EURONEXT_Registration_Document_2017

RISKS

Strategic Risks

GLOBAL AND REGIONAL ECONOMY The Company’s operations and performance depend on market and economic conditions globally. Trends towards the liberalisation and globalisation of world capital markets have resulted in greater mobility of capital, greater international participation in local markets and more competition among markets in different geographical areas. As a result, global competition among trading markets and other execution venues has become more intense. Euronext’s operations are highly concentrated in Belgium, France, the Netherlands, Portugal and the United Kingdom, and its success is therefore closely tied to general economic developments in those countries and Europe generally and cannot be offset by developments in other markets. A weak economy and negative economic developments may impact growth targets and could limit the Group’s future prospects. Europe’s industrial activity has recovered and economic expectations have risen across several large developed economies. Four key themes will continue to be important for European securities markets in 2018: (a) the outlook for economic growth (b) the extension and subsequent tightening of ECB’s asset purchase programme and (c) political uncertainty resulting fromBrexit and (d) the Trump administration strategy. As a result, volumes are expected to grow in 2018 comparison to 2017 due to these market conditions. Economic conditions affect financial and securities markets in a number of ways, from determining availability of capital to influencing investor confidence. Accordingly, generally adverse market conditions may have a disproportionate and adverse effect on the Company’s business and impact its financial results. COMPETITION Euronext’s industry is highly competitive. The Company faces competition for listing, in providing primary listing services to issuers based on the Company’s home markets from other exchanges, in particular in respect of global companies and SMEs in the technology sector as well as in the corporate services market, where Euronext provides support to newly listed and existing companies. Trading and execution of cash equities and other cash products face pressure on pricing and market share given the competitive landscape. In addition, the market for derivatives trading, particularly equity options, and clearing remains challenging as a result of competition and consolidation, which can have an impact on Euronext’s pricing and related market share. In addition, Article 35 and 36 of EU Regulation No 600/2014 has brought into force open access clauses which, according to ESMA, may promote greater competition among market infrastructures. Market Data provides a wide range of data products to the global investment community, including pre- and post-trade market prices, indices, and reference data. The evolving competitive environment around data provision with other exchanges andmarket participants, coupled with the MIFID II provisions to provide certain data package to clients, the landscape will evolve and the outcome for Euronext is not known.

The Company’s current and prospective competitors are numerous and include both traditional and non-traditional trading venues. These include regulated markets, multilateral trading facilities (“MTFs”) and a wide range of over-the-counter (“OTC”) services provided by market makers, banks, brokers and other financial market participants. Some of these competitors are among Euronext’s largest customers or are owned by its customers. The success of the Group’s business depends on its ability to attract and maintain order flow, both in absolute terms and relative to other market centres. The Company faces competition from financial institutions that have the ability to divert trading volumes by offering more attractive prices due to the new regulation that MiFID II has brought to this part of the market, and the outcome of the behavior is not yet known. Also, in the event of a decrease in trading volumes, there is a risk that markets become less liquid and thus less attractive to investors and issuers. If Euronext fails to compete successfully, its business and financial results will be impacted. TRANSFORMATION The Company is exposed to transformation risks (risk of loss or failure resulting from change/transformation) given the current levels of change and alignment activity taking place across the Company. The Company has embarked on a new enhanced multi- market trading platform, Optiq®, bringing leading technology to ensure high reliability and improved latency. This technology has change impacts to Euronext Market Services and Technology teams given the innovation undertaken. Optiq Market Data Gateway was launched in 2017, and the core trading technology for the regulated markets is expected in 2018. If these programs are not completed, or do not operate as intended, identified synergies may not be delivered and the marketplace may be questioned. The Company has entered and may continue to enter into business combination transactions. The market for acquisition targets and strategic alliances is highly competitive, particularly in light of recent, or possible, consolidation in the exchange sector and existing or potential future restrictions on foreign direct investment in some countries. Pursuing strategic transactions requires substantial time and attention of the management team, which could prevent them from successfully overseeing other initiatives. Similarly, if acquisitions are initially agreed but not closed, such as the Irish Stock Exchange, this may impact our reputation and our strategic growth plan. Completing and recognising benefits of potential transactions takes time and can impact the Company’s business, and financial results. Euronext continues to explore and pursue opportunities to strengthen its business and grow the Company. In doing so, the Group may launch new products and enter into or increase its presence in other markets. In relation to the expansion of the Group’s business, Euronext plans to invest time in developing new products or improving current product offerings. If these product offerings are not successful, a potential market opportunity may be missed and Euronext may not be able to offset the cost of such initiatives, which may have a material impact on the Company’s financial results.

4

www.euronext.com

2017 REGISTRATION DOCUMENT