Euronext - 2020 Universal Registration Document

Risk Management & Control Structure

Risk Factors

STRATEGIC RISKS

STRATEGIC TRANSFORMATION RISK

Risk Identification and Description

Potential Impact on the Group

The Group’s strategy includes the identification and implementation of organic initiatives and new business initiatives such as acquisitions and partnerships. The size, number and complexity of recent acquisitions and those that may be executed in the near future, as well as ongoing enhancement programs have increased the strategic transformation risk of the Group. Strategic transformation risk is the risk of or loss resulting fromunderperforming or failed transformations or integrations. The market for acquisition targets and strategic alliances is highly competitive. The Group has acted on opportunities as they arise and may continue to enter into simultaneous business combination transactions. Euronext is undergoing companywide business transformation programs, such as the ongoing integration of recent acquisitions, including VP Securities and subject to closing, the integration of Borsa Italiana Group.

Pursuing strategic transactions requires substantial time and attention of the management team, and of key employeesworking on the integrations or projects. This could prevent oversight of other initiatives, reduce bandwidth for business as usual activities and slow other ongoing projects or initiatives. Late, incomplete or unsuccessful integrations or projects may impact the Group’s strategic plan, business, reputation and financial results. The ability to adapt to a rapidly changing Company culture by Euronext’s employees is necessary to ensure successful integrations and transformation. Failure to meet the demands of the changing Company culture could negatively impact the advancement of projects and successful integration. New acquisitions may require changes to the Euronext business model and be very complex depending on the size and diversity of activities. If integration programs are not completed, do not operate as intended, or identified synergies are not delivered, Euronext’s strategic ambition may be at risk. Due to the rapid pace of technology evolution, Euronext’s technology change capability and inherent capacity to meet market demands is vital for Euronext’s attractiveness. Euronext invests time in developing new products, improving current product offerings to clients and increasing its presence in other markets. If these product offerings are not successful, a potential market opportunitymay be missed and Euronext may not be able to offset the cost of such initiatives, which may have a material impact on the Company’s financial results. Decisions by Euronext’s regulators to impose measures may impact the competitive situation and possible strategy of the Group. Adherence to new and evolving regulatory regimes implies increase compliance and associated costs of the Group, for instance by requiring the businesses of the Group to devote substantial time and cost to the implementation of new rules and related changes in their operations as well as impact the ability to outsource certain activities; place financial and Corporate Governance restrictions on the Group and its group entities. As the Group grows its product base and jurisdictions in which it operates, regulatory oversight of the Group’s activities by additional regulatory bodies potentially increases regulatory constraints or increases compliance requirements. The changes may affect Euronext’s activity and/or revenue if designed adversely, or could materially increase the costs of, and restrictions associated with, its activities. Any delay or denials by regulatory authorities of approval requested by Euronext required to implement its strategic initiatives, or to pursue business opportunities could have a significant impact on Euronext’s competitive positioning and growth. The debate and changes to the structure of the market data business including both RCB provisions and the creation of a consolidated tape may negatively impact market data business revenues.With respect to Open Access, it will allow a venue competing products, which may negatively impact group revenue. European Commission has published a digital finance package with a set of proposals that would create a bespoke regime for crypto-tokens that are not considered as financial instruments, create a pilot regime for market infrastructures that use distributed ledger technology, and amend existing legislation to frame crypto-tokens that act as financial instruments to be defined as such. It is difficult to determine the future potential impacts of Brexit due to its recent implementation, regulatory changes that may interrupt trading flows as they currently exist may have a material adverse impact on the Company. Potential Impact on the Group

2

REGULATORY EVOLUTION AND ENHANCED REGULATORY SCRUTINY RISK

Risk Identification and Description

Euronext’s business is subject to extensive regulation at both European and national levels in the jurisdictions in which the Group has operations: Belgium, Denmark, France, Ireland, the Netherlands, Norway, Portugal and the United Kingdom. In addition, the Company has a presence in the United States and Singapore. Regulatory changesmay impact the operating environment of Euronext exposing the Group to risks associated with the management of implementing and maintaining new regulatory requirements. The Group needs to obtain regulatory approval to implement significant changes to operations of the regulated markets, failure to obtain the required approvals may prevent the Group from achieving its strategic objectives. As the Group expands, its regulatory network expands with it which may introduce new requirements and add complexity to relationships with its existing regulators as well as limit the ability of the Group and its group entities to provide certain of their current or planned services, or to build an efficient, competitive organisation. With regards to MIFID II regulation, there is a potential risk to market data business revenues that is linked to potential changes to the reasonable commercial basis provisions as well as introduction of a consolidated tape. In addition, there is a potential risk that Open Access will be implemented for ETDs in July 2021. Beyond the functioning of Euronext’s core business, it faces additional regulatory complexity that extends to emerging areas of regulatory focus topics. The Group expects to face increased regulatory security around IT and cybersecurity, cloud outsourcing and Fintech coming from legislative proposals from European governing bodies including the European Commission and ESMA. If emerging technology and Fintech competitors are able to obtain regulatory approval for similar products or services faster than established companies such as Euronext, or with lower regulatory burdens than regulated entities, the Group’s competitive position could be weakened. Continued uncertainty regarding Brexit is the result of agreements between the United Kingdomand the European Union, as negotiations between the two parties continue to evolve including discussions around financial services. Uncertainty and political instability may have an adverse effect on the business activity of the Group.

49

2020 UNIVERSAL REGISTRATION DOCUMENT