Euronext - 2020 Universal Registration Document

Risk Management & Control Structure 2 Mitigation Measures

FINANCIAL RISKS

MARKET RISK

Risk Identification and Description

Potential Impact on the Group

Market risk arises from changes in interest rates, foreign-exchange risk and other market prices. The Group is exposed to interest rate risk on both fixed-rate bond and floating rate financial assets and liabilities, including the fixed-rate bonds and the Revolving Credit Facility. The Group is exposed to foreign currency risk arising from the translation of assets and liabilities of subsidiaries with functional currencies other than the Euro. The Group is exposed to foreign exchange risk primarily in NOK, USD, DKK and GBP. Fluctuations may affect the Group’s profit margins and value of assets and liabilities in non-euro denominated currencies when translated into Euros.

Unfavourable movements in interest rates could negatively impact the net financial income of the Group by increasing the cost of borrowing, refinancing, or reducing interest income. Fluctuations in non-Euro currencies particularly with respect to the NOK, USD and GBP may impact the income generated and the (regulatory) equity in these currencies when translated in EUR in the Consolidated Financial Statements. Although the Group seeks to limit its exposure tomarket risks, it cannot eliminate them. As such, adverse changes in market conditions, on both interest rate and foreign currency fluctuations may negatively impact the net financial income of the Group.

LIQUIDITY RISK

Risk Identification and Description

Potential Impact on the Group

The Group would be exposed to a liquidity risk if its short-term liabilities become higher than its cash, cash equivalents, short-term financial investments and available bank facilities and in the case where the Group is not able to refinance this liquidity deficit, for example, through new banking lines.

In the event that the Group fails to maintain a level of liquidity sufficient to cover its short term obligations, it will increase its default risk and potentially damage its creditworthiness and subsequently its reputation.

CREDIT RISK

Risk Identification and Description

Potential Impact on the Group

The Group’s business model and business relationships mean that credit risk is concentrated in the financial services sector. The Group’s exposure to credit risk arises from its operating activities (primarily trade receivables), its financing activities, including the investment of cash equivalents, short-term financial investments and derivatives contracts used for hedging purposes in the event of a counterparty’s default.

The Group would incur a loss that would impact its net income should one the counterparties to which it is exposed defaults. Adverse changes in economic environment may increase loss allowance provision which would negatively impact the net income of the Group.

2.2 Mitigation Measures

authorities: widespread remote working for staff (including ensuring all staff provided with required material), reinforced cleaning measures for those in Euronext offices, additional barriers, face masks and hand sanitizer for all employees, etc . Reinforced communication frommanagement and mental health resources for employees has been made available, as well as local level initiatives such as online sports classes. Governance was invoked in order to understand and manager the evolving situation. The Supervisory Board and Managing Board kept informed of the situation, including the measures taken to ensure staff safety and the continued functioning of markets. In order to maintain a fair and orderly market as well as the general IT integrity of Euronext, additional cyber security measures were taken to ensure and maintain the resilience of Euronext’s trading platform and surrounding IT infrastructure enhancing the control

The measures described in this section are presented to provide additional information on the Group’s efforts to seek to manage the likelihood, frequency, or impact of certain risks. Despite the measures noted, the Group’s efforts may not be successful in limiting or preventing these risks from materializing or may not achieve the intended benefits, therefore risks in Section 2.1 - Risk Factors remain material risks for the Group. Refer to Section 2.1 - Risk Factors for a discussion of the Risk Factors that may negatively impact the Group. COVID-19 Euronext’s priority is to protect the health and safety of employees, while maintaining a fair and orderly markets including settlement. The Group rigorously applies the recommendations of local

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2020 UNIVERSAL REGISTRATION DOCUMENT