DEFINITION of Paris Stock Exchange
Now known as the NYSE Euronext (NYX), the Paris Stock Exchange trades both equities and derivatives and posts the Consumer Advisory Council or CAC 40 Index. This index is made up of French companies although nearly half of these are owned by foreign entities. NYX seeks to offer the most modern and advanced trading platform and services available to traders.
BREAKING DOWN Paris Stock Exchange
The Paris Stock Exchange is part of a rich history. The NYX is the first European integrated stock exchange. It was created in 2000 when the Paris, Brussels and Amsterdam exchanges all merged. The addition of the Lisbon Stock Exchange followed.
The Amsterdam stock exchange was founded in 1611 and was the first of its kind. It began when the shipping company Verenigde Oostindische Compagnie sold shares to finance its operations. After the major merger in 2000, one year later the Euronext group acquired the London International Financial Futures and Options Exchange. In May 2006, NYSE Group entered a merger agreement with Euronext for $10 billion.
Further developments came in 2008, when NYSE Euronext developed its Universal Trading Platform, which was an electronic trading platform for bond, equities, options and futures. NYSE Euronext launched Euronext London in 2010; this was formed to attract international issuers. Although in 2010 Deutsche Börse obtained approval from U.S. antitrust authorities to acquire NYSE Euronext for US$9.53 billion; in December 2011, the European Union blocked the deal. The merger would have create the world’s largest multi-market trading exchange. Despite these antitrust concerns in 2013 Intercontinental Exchange (ICE) acquired NYSE Euronext for $8.2 billion. ICE then split NYSE Euronext operations into its London and continental European operations and launched a public offering of a newly formed Euronext N.V. in June 2014 with an initial price of €20 each to raise US$1.9 billion.
After the IPO a consortium of 11 investment groups (“reference shareholders”) took major stakes in the company in order to stabilize it. These were Euroclear, BNP Paribas, BNP Paribas Fortis, Société Générale, Caisse des Dépôts, BPI France, ABN Amro, and ASR. They owned 33.36% of Euronext’s capital and agreed to maintain a three-year lockup period during which they could not sell their holdings. Together, this group maintains three seats on the nine-member board.
Paris Stock Exchange and Listing Agreements
In order to trade on major exchanges, companies must compete listing agreements with the exchanges themselves. They must meet certain criteria; for example, in 2018 the NYSE has a key listing requirement that stipulated aggregate shareholders equity for last three fiscal years of greater than or equal to $10 million, a global market capitalization of $200 million, and a minimum share price of $4. In addition, for initial public offerings and secondaries issuers must have 400 shareholders. Other major exchanges include the Tokyo Stock Exchange or TSE, the New York Stock Exchange (NYSE), the Nasdaq, and the London Stock Exchange (LSE).