It merged on 22 September 2000 with the Brussels Stock Exchange and the Paris Stock Exchange to form Euronext, and is now known as Euronext Amsterdam.-History:...
, Brussels Stock Exchange
Brussels Stock Exchange
The Brussels Stock Exchange was founded in Brussels, Belgium, by Napoleonic decree in 1801. On September 22, 2000, the BSE merged with Paris Bourse, Lisbon Stock Exchange and the stock exchanges of Amsterdam, to form Euronext N.V., the first pan-European exchange for equities and derivatives,...
, and Paris Bourse
Paris Bourse
The Paris Bourse is the historical Paris stock exchange, known as Euronext Paris from 2000 onwards.-History and functioning:...
, in order to take advantage of the harmonization of the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
financial market
Financial market
In economics, a financial market is a mechanism that allows people and entities to buy and sell financial securities , commodities , and other fungible items of value at low transaction costs and at prices that reflect supply and demand.Both general markets and...
s. In December 2001, Euronext acquired the shares of the London International Financial Futures and Options Exchange
London International Financial Futures and Options Exchange
The London International Financial Futures and Options Exchange is a futures exchange based in London. LIFFE is now part of NYSE Euronext following its takeover by Euronext in January 2002 and Euronext's merger with New York Stock Exchange in April 2007.-History:The London International Financial...
(LIFFE), which continues to operate under its own governance. Beginning in early 2003, all derivatives products traded on its affiliated exchanges trade on LIFFECONNECT, LIFFE's electronic trading platform. In 2002 the group merged with the Portuguese stock exchange Bolsa de Valores de Lisboa e Porto (BVLP), renamed Euronext Lisbon
Euronext Lisbon
Euronext Lisbon is a stock exchange in Lisbon, Portugal. It belongs to the NYSE Euronext group, the first global stock exchange.Euronext Lisbon trades equities, public and private bonds, participation bonds, warrants, corporate warrants, investment trust units, and exchange traded funds...
. Hours of operation on non-holidays are 9:00-17:30 CET.
Structure and Indices
Euronext has cross-membership and cross-access agreements with the Warsaw Stock ExchangeWarsaw Stock Exchange
The Warsaw Stock Exchange , , is a stock exchange located in Warsaw, Poland. It has a capitalization of € 220 bln .The WSE is a member of the World Federation of Exchanges and the Federation of European Securities Exchanges.-History:...
for their cash and derivatives products, and with the Helsinki Exchanges on cash trading; ownership agreements are currently excluded. The Euronext List encompasses all quoted companies. It has two segments; NextEconomy, consisting of companies whose equities are traded continuously and are active in sectors such as information technology and biotechnology, and NextPrime, consisting of companies in more traditional sectors that are traded continuously. Inclusion in the segments is voluntary.
Euronext manages two broad-based indices. The Euronext 100
Euronext 100
The Euronext 100 Index is the blue chip index of the pan-European exchange, Euronext NV.It comprises the largest and most liquid stocks traded on Euronext. Each stock must trade more than 20 percent of its issued shares over the course of the rolling one year analysis period. The index is reviewed...
Index is the blue chip index
Index (economics)
In economics and finance, an index is a statistical measure of changes in a representative group of individual data points. These data may be derived from any number of sources, including company performance, prices, productivity, and employment. Economic indices track economic health from...
. The Next 150 Index is a market capitalisation index of the 150 next largest stocks, representing the large- to mid-capitalisation segment of listed stocks at Euronext. The NextEconomy and NextPrime segments each have a price index and a total return index
Total return index
A total return index is an index that measures the performance of a group of components by assuming that all cash distributions are reinvested, in addition to tracking the components' price movements. While it is common to refer to equity based indices, there are also total return indices for bonds...
, weighted by market capitalisation and excluding the shares listed in the Euronext 100 Index. The indices have a base date of 31 December 2001, with a starting level of 1000 points. Six NextWeather weather indices for France, launched in January 2002, are among the sector indices planned by Euronext. Exchange traded funds, called trackers, comprise Euronext's NextTrack product segment, and have been introduced on the AEX index
AEX index
The AEX index, derived from Amsterdam Exchange index, is a stock market index composed of Dutch companies that trade on Euronext Amsterdam, formerly known as the Amsterdam Stock Exchange. Started in 1983, the index is composed of a maximum of 25 of the most actively traded securities on the exchange...
, CAC 40
CAC 40
The CAC 40 is a benchmark French stock market index. The index represents a capitalization-weighted measure of the 40 most significant values among the 100 highest market caps on the Paris Bourse...
, Euro Stoxx 50, and various pan-European regional and sector indices. Euronext has introduced several commodity futures contracts, available to all constituents. Winefex Bordeaux futures are traded on Euronext Paris
Euronext Paris
Euronext Paris is France's securities market, formerly known as the Paris Bourse, which merged with the Amsterdam, Lisbon and Brussels exchanges in September 2000 to form Euronext NV, which is the second largest exchange in Europe behind the UK's London Stock Exchange...
. Euronext.liffe is the subsidiary of Euronext responsible for all option
Option (finance)
In finance, an option is a derivative financial instrument that specifies a contract between two parties for a future transaction on an asset at a reference price. The buyer of the option gains the right, but not the obligation, to engage in that transaction, while the seller incurs the...
s and futures contract
Futures contract
In finance, a futures contract is a standardized contract between two parties to exchange a specified asset of standardized quantity and quality for a price agreed today with delivery occurring at a specified future date, the delivery date. The contracts are traded on a futures exchange...
s trading, formed by the merger of the derivatives activities of the various constituents of Euronext with LIFFE.
Euronext.liffe
Euronext.liffe was formed in January 2002 from the takeover of the London International Financial Futures and Options ExchangeLondon International Financial Futures and Options Exchange
The London International Financial Futures and Options Exchange is a futures exchange based in London. LIFFE is now part of NYSE Euronext following its takeover by Euronext in January 2002 and Euronext's merger with New York Stock Exchange in April 2007.-History:The London International Financial...
by Euronext. The derivatives activities of the other constituent exchanges of Euronext (Amsterdam, Brussels, Lisbon and Paris), were merged into Euronext.liffe. Trading is done electronically through the LIFFE CONNECT platform. Euronext.liffe offers a wide range of futures and option products on short-term interest rates, bonds, swaps, equities and commodities.
In addition to this, it sells its technology to third parties. Since April 2003, the Tokyo International Financial Futures Exchange has run on LIFFE CONNECT. Furthermore, from January 2004 until its merger with the Chicago Mercantile Exchange
Chicago Mercantile Exchange
The Chicago Mercantile Exchange is an American financial and commodity derivative exchange based in Chicago. The CME was founded in 1898 as the Chicago Butter and Egg Board. Originally, the exchange was a non-profit organization...
in 2008, the Chicago Board of Trade
Chicago Board of Trade
The Chicago Board of Trade , established in 1848, is the world's oldest futures and options exchange. More than 50 different options and futures contracts are traded by over 3,600 CBOT members through open outcry and eTrading. Volumes at the exchange in 2003 were a record breaking 454 million...
provided electronic trading via e-cbot, which was powered by LIFFE CONNECT. As a result, the Kansas City Board of Trade
Kansas City Board of Trade
The Kansas City Board of Trade , is an American commodity futures and options exchange regulated by the Commodity Futures Trading Commission...
and the Minneapolis Grain Exchange
Minneapolis Grain Exchange
The Minneapolis Grain Exchange was formed in 1881 as a regional cash marketplace to promote fair trade and to prevent trade abuses in wheat, oats and corn....
used LIFFE CONNECT for their overnight trading.
Alternext
AlternextAlternext
NYSE Alternext is an equity trading market that was opened May 17, 2005 by its parent institution Euronext to address an opportunity posed by small to medium sized firms that were anticipated to desire easier access to an equity market....
was formed in 2005 by Euronext to help small and mid-class companies in the Eurozone seek financing. Since the merger of Euronext and NYSE since 2006, now completed in 2007, this market is now a division of NYSE Euronext, named NYSE Alternext.
Merger with NYSE
Due to apparent moves by NASDAQNASDAQ
The NASDAQ Stock Market, also known as the NASDAQ, is an American stock exchange. "NASDAQ" originally stood for "National Association of Securities Dealers Automated Quotations". It is the second-largest stock exchange by market capitalization in the world, after the New York Stock Exchange. As of...
to acquire the London Stock Exchange
London Stock Exchange
The London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...
, NYSE Group, owner of the New York Stock Exchange
New York Stock Exchange
The New York Stock Exchange is a stock exchange located at 11 Wall Street in Lower Manhattan, New York City, USA. It is by far the world's largest stock exchange by market capitalization of its listed companies at 13.39 trillion as of Dec 2010...
, offered €8 billion (US$10.2b) in cash and shares for Euronext on 22 May 2006, outbidding a rival offer for the European Stock exchange operator from Deutsche Börse
Deutsche Börse
Deutsche Börse AG is a marketplace organizer for the trading of shares and other securities. It also is a transaction services provider. It gives companies and investors access to global capital markets. It is a joint stock company and was founded in 1993. The headquarters are in Frankfurt,...
, the German stock market. Contrary to statements that it would not raise its bid, on 23 May 2006, Deutsche Börse unveiled a merger bid for Euronext, valuing the pan-European exchange at €8.6 billion (US$11b), €600 million over NYSE Group's initial bid. Despite this, NYSE Group and Euronext penned a merger agreement, subject to shareholder vote and regulatory approval. The initial regulatory response by SEC chief Christopher Cox (who was coordinating heavily with European counterparts) was positive, with an expected approval by the end of 2007. The new firm, tentatively dubbed NYSE Euronext, would be headquartered in New York City
New York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
, with European operations and its trading platform run out of Paris. Then-NYSE CEO
Chief executive officer
A chief executive officer , managing director , Executive Director for non-profit organizations, or chief executive is the highest-ranking corporate officer or administrator in charge of total management of an organization...
John Thain
John Thain
John Alexander Thain is an American businessman, investment banker, and currently chairman and CEO of the CIT Group.Thain was the last chairman and chief executive officer of Merrill Lynch before its merger with Bank of America...
, who was to head NYSE Euronext, intended to use the combination to form the world's first global stock market, with continuous trading of stocks and derivatives over a 21-hour time span. In addition, the two exchanges hoped to add Borsa Italiana
Borsa Italiana
The Borsa Italiana S.p.A., based in Milan, is Italy's main stock exchange. It was privatised in 1997 and is a part of the London Stock Exchange Group plc since 2007. In 2005, the companies listed on the Borsa were worth US$890 billion...
(the Milan stock exchange) into the grouping.
Deutsche Börse dropped out of the bidding for Euronext on 15 November 2006, removing the last major hurdle for the NYSE Euronext transaction. A run-up of NYSE Group's stock price in late 2006 made the offering far more attractive to Euronext's shareholders. On 19 December 2006, Euronext shareholders approved the transaction with 98.2% of the vote. Only 1.8% voted in favour of the Deutsche Börse offer. Jean-François Théodore, the Chief Executive Officer
Chief executive officer
A chief executive officer , managing director , Executive Director for non-profit organizations, or chief executive is the highest-ranking corporate officer or administrator in charge of total management of an organization...
of Euronext, stated that they expected the transaction to close within three or four months. Some of the regulatory agencies with jurisdiction over the merger had already given approval. NYSE Group shareholders gave their approval on 20 December 2006. The merger was completed on 4 April 2007, forming NYSE Euronext.
Attempted Merger with Deutsche Börse
On November 25, 2008, Deutsche Börse and NYSE Euronext began merger talks which involved creating a holding company to buyout Deutsche Börse shareholders, then use Euronext to merge into the new corporation.A deal was reportedly not struck due to valuation differences. However, such a merger would create the largest exchange in history.
See also
- Chi-XChi-XChi-X Europe is a London-based, order-driven pan-European equity exchange, or Multilateral Trading Facility . It is an alternative exchange and trades equities that are listed on primary exchanges such as the London Stock Exchange, Frankfurt Stock Exchange, Euronext and OMX...
- Euronext Amsterdam
- Euronext Brussels
- Euronext LisbonEuronext LisbonEuronext Lisbon is a stock exchange in Lisbon, Portugal. It belongs to the NYSE Euronext group, the first global stock exchange.Euronext Lisbon trades equities, public and private bonds, participation bonds, warrants, corporate warrants, investment trust units, and exchange traded funds...
- Euronext ParisEuronext ParisEuronext Paris is France's securities market, formerly known as the Paris Bourse, which merged with the Amsterdam, Lisbon and Brussels exchanges in September 2000 to form Euronext NV, which is the second largest exchange in Europe behind the UK's London Stock Exchange...
- List of European stock exchanges
- List of stock exchanges
- OMF