Euronext // 2021 Universal Registration Document

Operating and Financial Review

Overview

The following table summarises the assets and liabilities recorded in USD functional currency and the related impact of a 10% in/decrease in the currency exchange rate on balance sheet as of 31 December 2021 and 2020:

2021

2020

In thousands

Assets

$194,921

$205,286

Liabilities

$(9,506)

$(13,766)

Net currency position

$185,415

$191,520

Absolute impact on equity of 10% in /decrease in the currency exchange rate

€16,307

€15,666

The following table summarises the assets and liabilities recorded in NOK functional currency and the related impact of a 10% in/decrease in the currency exchange rate on balance sheet as of 31 December 2021 and 2020:

2021

2020

In thousands

Assets

kr 11,920,093

kr 9,362,231

Liabilities

kr (3,599,549)

kr (1,900,044)

Net currency position

kr 8,320,544

kr 7,462,187

Absolute impact on equity of 10% in /decrease in the currency exchange rate

€83,003

€71,089

investments in listed bonds and government bonds. All of the entity’s other debt financial assets at amortised cost and FVOCI are considered to have low credit risk, as the issuers of the instruments have a low risk of default evidenced by their strong capacity to meet their contractual cash flow obligations in the near term. Credit risk – CCP clearing business In its role as CCP clearer to financial market participants, the Group’s CCP guarantees final settlement of transactions acting as buyer towards each seller and as seller towards each buyer. It manages substantial credit risks as part of its operations including unmatched risk positions that might arise from the default of a party to a cleared transaction. Clearing membership selection is based upon supervisory capital, technical and organisational criteria. Each member must pay margins, computed and collected at least daily, to cover the exposures and theoretical costs which the CCP might incur in order to close out open positions in the event of the member’s default. Margins are calculated using established and internationally acknowledged risk models and are debited from participants’ accounts through central bank accounts and via commercial bank payment systems. Minimum levels of cash collateral are required. Non-cash collateral is revalued daily but the members retain title of the asset and the Group only has a claim on these assets in the event of a default by the member. Clearing members also contribute to default funds managed by the CCP to guarantee the integrity of the markets in the event of multiple defaults in extreme market circumstances. Amounts are determined on the basis of the results of periodic stress testing examined by the Risk Committees of the CCP. Furthermore, the Group’s CCP reinforces its capital position to meet the most stringent relevant regulatory requirements applicable to it, including holding a minimum amount of dedicated own resources to further underpin the protective credit risk framework in the event of a significant market stress event or participant failure.

Most operating revenue and expenses in the various subsidiaries of the Group are denominated in the functional currency of each relevant subsidiary. The Group’s consolidated income statement is exposed to foreign currency risk arising from receivables and payables denominated in currencies different from the functional currency of the related entity. Credit Risk The Group is exposed to credit risk in the event of a counterparty’s default. The Group is exposed to credit risk from its operating activities (primarily trade receivables), from its financing activities and from the investment of its cash and cash equivalents and short-term financial investments. The Group limits its exposure to credit risk by rigorously selecting the counterparties with which it executes agreements. Most customers of the Group are leading financial institutions that are highly rated. Investments of cash and cash equivalents in bank current accounts and money market instruments, such as short-term fixed and floating rate interest deposits, are governed by rules aimed at reducing credit risk: maturity of deposits strictly depends on credit ratings, counterparties’ credit ratings are permanently monitored and individual counterparty limits are reviewed on a regular basis. In addition to the intrinsic creditworthiness of counterparties, the Group’s policies also prescribe the diversification of counterparties (banks, financial institutions, funds) so as to avoid a concentration of risk. Derivatives are negotiated with leading high-grade banks. The Group’s trade and contract receivables, and other debt financial assets at amortised cost and FVOCI are exposed to credit risk. The maximum exposure to credit risk at the reporting date is the carrying value of each class of these financial assets. The Group evaluates the concentration of credit risk with respect to trade and contract receivables as low, as most of its customers are leading financial institutions that are highly rated. The other debt financial assets comprises i) debt investments at amortised cost, which include short-term deposits with a maturity over three months and ii) debt investments at FVOCI, which include

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2021 UNIVERSAL REGISTRATION DOCUMENT