Euronext // 2021 Universal Registration Document
Presentation of the Group 1 Company Profile
in Denmark in 2020 and Monte Titoli (Euronext Securities Milan) in Italy in 2021, Euronext has positioned itself as a leading central securities depository (“CSD”) operator in Europe. Euronext has combined its four CSD brands into Euronext Securities, an umbrella brand for its CSD business, while keeping a strong local presence and identity. The Group aims to expand its post-trade services, harmonise processes and enhance the client experience. Through the acquisition of CC&G (Euronext Clearing) in April 2021, Euronext is now the owner of a multi-asset clearing house and is thus in a position to directly manage its clearing activities to complete its value chain. Euronext is determined to directly manage the clearing of its cash and derivatives flows. Euronext will grow CC&G into Euronext Clearing, making it Euronext’s central counterparty (“CCP”) of choice for its cash equity, listed derivatives and commodities markets (2) . Euronext will continue to offer an open access CCP model for cash equity clearing. These successful integrations highlight Euronext’s value proposition to benefit from Euronext’s extended client base and several cross- selling opportunities. Euronext aims to be the trusted choice for its clients providing them with access to European financial markets. It has transformed from an exchange into a market infrastructure, boosting its presence across the full value chain of financial markets, offering best-in- class services to all its clients. BUSINESS ENVIRONMENT As a market infrastructure, Euronext’s operations and performance depend significantly on market and economic conditions in Europe, but also the United States, Asia and the rest of the world. Euronext operates in a business environment that is best described as a complex non-linear system with dependencies on the decisions of policy makers and regulators worldwide, with subsequent developments in the legal, regulatory and tax environment as well as the macroeconomic environment both in Europe and abroad. Competition On the corporate listing side, competition between exchanges for domestic issuers is rare. When a domestic issuer lists on another exchange, it tends to be on a sector specific market rather than on another European stock exchange, in particular for global companies and SMEs in the technology sector. As part of its strategy, Euronext strives to attract issuers from newmarkets: Euronext has an office in a European city outside its core markets – in Madrid (Spain) – to assist Tech companies in developing their business on a greater scale through capital markets. While competition in the cash trading market is relatively mature, in recent years Euronext has faced increased pressure on pricing and market share in equity options trading, in particular from new entrants to the market that have fee structures that are significantly lower than the Company’s fee structure and a reduced cost structure aligned with their narrower service offering. However, Euronext remains the largest liquidity pool in Europe, with market share on its cash equity markets of above 70% (3) . 1.1.3
investors to benefit from being able to trade, clear and settle in a uniform way throughout various jurisdictions while also accessing a broad and deep pool of liquidity. As an operator of regulated capital markets, Euronext brings together buyers and sellers in venues that are transparent, efficient and reliable. The Group combines cash, fixed income securities and derivatives markets in its seven locations together with a global foreign exchange trading venue. Euronext’s broad portfolio of products, services and platforms covers the full capital markets value chain and range of market services, including the provision of market information, the development and operation of information technology systems, investor services and easy access to settlement and clearing facilities. Euronext announced in April 2021 the strategic decision to migrate its Core Data Centre from Basildon, in the United Kingdom, to Bergamo, in Italy. The migration is in response to multiple factors, including the dynamic created by Brexit and a strong rationale to locate the Group’s Core Data Centre in a European Union country where Euronext operates a large business, and an ESG commitment. This transformative move, managed in collaboration with clients, marks a milestone in bringing back to the European continent the data centre that handles 25% (1) of European trading volumes. The date currently targeted for the first part of the Group Core Data Centre migration, subject to regulatory approvals and operational readiness, is set for June 2022. In recent years, Euronext has expanded into fast-growing revenue services and new asset classes. Euronext has built a complete Corporate Services offering through successive bolt-on deals. This offering, also aimed at non-issuers, was designed to meet clients’ needs in critical areas such as regulation, governance, communication, and compliance. Euronext has also entered new asset classes to diversify its business with the acquisition of Euronext FX (formerly FastMatch) in 2017, expanding into the FX market, and in 2020 with the acquisition of Nord Pool, a leading power trading infrastructure in the Nordics, expanding into the power market. These acquisitions enabled Euronext to target a new set of clients around the globe. With the acquisition of the Irish Stock Exchange, now Euronext Dublin, in 2018, Euronext became the global leader in the listing of debt and funds securities. Since April 2021, Euronext is the majority owner of MTS S.p.A., the leading fixed income trading platform in Europe, number one for Dealer-to-Dealer (D2D) European Government bonds trading, number one in Italian repo trading and number three in Europe in Dealer-to-Client (D2C) European Government bonds trading. Euronext will strengthen its leading position in D2D, through an extended geographical reach and an expanded offering with new services. Its buy-side reach will be expanded through MTS Bondvision together with the deployment of an added-value data offering. MTSwill expand across the full value chain, by exploring opportunities to deploy new and existing solutions to meet the needs of its clients. With Interbolsa in Portugal (now Euronext Securities Porto), and the acquisition of VPS (Euronext Securities Oslo) as part of Oslo Børs VPS in Norway in 2019, VP Securities (Euronext Securities Copenhagen)
(1) In 2021. (2) Subject to regulatory approvals. (3) Reported market share for 8 months of consolidation of Borsa Italiana trading volumes.
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2021 UNIVERSAL REGISTRATION DOCUMENT
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