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What is Euronext?

Andrew Burger
Andrew Burger

Euronext, formally known as NYSE Euronext®, is a centralized European securities and derivatives exchange that brings together trading across national exchanges in continental Western Europe and the United States. Established in October 2000 by the merger of the Amsterdam, Brussels and Paris exchanges, the exchange group expanded to include the Lisbon stock exchange and acquired the shares of the London International Financial Futures Exchange (LIFFE). Euronext was acquired by the New York Stock Exchange in April 2007 following a long takeover battle with Deutsche Börse, thereby marking the first ever transcontinental merger of major stock exchanges while providing further evidence of how technology and market liberalization have been primary drivers in the globalization of money and capital markets. NYSE Euronext® opened a securities market in London in July 2010 looking to compete with the London Stock Exchange (LSE) on its home ground by enabling international companies to raise capital by issuing shares and other securities.

More than 1,400 companies from 35 countries had issued securities on the exchange group's markets as of 2010. All of them were traded via a unified electronic trading systems platform based on common market and trading rules, and all transaction clearing is taken care of via a single electronic system. Euronext handles all transaction settlements.

Euronext involves the stock exchanges of several countries.
Euronext involves the stock exchanges of several countries.

In terms of organizational structure, NYSE Euronext® is made up of a main market where equities, closed-end funds, bonds, exchange-traded funds, warrants and certificates can be traded via Paris, Amsterdam, London, Brussels and Lisbon. NYSE Alternext® is a market listing the shares of small and medium-size companies. Another step down in size — as well as listing requirements and reporting regulations — is the Free Markets, or Marché Libre. Run autonomously, NYSE LIFFE® adds an extensive range of financial futures, as well as precious metals and other commodity futures, and options contracts to NYSE Euronext's® securities offerings.

Despite consolidation, there are notable exceptions that temper NYSE Euronext's® claims of being a pan-European stock exchange and, subsequent to being acquired by the NYSE, global stock exchange. Leading international companies from Brazil, China and Japan do issue equities and other securities on its markets, but that's also true of the other major European exchanges. Moreover, the LSE acquired Borsa Italiana, Italy's main stock exchange, in 2007, and has long been considered the center of international financial markets in the European time zone. Similarly, Deutsche Börse is the exchange of choice for many of German companies, as well as a growing number of foreign companies, as is true for Spain's main stock exchange, the Bolsa de Madrid.

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    • Euronext involves the stock exchanges of several countries.
      By: Tupungato
      Euronext involves the stock exchanges of several countries.