Euronext Looks To Diversify and Expand
Stéphane Boujnah, chief executive of Euronext, said the exchange group wants to expand its federal model in Europe and will continue to invest in London, even after the UK leaves the European Union.
Boujnah said at a media briefing today: “Since the Brexit vote we have expanded significantly in London and hiring Chris Topple shows the confidence of our ambitions.”
In July last year Euronext announced the appointment of Topple as chief executive of Euronext London, head of global sales across asset classes and a member of the managing board.
Topple had previously been co-head of Societe Generale Prime Services since May 2015 and was also responsible for leading prime brokerage and clearing services sales teams globally within Societe Generale’s Newedge Group.
At the briefing Topple said that London-based accounts make up 50% of revenues on Euronext’s core markets. He added there were significant opportunities for growth in London both organically post-Brexit and through acquisitions over the next year and a half.
Euronext completed its acquisition of spot FX trading network FastMatch in 2017 and purchased Commcise, the research evaluation and commission management software provider, in December last year.
“The first step was the acquisition of Fastmatch, and Commcise allows us to connect issuers and the buy side,” Topple added. “There will be more opportunities over the next 18 months.”
In foreign exchange, Fastmatch has three matching engines and Euronext expects to announce the location of an additional matching engine shortly.
“We are evaluating launching non-deliverable forwards and a broader FX product suite,” Topple added. “There is also a significant opportunity for client acquisition amongst the buyside and smaller banks.”
Another opportunity for organic growth is to gain more listings after Brexit. If issuers are already listed in London, they can join Euronext Dublin through a fast track process which only takes between four and six weeks.
“We had meetings last week and there is significant interest from issuers looking at dual listings post-Brexit,” said Topple. “Larger companies are are also looking at Paris and Amsterdam listings. Last year the largest fintech listing was in Amsterdam.”
Adyen went public in the Netherlands last year in an initial public offering which valued the payments company at approximately €7bn.
Mergers and acquisitions are also possible.
“There are lot of opportunities,” said Topple. “For example, CME’s acquisition on NEX showed there are opportunities to make value chains more efficient along the product lifecycle.”
Boujnah continued that the exchange group has been successful in diversifying through the Commcise and Fastmatch deals. The group wants to expand further into new asset classes and non-volume related businesses, but will also continue to invest in organic growth.
“Corporate services did not exist in 2016 and now generates €20m in revenues,” added Boujnah. “We also want to expand our decentralised model and become the ‘home sweet home’ for exchanges who want to keep deploying their fundamental DNA but want the scale of being backed by a large regulated business.”
The pan-European exchange group acquired the Irish Stock Exchange last year and Euronext Dublin completed the migration to Optiq, the group’s proprietary trading platform last month.
We are pleased to announce the successful migration of the 53 companies currently listed on Euronext Dublin to Euronext’s proprietary trading platform, Optiq® https://t.co/F0YaCSpZ0m | @euronext_ie pic.twitter.com/6wEPRkfJ5Y
— Euronext (@euronext) February 5, 2019
Dublin has also become the centre of excellence for debt and funds listings and exchange-traded funds within the Euronext group.
Euronext has also made an offer for Oslo Børs after shareholders held an auction against the wishes of the board of the Norwegian exchange. However, the Oslo Børs board has since invited an offer from Nasdaq.
“It is not a bidding war as we have already acquired more than 50.5% of the shares of Oslo Børs,” said Boujnah. “Once we have regulatory approval from the Norwegian authorities we will complete the transaction.”
— Euronext (@euronext) February 13, 2019
Boujnah continued that the deal could be completed before the end of the second quarter.
“We could expand beyond Norway,” said Boujnah. “For the moment our focus is in Europe.”
Clients will be able to report for both EU and UK through their existing connections.
A review of progress made on the G20's 2009 Directive tops the bill.
CCPs simplify the trade life cycle.
CFTC Chairman Giancarlo lays out future challenges and his legacy during his last FIA Boca address.
Trade group says inconsistent and duplicative regulation is an aggravating factor.