Paris Bourse
The Paris
Bourse (or "Bourse de Paris" in French) is the historical Paris stock exchange, known as Euronext Paris from 2000 onwards. The
building, known as the Palais Brongniart, is located in the Place
de la Bourse, in the II
arondissement, Paris.
History
And Functioning
Historically,
stock trading took place at several spots in Paris, including rue Quincampoix,
rue Vivienne (near the Palais Royal), and
the back of the Opéra Garnier (the Paris opera
house). In the early 19th century, the Paris Bourse's activities found a stable
location at thePalais Brongniart, or Palais de la
Bourse, designed by architect Alexandre-Théodore
Brongniart.
From the second half of the
19th century, official stock markets in Paris were operated by the Compagnie
des agents de change, directed by the elected members of a stockbrokers' syndical council. The number of
dealers in each of the different trading areas of the Bourse was limited. There
were around 60 agents de change (the official stockbrokers).
An agent de change had to be a French citizen, be nominated by
a former agent or his estate, and be approved by the Minister of Finance, and
he was appointed by decree of the President of the Republic. Officially, the agents
de change could not trade for their own account nor even be a
counterpart to someone who wanted to buy or sell securities with their aid;
they were strictly brokers, that is, intermediaries. In the financial
literature, the Paris Bourse is hence referred to as order-driven market, as
opposed to quote-driven markets or dealer markets, where price-setting is
handled by a dealer or market-maker. In Paris, only agents de change could
receive a commission,
at a rate fixed by law, for acting as an intermediary. However, parallel
arrangements were usual in order to favor some clients' quote. Moreover, until
about the middle of the 20th century, a parallel market known as "La
Coulisse" was in operation.
Until the late 1980s, the
market operated as an open outcry exchange,
with the agents de change meeting on the exchange floor of the
Palais Brongniart. In 1986, the Paris Bourse started to implement an electronic
trading system. This was known generically as CATS(Computer
Assisted Trading System), but the Paris version was called CAC (Cotation
Assistée en Continu). By 1989, quotations were fully automated. The
Palais Brongniart hosted the French financial derivatives exchanges MATIF and MONEP,
until they were fully automated in 1998. In the late 1990s, the Paris Bourse
launched the Euronext initiative,
an alliance of several European stock exchanges.
Operations
It operates the MATIF futures exchange, which trades futures and options on interest rate products and commodities, and MONEP,equity and index futures and options. All
products are traded electronically on the NSC system adopted by all of the Euronext
members. Transactions are cleared through LCH.Clearnet. Cash settlement is T+3. Trading hours are 9 am to
5:30 pm, Monday to Friday.
Structure And Indices
The equities market of the
Paris Stock Exchange is divided into the following sections:
• The Premier Marché, previously known as the Official List -
large French and foreign companies, and most Bond issues are included.
• The Second Marché - medium-sized companies are enlisted.
• Nouveau or New Marché - companies that are new on the block and require capital to support rapid expansion, get enlisted on this market which is associated with the European equity growth market, Euro.nm.
• Marché Libre is an additional market that is controlled by Euronext Paris for transactions in securities not listed on the other three markets. This market is however not regulated.
• The Second Marché - medium-sized companies are enlisted.
• Nouveau or New Marché - companies that are new on the block and require capital to support rapid expansion, get enlisted on this market which is associated with the European equity growth market, Euro.nm.
• Marché Libre is an additional market that is controlled by Euronext Paris for transactions in securities not listed on the other three markets. This market is however not regulated.
Euronext Paris calculates a
family of indices. The CAC 40 is
the exchange's benchmark, desseminated in real time.
Its components are included in the broader SBF 120 Index, a benchmark for
investment funds. The SBF 250 index, a benchmark for the long-term performance
of equity portfolios, includes all of the SBF 120; it is structured by sector.
The MIDCAC index includes 100 of the most liquid medium-size stocks on the
Premier Marché and Nouveau Marché calculated on the basis of opening and
closing prices, while the Second Marché index focuses on that market. Both
indices are benchmarks for funds. The Nouveau Marché Index represents stocks in
the growth market. The SBF-FCI index is based on a selection of convertible
bonds that represent at least 70% of the total capitalization of this market,
calculated twice daily. For derivatives, MONEP trades short-term and long-term
stock options and futures and options on a family of Dow Jones indices. MATIF's products include commodity
future and options on European rapeseed and
futures on rapeseed meal, European rapeseed oil, milling wheat, corn and
sunflower seeds; interest rate futures and options on the Euro notional bond,
five-year Euro and three-month PIBOR (Paris Interbank Offered Rate), and
futures on the 30-year Eurobond and
two-year E-note, and index futures on the CAC 40.
Key Figures
For the fiscal year ending December 2004, Euronext Paris recorded
sales of USD$ 522 million, a −12.9 decrease in sales from 2003.
Euronext Paris has a US$2.9 trillion total market
capitalization of listed companies and average daily trading value of its
combined markets of approximately $102 billion/€77 billion (as of 28
February 2007).
