Euronext - 2020 Universal Registration Document

Risk Management & Control Structure 2 Risk Factors

CHANGE AND INTEGRATION MANAGEMENT RISK

Risk Identification and Description

Potential Impact on the Group

The Group’s change agenda is ambitious. It is driven by internally determined programs, including technology transformation aimed at delivering efficiencies and higher performance. External drivers of change and integration include the changing business and regulatory landscape as well as the Group’s inorganic growth strategy. The Company has actively arbitrated in favor of transformation and steady growth and as a result has taken on operational debt that is being continuously addressed. The volume of incoming flow of acquisitions and integration, project developments, and regulatory obligations challenge available resources, thus the level of operational debt may not decrease as quickly as expected leading to additional risk.

The large volume of significant internal programs and recent acquisitions such as the acquisition of VP Securities and potentially of Borsa Italiana Group in progress simultaneously, with related impacts on the Group, that, if not delivered or delivered as originally designed or with delays, may have an adverse impact on the business, culture, reputation and financial condition of the Company, including an increased cost base without a proportionate increase in revenues. Given the significance of potential future integrations when compared with past programs, as well as the continuing need for effective change and integration management, delays in one project may extend beyond the project in question and have a negative cascading effect. Considering the ambition and scale of concurrent initiatives, the Company cannot assure that all internal programs will be delivered as designed or without delays, whichmay have a negative effect on its business, financial results and reputation.

CLEARING AND SETTLEMENT RISK

Risk Identification and Description

Potential Impact on the Group

The Group relies on key external parties for post-trade services including clearing and settlement and other services. In particular, Euronext relies under its clearing service agreements with LCHS.A., the Paris based clearing house of LCH group Ltd, which is majority owned by LSEG. Euronext relies on LCH SA to provide Central Counter Party (CCP) services for trades executed on the Company’s cash and derivatives markets and to manage related CCP functions, such as risk, novation and multilateral netting. In addition, Euronext relies on EuroCCP to provide CCP services for trades executed on the Company’s cash markets and to manage related CCP functions for Euronext Dublin and as an alternative CCP for the other cash markets under the User Choice Model. For the Oslo cash markets, Euronext Oslo relies on three interoperable CCPs: LCH Ltd, EuroCCP & Six X Clear, while the Oslo derivatives markets, Euronext Oslo also relies on LCH SA from December 2020. The Group also relies on the services of Euroclear group (“Euroclear”) for the settlement of cash market trades other than in Portugal and Norway.

To the extent that any of the external clearing, settlement and custodial entities on which Euronext relies for clearing or settlement services experiences difficulties, materially change its business relationship with the Group, or is unable for any reason to perform its obligations, Euronext may suffer negative impacts on its operations, business, reputation, and financial results.

EMPLOYEES RISK

Risk Identification and Description

Potential Impact on the Group

Euronext success depends upon the experience and industry knowledge of its senior management and other key employees to operate the business and execute business plans, particularly in the area of information technology. Euronext recognises there is a shortage in the employment market for specialists in a number of fields, such as the fields of information technology and market operations as well as other particular product niches. In these areas, the Company competes for staff with a large number of other enterprises. The ability to attract and retain key personnel is dependent on many factors including market conditions, compensation and retention arrangements and Group evolution.

The Company’s success depends in part upon its ability to continue to attract, develop and retain key staff members in a number of business areas. A loss of, or an inability to attract skilled senior management and other key staff could have a material adverse effect on the business, impacting the delivery of projects, results of operations, financial condition and cash flows.

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2020 UNIVERSAL REGISTRATION DOCUMENT