Euronext - 2020 Universal Registration Document

Operating and Financial Review 7 Overview

and partnerships stakes. The fees are recognized to the applicable period of the products. Additional revenue comes from the provision by Nord Pool of data services

A major part of these Corporate Services products are Software-as- a-Services (SaaS) solutions generating recurring revenues through annual subscriptions. In addition, Euronext Corporate Services also generate revenues on renewable advisory mandates or on one-off missions and events. Cash, Derivatives and spot FX Trading Revenues from Euronext cash trading and derivatives trading businesses consist of transaction-based fees for executing trades on Euronext cash markets and derivatives markets. These transaction fees are charged per executed order and based on value traded in cash equities and are charged per lot in derivatives. Trading volume in equity products is primarily driven by price volatility in equity markets and indices. The level of trading activity for all products is also influenced by market conditions and other factors. Derivatives trading revenues received from transactions conducted on Euronext markets are variable, based on the volume and value of traded contracts, and recognised when executed. The principal types of derivative contracts traded are equity and index products and commodities products. FX non-deliverables forwards (NDFs) were also introduced in 2020 on the Euronext Markets Singapore RMO. Spot FX trading revenues primarily consist of transaction-based fees for executing trades. These transaction fees are charged per executed order and based on value traded. Power Trading Revenues from power trading consist of a fixed annual membership fee for customers to be able to participate in the Nord Pool day-ahead and intraday markets, plus variable trading and settlement fees. Variable trading and settlement fees are charged based on volume traded on Nord Pool markets. Trading volumes in the power markets are mainly driven by the maturity of the market, market conditions (power demand/supply) and other factors. Variable fees also include “gross trading” consisting in integrated producers submitting both production and consumption, which carries a reduced fee. Investor Services Investor services primarily encompass the activity of Commcise, that offers cloud-based research commission management, evaluation and accounting solutions and whose revenue model is based on recurring software licence fees. Advanced Data Services The Group charges data vendors and end users, taking data via a direct feed, on a per-user basis for the access to its real-time data and Enterprise licenses are charged for non-display use, including advanced analytic products, and access to historic and reference data products. The Group also collects periodic license fees from vendors for the right to distribute the Group data to third parties. These fees are recognised on a monthly basis as services are rendered. The Group charges an index licence fee to trading desks, investment banks and asset managers for the creations of Structured Products (SP), Exchange Traded Products (ETPs) and exchange traded funds (ETFs) on Euronext owned (trademark) indices. The Group also collects fees for third party index calculations, iNAV calculation

Post-Trade

Custody and Settlement Euronext operates three national CSDs.

The Group operates Interbolsa, the Portuguese national CSD, and receives fees mainly with respect to the settlement instructions and the custody of securities registered/deposited in the centralised securities systems, namely listed and non-listed securities in Portugal. The Group also operates VPS, the Norwegian national CSD and primarily receives fees with respect to the settlement instructions and the custody of securities registered/deposited in the centralised securities systems, namely listed and non-listed securities in Norway, as well as from ancillary services. Lastly, the Group operates VP Securities, the Danish national CSD and primarily receives fees with respect to the settlement instructions and the custody of securities registered/deposited in the centralised securities systems, namely listed and non-listed securities in Denmark, as well as from ancillary services. Clearing Euronext also receives a share of clearing income based on treasury services resulting from placement of collateral and the number of cleared derivatives trades cleared through LCH SA, in exchange for which Euronext pays LCH SA a fixed fee plus a variable fee based on derivatives trading volume. Euronext Technology Solutions Euronext Technologies & other revenue includes license fees and professional services fees for software deployment, for managed IT services provided to third-party market operators (Software as a Service), for connection and data centre colocation services provided to market participant and Regulatory services provided to Investment firms under Euronext’s license as an Authorised Publication Authority (APA) and Authorised Reporting Mechanism (ARM). Fees are charged on a monthly basis to Investment firm’s according to the number of reports submitted to the service. Fees for software customisation and deployment services are recognised either on a time and materials basis or under the percentage completion method, depending upon the nature of the contract with the client. Percentage of completion is calculated based on the number of man days incurred to date as a percentage of the total estimated number of man days to complete the work. License fees, maintenance fees and contract for Optiq® as a Service, setup fees and annual support fees are recognised pro rate over the life of the service contract. Connection and colocation service fees are recognised pro rata over the life of the client commitment. Euronext Technology Solutions & Other

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2020 UNIVERSAL REGISTRATION DOCUMENT