Euronext // 2021 Universal Registration Document

Risk management & Control Structure

Risk Factors

OWNERSHIP AND INTELLECTUAL PROPERTY RISK

Risk Identification and Description

Potential Impact on the Group

Euronext owns or licenses rights to a number of trademarks, service marks, trade names, copyrights, free or open source software, applications, products, specific deliverables, software and databases that are used in its business, which are installed on premises or accessible through and hosted in a third party environment/infrastructure sometimes located outside of the territory where Euronext is based. There is a risk that this intellectual property could be misappropriated by third parties. There is also a risk that during its business activities, Euronext could inadvertently infringe third party IP rights, particularly as (i) Euronext’s business becomes increasingly digitalised and relies more on third party software, environment/infrastructure or editors to support and operate a number of its applications (ii) Euronext is subject to the replacement of initial IP rights by new IP rights without having the possibility to validate these newly replaced IP rights, therefore putting Euronext in a situation in which it would be liable for infringement as it is obliged to continue to use the software, applications, solution or database concerned (iii) IP rights owners can proceed at any moment to verification and audit knowing that they are solely in possession of or in capacity to understand the applicable metrics in the frame of a licence. Failure to protect the Group’s intellectual property rights or the inadvertent infringement of third party intellectual property rights could result in damage to the Group’s reputation.

Failure to protect intellectual property adequately could harm the Group’s reputation and affect its ability to compete effectively, the value of that intellectual property as an asset may be diminished, while some licensing or product revenues relating to that intellectual property may also be diminished. Further, defending the Group’s intellectual property rights may require significant financial and managerial resources. Any of the foregoing could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects. In the event that third parties assert intellectual property rights claims against the Group these claims, with or without merit, could be expensive to litigate or settle and could divert management resources and attention. Successful challenges against could require the Group to modify or discontinue its use of technology or business processes where such use is found to infringe or violate the rights of others, or require the Group to purchase licences from third parties, any of which could have a material adverse effect on the Group’s business, results of operations, financial condition and prospects.

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FINANCIAL RISKS

CREDIT RISK

Risk Identification and Description

Potential Impact on the Group

Non-Clearing The Group may incur a loss that would impact its net income should one of the counterparties to which it is exposed defaults. Adverse changes in economic environment may increase loss allowance provisions which would negatively impact the net income of the Group. With respect to the Group’s power market, should a participant default beyond the collateral cover, the entity could incur losses. Clearing Should a default of a CCP clearing member not be manageable within the resources available, the CCP’s (and by extension the Group’s) reputation and financial resources may be adversely impacted. In the remote case of usage of the CCP’s own resources (“Skin in the Game”) during a default of a clearing member, the CCP must restore its Skin in the Game to continue to fulfill the regulatory requirements. If CCP reserves and/ or capital surplus are not sufficient to replenish the skin in the game contribution, CCP shareholders would be asked to replenish them. The financial and reputational impact of CCP recapitalisation on the Group may be significant.

Non-Clearing 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 default. The Group’s power market is potentially subject to credit risk should one of its counterparties default with an amount in excess of the collateral provided outstanding. Clearing The Group’s CCP assumes the counterparty risk for all transactions that are cleared through its market. The credit risk is thus the risk of a CCP member default i.e. that one of the parties to a cleared transaction defaults on their obligation; in this circumstance the CCP is obliged to honor the contract on the defaulter’s behalf and thus an unmatched risk position arises. The CCP is required to make a proportion of its regulatory capital available (“skin in the game”) to cover potential residual defaulting losses following the exhaustion of the defaulter’s resources (margins and default fund contribution) before allocating remaining losses to non-defaulting members’ default fund allocation. The CCP may suffer a loss in the process of closing the positions of the defaulter if the market moves against them. The CCP is also exposed to Credit Risk linked to treasury counterparties default as any other entity of the Group (see Credit Risk Paragraph above). Credit risk related to CCP Investments are subject to the CCP Investment Policy which is aligned with EMIR regulation, and described under Market Risk in the “Clearing” Sub-section. The Group’s power market, is potentially subject to credit risk should one of its counterparties default with an amount in excess of the collateral provided outstanding.

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2021 UNIVERSAL REGISTRATION DOCUMENT