1. Consolidation and Efficiency Gains: the Euronext Model Olivier Lefebvre, Member of the Managing Board Euronext N.V. The Quest for Efficiency Louvain-la-Neuve, November 7th, 2006

2. 2 Euronext at a glance Euronext Model Created in 2000, Euronext is the cross-border exchange : in four years, Euronext brought together Amsterdam, Brussels, Lisbon, Paris and Liffe exchanges Euronext’s open architecture is focused on its core activity: trading and listing financial instruments and disengaged from clearing and settlement activities Technological integration of trading platforms is the the basis of its consolidation process Multi-juridiction model : several home regulators Horizontal model : divested from post-trade activities Synergies : single trading platform single rule book single list Goal: Meeting Users’ needs (market efficiency, low costs and reduced fees)

3. 3 Exchange A Investors Brokers Issuers Exchange B Investors Brokers Issuers Exchange C Investors Brokers Issuers Integration Model Cross border trades Remote membership

4. 4 Exchange A Investors Brokers Issuers Exchange B Investors Brokers Issuers Exchange C Investors Brokers Issuers Integration Model Cross border trades Remote membership Old View : Single market by concentration Loss of home valueAdjustment costLiquidity is sticky

5. 5 Single System Single Rule Book Exchange A Investors Brokers Issuers Exchange B Investors Brokers Issuers Exchange C Investors Brokers Issuers Integration Model: Euronext View Cross border trades Remote membership Single market by integration

6. 6 Single System Single Rule Book Exchange A Investors Brokers Issuers Exchange B Investors Brokers Issuers Exchange C Investors Brokers Issuers Integration Model – Five Economic Benefits Cross border trades Remote membership 1. Cost synergies 2. Direct access to full range = cost savings 5. No disruption of “home” markets 4. More international exposure 3. Reduce implicit trading costs by increased liquidity

7. 7 ZXP A Multi-jurisdiction model B F NL Euronext « RuleBook 1 » Listed companies choose their jurisdiction of Listing Members choose one “preferred” entry point The Euronext regulatory model

8. 8 A Multi-jurisdiction model Cooperation between 5 National Regulators Organised Through a MOU: AFM, AMF, CBFA, CNVM, FSA Chairs Committee, Steering Committee, 5 working parties The Euronext regulatory model

9. 9 Open Straight Through Processing Trading Central order books and harmonized market rules Local regulators. Local access points Clearing Central Counterparty. Optimized Risk Management Settlement Group

10. 10 1.Reduced internal operating costs (Explicit trading costs)  Savings on IT assets and human capital resources needed to access and monitor separate trading platforms  Optimized trading organization 2.Exchange fees decrease (Explicit trading costs)  Passing cost synergies to users 3.Wider trading opportunities  Larger set of directly tradable securities  Direct access to all Euronext markets  Increased cross-border trading 4.Increased liquidity (Implicit trading costs)  Lower bid-ask spread, greater volume, lower volatility Direct user benefits resulting from the integration of Euronext markets

11. 11 20012004 Liffe.Connect NSC DERIVATIVES TRADING CASH TRADING Independent Clearing LCH.Clearnet Independent Settlement & Custody Euroclear/Crest S.T.P Amsterdam, Brussels, London, Lisbon, Paris Amsterdam, Brussels, Lisbon, Paris An incontestable integration track record… …to 2, respecting domestic regulations From 10 trading systems…

12. 12 …delivering strong IT costs benefits… 206 176 164 160 150 63 77 40 2003200420052006e2007e Running costsDevelopment costs 268 253 203 200 € -15m € -50m 190 € -10m > One single trading platform for all cash markets > Close down of Brussels Datacenter > One single trading platform For all derivatives markets > Close down of Amsterdam and Lisbon Datacenters > AEMS integration > Increase in Trading Platforms capacity > Benefits from AEMS integration Note: Running costs include Depreciations

13. 13 Direct user benefits resulting from the integration of Euronext markets Trading fees (explicit trading costs) - Average trading fees fell by 30% in the period from 2001 to 2005 122.8 137.9 149.4 141.4 162.4 1.53 1.38 1.25 1.11 1.08 20012002200320042005 nb of trades (million)AVG fee per trade €

14. 14 Improved Direct Access and International Exposure - Example: More foreign members on Euronext Brussels

15. 15 Improved liquidity - Example: Euronext Brussels