EURONEXT_Registration_Document_2017

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OPERATING AND FINANCIAL REVIEW

Overview

Derivatives clearing agreement On 14 October 2013, the Group entered into a clearing agreement with LCH SA in respect of the clearing of trades on our continental Europe derivatives markets (the “Derivatives Clearing Agreement”). Under the terms of this Derivatives Clearing Agreement Euronext agreed with LCH SA to share revenues and receives clearing fee revenues based on the number of trades on these markets cleared through LCH SA. In exchange for that we have agreed to pay LCH SA a fixed fee plus a variable fee based on revenues. The definition of the accounting treatment of this agreement requires significant management judgment for the valuation and weighting of

the indicators leading the principal versus agent accounting analysis. Based on all facts and circumstances around this arrangement, management has concluded that Euronext is ‘principal’ in providing Derivatives clearing services to its trading members. Therefore Euronext recognizes (i) the clearing fees received are classified as post trade revenues, and (ii) the fixed and variable fees paid to LCH SA as other operational expenses. Reference is also made to ‘Changes in accounting policies and disclosures’, with regards to the implication of new IFRS 15 ‘Revenue from contracts with customers’ under ‘Principle versus agent considerations.

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2017 REGISTRATION DOCUMENT