Euronext Open To More Exchanges

Shanny Basar

Stéphane Boujnah, chief executive and chairman of the managing board of Euronext, said the pan-European exchange is open to other venues joining its federal model following its announced acquisition of the Irish Stock Exchange.

In November last year Euronext announced the acquisition of ISE, Ireland’s incumbent stock exchange operator and a global debt and fund listing venue, for €137m. Boujnah said on the Euronext 2017 results call today that the acquisition is expected to close next month, subject to regulatory approval.

He added: “The ISE acquisition is key for Euronext and the first exchange we have acquired since our initial public offering [in 2014]. We are open to expanding our federal model and for other independent exchanges in Europe to join us.”

Euronext already operates exchanges in Amsterdam, Brussels, Lisbon, London and Paris, which Boujnah has described as a “united in diversity” federal model. At the time of the ISE announcement he said the the federal model will add value through a single cross-country liquidity pool and a single proprietary technology platform and rule book while maintaining strong local input.

Deirdre Somers, chief executive of ISE, will join Euronext’s managing board and also have group-wide responsibility for debt, funds & exchange-traded fund listings as Dublin will become the global centre of excellence for Euronext’s group-wide activities in listing these products. Padraic O’Connor, non-executive chairman of ISE will be proposed as a new member of Euronext’s supervisory board and the Central Bank of Ireland is expected to join Euronext’s college of regulators.

Euronext added that Ireland is also in a strong position to seize opportunities arising from Brexit once the UK leaves the European Union as it is close to the UK business culture and inside the Eurozone.

The integration of ISE within Euronext is expected to generate cost cuts of €6m per annum, to be fully delivered in 2020, driven by the migration to Optiq, Euronext’s new proprietary trading platform, the aggregation of market data and using Euronext’s support functions.

Stéphane Boujnah, Euronext

Boujnah said: “We have spent €300m on acquiring eight companies and external growth is a priority.”

In addition to buying ISE, other acquisitions include an 11.1% minority stake in French clearing house LCH SA, a 20% stake in equities clearer EuroCCP, and FastMatch, a spot foreign exchange trading venue.

In March last year Euronext also created a joint venture with Algomi and  took a $10m minority stake in the bond information network in order to create a new trading facility to improve liquidity in the secondary market for European corporate bonds. The Euronext Synapse MTF for corporate bonds was launched in December last year in Europe.

Boujnah added: “Euronext Synapse should get US regulatory approval in 2018.”

Last year the exchange also launched Euronext Block, a pan-European block trading MTF, in preparation for MiFID II, the European Union financial regulation which went live last month.

An analyst on the results call questioned the number of staff leaving Euronext. Last month Euronext announced the departure of Lee Hodgkinson, head of markets and global sales and chief executive of Euronext London. After more than nine years at Euronext, Hodgkinson will leave in early April to become chief executive of OSTC, a London-based proprietary trading firm. Boujnah said a search firm had been hired to find a replacement for Hodgkinson.

“Euronext is changing profoundly so it is normal that good people who started projects will move on,” added Boujnah. “We have a rising generation of new leaders.”

Patrick Young, chief executive of Exchange Invest, said in his daily email newsletter: “Good results from Euronext and the agility for growth strategy, FastMatch acquisition et al are already going well…albeit the man behind much of that Lee Hodgkinson is leaving and that leaves a certain shadow over Euronext’s many achievements.”

Related articles

  1. Money Market Reform Switches to Europe

    MEMX reviewed recent S&P 500 stock splits to see the impact of changing round lots in high-priced stocks.

  2. SEC staff have been asked prepare new rule proposals for retail stock order handling and execution.

  3. AllianceBernstein will deconsolidate Bernstein Research from its financial statements after closing.

  4. CME, ICAP, Beast Apps Partner on Analytics

    The enhancements provide actionable insights within one click.

  5. Easy Money Tamps Down Volatility

    Increased volatility drives the buy side to take a closer look at how they are trading.