Leen Van Wambeke (NYSE Euronext)

1. THE EXCHANGE WORLD IN 2013
Economika Leuven – 5 November 2013
Leen Van Wambeke
Senior Business Development Manager Benelux
Paris
London
New York
© NYSE Euronext. All Rights Reserved.
Amsterdam
Lisbon
Brussels

2. THE ROLE OF AN EXCHANGE

3. THE ROLE OF AN EXCHANGE
3 MAJOR ACTIVITIES OF AN EXCHANGE
Exchanges provides companies with the facility to raise capital for growth and expansion through
selling shares to the investing public.
LISTING
TRADING
DATA PUBLISHING/
TECHNOLOGY
Clients : Issuers
Clients : Brokers and
indirectly retail and
institutional investors
Clients : Data providers,
banks

4. OUR BUSINESS
4

5. OUR BUSINESS
NYSE EURONEXT WORLDWIDE
15 exchanges – 7 cash, 8 derivates
New York
London
Lisbon
Paris
Amsterdam
Brussels
November 5, 2013
5

6. THE DIFFERENTIATING VALUE OF NYSE EURONEXT
THE DIVERSITY OF OUR BUSINESS AND CLIENTS
NYSE Euronext convenes the capital markets community through the platforms, products,
technologies, and services that enable issuers and traders to generate capital.
Equities
FICC
Listings
NYSE Euronext
Community
Market
Data
Advocacy
NYSE
Technologies
Indices
November 5, 2013
6

7. THE NEW REALITY
7

8. THE NEW REALITY
MIFID HAS FUNDAMENTALLY CHANGED THE
LANDSCAPE
MiFID
Increased use
of technology
Cross border
trading
Fragmentation
of order flow
Best Execution
Pre-Trade
transparency
COMPETITION
Focus on explicit
cost reduction
Focus on
latency
Post-Trade
transparency
Implicit cost
reduction
Increased
competition
New Venues
8

9. EUROPEAN TRADING LANDSCAPE HAS
BEEN RESHAPED
 Fragmented, dark & lit, local & pan-European…
Independent / Agency Broker
Consortium-owned
Broker-Dealer
Exchange-led
9

10. THE NEW REALITY
CHANGES IN ORDER EXECUTION
Visible liquidity
Participants have had to reassess the way in which business gets executed
Conventional,
Natural
Order Flow
Opaque or hidden liquidity
Public Markets
Exchanges’ iceberg orders
Dark Liquidity / Crossing
How will conventional order flows in Europe
interact with sophisticated next generation
stealth algorithms and ‘hidden’ flows of
liquidity?
Block and
Algorithmic
Order Flow
Internalisation
10
10

11. THE NEW REALITY
RESULT OF THESE CHANGES
•Competition in trading – new markets & platforms
•Fragmented liquidity
•Reduced transparency & multiple price references
•Lower trading fees
•Increased cost for brokers (particularly small & mid-sized players)
•Increased complexity
•Best execution
11

12. COMPETITION AND REGULATION IS EVOLVING IN EUROPE
Competition intense but stable
MiFID 2 opportunity

Levelling playing field with MTFs

Transparency requirements extended to more assets

Consolidated Tape for post-trade data under a commercial
model

Regulation of HFT in line with our current practices

OTF aims at capturing BCNs, but exact regime remains uncertain

Timing uncertain (around 2015)
Post-trade changes

Effects of crisis on market share (Aug 11):


Short-selling bans


Decline in value of French banks/insurance co’s
But: increase in value of French banks/insurance firms since January 2012
(Société Générale +47%), and trading in these has reverted back to 19.5%
of total volumes traded.
MTFs will face increasing pressure to become profitable

EMIR provides framework for interoperability arrangements

Recently launched interoperability arrangements are limited in
scope

Fragmentation of the EU post-trading landscape likely to
remain, given strong national differences
FTT

Challenges for implementation at EU level
*Market share on total EU turnover on CESR liquid stocks, source: TAG
12

13. THE EVOLUTIONARY PROCESS IS CONTINUING
 Attrition and consolidation of new entrants:
 NYFIX Euro Millennium acquired by NYSE Euronext
 Citadel acquired controlling stake in Equiduct
 Turquoise acquired by London Stock Exchange
 BATS and Chi-X Europe create BATS Chi-X Europe
 And more to come…
13

14. INTERCONTINENTAL EXCHANGE
 ICE-NYSE Euronext combination
Cautionary statement regarding forward looking statements:
This communication contains “forward-looking statements” made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify
forward-looking statements by words such as “may,” “hope,” “will,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “potential,” “continue,” “could,” “future” or
the negative of those terms or other words of similar meaning. You should carefully read forward-looking statements, including statements that contain these words, because they discuss our
future expectations or state other “forward-looking” information. Forward-looking statements are subject to numerous assumptions, risks and uncertainties which change over time. ICE and NYSE
Euronext caution readers that any forward-looking statement is not a guarantee of future performance and that actual results could differ materially from those contained in the forward-looking
statement.
Forward-looking statements include, but are not limited to, statements about the benefits of the proposed merger involving ICE and NYSE Euronext, including future financial results, ICE’s and NYSE
Euronext’s plans, objectives, expectations and intentions, the expected timing of completion of the transaction and other statements that are not historical facts. Important factors that could cause
actual results to differ materially from those indicated by such forward-looking statements are set forth in ICE’s and NYSE Euronext’s filings with the U.S. Securities and Exchange Commission (the
“SEC”). These risks and uncertainties include, without limitation, the following: the inability to close the merger in a timely manner; the inability to complete the merger due to the failure of NYSE
Euronext stockholders to adopt the merger agreement or the failure of ICE stockholders to approve the issuance of ICE common stock in connection with the merger; the failure to satisfy other
conditions to completion of the merger, including receipt of required regulatory and other approvals; the failure of the proposed transaction to close for any other reason; the possibility that any of
the anticipated benefits of the proposed transaction will not be realized; the risk that integration of NYSE Euronext’s operations with those of ICE will be materially delayed or will be more costly or
difficult than expected; the challenges of integrating and retaining key employees; the effect of the announcement of the transaction on ICE’s, NYSE Euronext’s or the combined company’s
respective business relationships, operating results and business generally; the possibility that the anticipated synergies and cost savings of the merger will not be realized, or will not be realized
within the expected time period; the possibility that the merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events; diversion of
management’s attention from ongoing business operations and opportunities; general competitive, economic, political and market conditions and fluctuations; actions taken or conditions imposed
by the United States and foreign governments or regulatory authorities; and adverse outcomes of pending or threatened litigation or government investigations. In addition, you should carefully
consider the risks and uncertainties and other factors that may affect future results of the combined company, as are described in the section entitled “Risk Factors” in the joint proxy
statement/prospectus filed by ICE with the SEC, and as described in ICE’s and NYSE Euronext’s respective filings with the SEC that are available on the SEC’s web site located at www.sec.gov,
including the sections entitled “Risk Factors” in ICE’s Form 10-K for the fiscal year ended December 31, 2012, as filed with the SEC on February 6, 2013, and “Risk Factors” in NYSE Euronext’s Form
10-K for the fiscal year ended December 31, 2012, as filed with the SEC on February 26, 2013. You should not place undue reliance on forward-looking statements, which speak only as of the date
of this written communication. Except for any obligations to disclose material information under the Federal securities laws, neither ICE nor NYSE Euronext undertakes any obligation to publicly
update any forward-looking statements to reflect events or circumstances after the date of this written communication.

15. THE CYCLE OF AN EXCHANGE ORDER

16. THE CYCLE OF AN ORDER
THE CYCLE OF AN ORDER
Settlement (CSD)
Clearing (CCP)
Clearingmember
Clearingmember
Confirmation
Confirmation
Broker
Order
Broker
Trading
(Exchange)
Confirmation

NYSE Euronext
Bevestiging
Order

Buyer
Seller

17. THE CYCLE OF AN ORDER
COUNTERPARTY RISK
Clearing
house

18. THE ROLE OF AN EXCHANGE
CONNECTING THE CAPITAL MARKETS
INVESTORS
Connecting investors to the world’s
financial markets
MARKETS
COMPANIES
Providing the capital businesses need
to compete, grow, and create jobs
CAPITAL
INDIVIDUALS
Giving everyone ownership of the future
growth of their economies
ACCOUNTABILITY
Advocating for fair, transparent,
properly regulated markets to
promote business recovery and
growth
OWNERSHIP
PROSPERITY
November 5, 2013
18

19. THE CENTRAL ORDERBOOK

20. THE NEW REALITY
MARKTPARTICIPANTS
Private
Investors
Institutional
investors Buy
Side
Bank Traders
Hedge funds
Brokers
Orders
NYSE Euronext
Liquidity
Market
Makers
Proprietary
Traders
Algoritmic
Traders
20

21. MARKET QUALITY ON THE BRUSSELS MARKET
NYSE Euronext remains price discovery platform setting
highest EBBO, with deepest available liquidity at BBO and
smallest spread on BEL 20
Implicit volatility on CAC 40 and quote spread
(in bps, CAC 40 volatility index used as indicator)
50%
40
40%
30
BEL 20
50
30%
Available liquidity at BBO(€)
Mar-13
Feb-13
20
20%
Euronext
45 821
44 120
10
10%
MTF average1
18 259
18 224
-
0%
NYSE Euronext
MTF Average
CAC 40 Volatility
Overview of % presence time at European Best Bid and Offer (EBBO)
BEL 20
EBBO
EBBO with greatest size
EBBO setter
Mar-13
Feb-13
Mar-13
Feb-13
Mar-13
Feb-13
Euronext
67%
68%
31%
32%
56%
57%
MTF average1
37%
37%
3%
3%
11%
11%
More information is available on our website http://europeanequities.nyx.com/en/market-quality
1 MTF average takes into account Chi-X, Turquoise, BATS and Equiduct as alternative trading venues.
Source: TAG Audit
21

22. PRICE FORMATION
Euronext is an order driven market:
PRICE
Sellers
Equilibrium
price
Buyers
Traded
Volume
VOLUME

23. ORDERS
4 basic data to pass an order :
1. Direction : buy or sell
2. Identification of the share or instrument
3. Number of shares you want to buy or sell
4. Price indication (or not)
optionally : the validity (max 1 year)
23

24. Validity of an order
Without indication:
• 1 day valid
Indication:
• Precise date
• Maximum 1 year
24

25. Trading methodology
Continuous
•
•
•
Continuous trading
Big number of shares traded usually
Constant price movements
Fixing
•
•
•
Short trading possibility, namely 30’
Smaller number of usual trades
1 or 2 fixings per day
Selection based on the liquidity of the share
25

26. Continuous trading agenda
7h15 till 9h
preopening (collecting bid & ask)
at 9h
opening price
from 9h to 17h30
trading
from 17h30 to 17h35
pre closing
at 17h35
closing price
from 17h35 to 17h40
trading at closing price
26

27. Typical fixing agenda
from 7h15 to 11h30
preopening (collecting bid & ask)
at 11h30
opening price
from 11h30 to 12h
trading at fixing price
from 12h to 16h30
preopening (collecting bid & ask)
at 16h30
closing price
from 16h30 to 17h
trading at closing price
27

28. PREOPENING
Centralisation of all buy and sell orders
Enter new orders
Modify existing orders
Cancel orders

29. OPENING PRICE
Principles :
three priority rules
1. Price with highest volume
2. Lowest surplus
3. Closest to reference price at the limit of the
reduced order(s)

30. EXECUTION PRIORITIES AT OPENING
1. Orders with better price limit (all executed)
2. Orders without limit
3. Orders limited at opening price
FIFO principle except for MiFID service

31. Continuous trading
New orders can be introduced from 9h00 to 17h30
through a Euronext member
If matching : immediate execution and a new price
is disseminated
BUT : Price deviations safeguards
31

32. Closing fixing
Goal
Calculation of closing price
Centralisation of bids and offers during pre-closing
phase (everybody can participate)
Identical calculation as opening or fixing
32

33. Trading at Last
You can still trade at closing or fixing price
The price does not change any more
33

34. BEFORE PREOPENING
LAST
25,36
Quantity
TOP
# orders
quantity
limit buy
limit sell
quantity
# orders
1
250
25,38
25,41
3000
6
2
300
25,37
25,42
2500
2
1
200
25,36
25,43
300
1
8
12000
25,35
25,44
100
1
25,45
10000
12

35. BEFORE PREOPENING
BUY
SELL
PRICE
saldo not
matched
Total
number of
shares
Total
number of
shares
matched
0
0
opening
15.900
15.900
0
0
25,45
15.900
15.900
10.000
0
0
25,44
5.900
5.900
100
0
0
25,43
5.800
5.800
300
0
0
25,42
5.500
5.500
2.500
0
0
25,41
3.000
3.000
3.000
0
0
25,40
0
0
0
0
25,39
0
0
250
250
0
25,38
-250
0
300
550
0
25,37
-550
0
200
750
0
25,36
-750
0
12.000
12.750
0
25,35
-12.750
0
12.750
0
opening
-12.750
0
Nmb of
shares
Nmb of
shares

36. PREOPENING : BUY 200 @ OPEN, 2000 @ 25,40
SELL 350 @ OPEN, 1000 @ 25,38
BUY
SELL
Nmb of
shares
Total
number of
shares
PRICE
saldo not
matched
Total
number of
shares
matched
200
200
200
opening
17.050
17.250
200
200
25,45
17.050
17.250
10.000
200
200
25,44
7.050
7.250
100
200
200
25,43
6.950
7.150
300
200
200
25,42
6.650
6.850
2.500
200
200
25,41
4.150
4.350
3.000
2.200
1350
25,40
-850
1.350
2.200
1350
25,39
-850
1.350
250
2.450
1350
25,38
-1.100
1.350
300
2.750
350
25,37
-2.400
350
200
2.950
350
25,36
-2.600
350
12.000
14.950
350
25,35
-14.600
350
14.950
350
opening
-14.600
350
2.000
Nmb of
shares
1.000
350

37. BEFORE PREOPENING
LAST
25,36
Quantity
TOP
# orders
quantity
limit buy
limit sell
quantity
# orders
1
250
25,38
25,41
3000
6
2
300
25,37
25,42
2500
2
1
200
25,36
25,43
300
1
8
12000
25,35
25,44
100
1
25,45
10000
12

38. PREOPENING : BUY 200 @ OPEN, 2000 @ 25,40
SELL 350 @ OPEN, 1000 @ 25,38
LAST
25,36
Quantity
TOP
25,39
# orders
quantity
limit buy
limit sell
quantity
# orders
1
200
open
open
350
1
1
2000
25,40
25,38
1000
1
1
250
25,38
25,41
3000
6
2
300
25,37
25,42
2500
2
1
200
25,36
25,43
300
1

39. PREOPENING : BUY 1200 @ 25,41
BUY
SELL
Nmb of
shares
Total
number of
shares
PRICE
saldo not
matched
Total
number of
shares
matched
200
200
200
opening
17.050
17.250
200
200
25,45
17.050
17.250
10.000
200
200
25,44
7.050
7.250
100
200
200
25,43
6.950
7.150
300
200
200
25,42
6.650
6.850
2.500
1.200
1.400
1400
25,41
2.950
4.350
3.000
2.000
3.400
1350
25,40
-2.050
1.350
3.400
1350
25,39
-2.050
1.350
250
3.650
1350
25,38
-2.300
1.350
300
3.950
350
25,37
-3.600
350
200
4.150
350
25,36
-3.800
350
12.000
16.150
350
25,35
-15.800
350
16.150
350
opening
-15.800
350
Nmb of
shares
1.000
350

40. PREOPENING
LAST
25,36
Quantity
TOP
25,39
# orders
quantity
limit buy
limit sell
quantity
# orders
1
200
open
open
350
1
1
2000
25,40
25,38
1000
1
1
250
25,38
25,41
3000
6
2
300
25,37
25,42
2500
2
1
200
25,36
25,43
300
1

41. PREOPENING : BUY 1200 @ 25,41
LAST
25,36
Quantity
TOP
25,41
# orders
quantity
limit buy
limit sell
quantity
# orders
1
200
open
open
350
1
1
1200
25,41
25,38
1000
1
1
2000
25,40
25,41
3000
6
1
250
25,38
25,42
2500
2
2
300
25,37
25,43
300
1

42. OPENING
BUY
SELL
Nmb of
shares
Total
number of
shares
PRICE
saldo not
matched
Total
number of
shares
matched
200
200
200
opening
17.050
17.250
200
200
25,45
17.050
17.250
10.000
200
200
25,44
7.050
7.250
100
200
200
25,43
6.950
7.150
300
200
200
25,42
6.650
6.850
2.500
1.200
1.400
1400
25,41
2.950
4.350
3.000
2.000
3.400
1350
25,40
-2.050
1.350
3.400
1350
25,39
-2.050
1.350
250
3.650
1350
25,38
-2.300
1.350
300
3.950
350
25,37
-3.600
350
200
4.150
350
25,36
-3.800
350
12.000
16.150
350
25,35
-15.800
350
16.150
350
opening
-15.800
350
Nmb of
shares
1.000
350

43. AFTER OPENING
BUY
SELL
PRICE
saldo not
matched
Total
number of
shares
0
opening
15.850
15.850
0
0
25,45
15.850
15.850
10.000
0
0
25,44
5.850
5.850
100
0
0
25,43
5.750
5.750
300
0
0
25,42
5.450
5.450
2.500
0
0
25,41
2.950
2.950
2.950
2.000
0
25,40
-2.000
0
2.000
0
25,39
-2.000
0
250
2.250
0
25,38
-2.250
0
300
2.550
0
25,37
-2.550
0
200
2.750
0
25,36
-2.750
0
12.000
14.750
0
25,35
-14.750
0
14.750
0
opening
-14.750
0
2.000
Total
number of
shares
matched
0
Nmb of
shares
Nmb of
shares

44. PREOPENING
LAST
25,36
Quantity
TOP
25,41
# orders
quantity
limit buy
limit sell
quantity
# orders
1
200
open
open
350
1
1
1200
25,41
25,38
1000
1
1
2000
25,40
25,41
3000
6
1
250
25,38
25,42
2500
2
2
300
25,37
25,43
300
1

45. OPENING
LAST
25,36
Quantity
TOP
25,41
# orders
quantity
limit buy
limit sell
quantity
# orders
1
200
open
open
350
1
1
1200
25,41
25,38
1000
1
1
2000
25,40
25,41
3000
6
1
250
25,38
25,42
2500
2
2
300
25,37
25,43
300
1

46. AFTER OPENING
LAST
25,41
Quantity
1400
TOP
25,41
# orders
quantity
limit buy
limit sell
quantity
# orders
1
2000
25,40
25,41
2950
6
1
250
25,38
25,42
2500
2
2
300
25,37
25,43
300
1
1
200
25,36
25,44
100
1
8
12000
25,35
25,45
10000
12
9h00
1400
25,41

47. AFTER OPENING
CONTINUOUS
LAST
25,41
Quantity
1400
TOP
25,41
# orders
quantity
limit buy
limit sell
quantity
# orders
1
2000
25,40
25,41
2950
6
1
250
25,38
25,42
2500
2
2
300
25,37
25,43
300
1
1
200
25,36
25,44
100
1
8
12000
25,35
25,45
10000
12
9h00
1400
25,41

48. CONTINUOUS TRADING : SELL 2500 @ ANY PRICE
LAST
25,37
Quantity
3900
TOP
25,41
# orders
quantity
limit buy
limit sell
quantity
# orders
1
2000
25,40
25,41
2950
6
1
250
25,38
25,42
2500
2
2
300
25,37
25,43
300
1
1
200
25,36
25,44
100
1
8
12000
25,35
25,45
10000
12
9h01
250
25,37
9h01
250
25,38
9h01
2000
25,40
9h00
1400
25,41

49. CONTINUOUS TRADING
AFTER 2500 SHARES SOLD
LAST
25,37
Quantity
3900
TOP
25,41
# orders
quantity
limit buy
limit sell
quantity
# orders
1
50
25,37
25,41
2950
6
1
200
25,36
25,42
2500
2
8
12000
25,35
25,43
300
1
25,44
100
1
25,45
10000
12
9h01
250
25,37
9h01
250
25,38
9h01
2000
25,40
9h00
1400
25,41

50. LIMITATION ON MARKET MOVEMENTS
Collars
For the biggest companies
Reservations
For small and midcaps
Calculated on the reference price
which is the price of the last trade

51. PRICE DRIVEN MARKET SPECIFICITIES
• Buyer does not meet seller
• Client meets broker who meets market maker
• Phone based trading
• Multiple reporting of transactions
 Client - broker
 Broker - Market maker
 Market maker – Market maker
• Spread is price for liquidity

52. Buy 25,40 - 25,42 Sell
Client A
buy 100
MM 2
2
shares @
25,45
Client D
buy 30
shares
Client P
5
sell 100
shares @
25,40
25,40 – 25,43
shares @
25,41
buy 50
shares @
25,42
25,39 – 25,42
Client B
Client C
sell 150
1
shares @
25,42
buy 200
Client S
MM 1
MM 3
Client R
3
sell 100
4
25,40 – 25,44
shares
6
Client T
sell 50
25,42 25,42 25,40 25,42 25,40 25,40
100
50
100
30
100
50
100
150
250
280
380
430
shares @
25,35

53. Confidential
53

54. Confidential
54

55. THE EURONEXT EXPERIENCE

56. PALAIS DE LA BOURSE : CHANGE AND
CONTINUITY
56

57. BRUSSELS BELL CEREMONIES
•Didier Reynders, Deputy Prime Minister and Minister of Finance.
•Vincent Van Quickenborne, Minister of Enterprise and Simplification.
•Benoît Cerexhe, Minister of the Government of Brussels-Capital.
•Arif Havas Oegroseno, Ambassador of Indonesia to Belgium and Luxembourg.
•Viscount Etienne Davignon, Minister of State.
•William E. Kennard, US Ambassador to the European Union.
57

58. Corporate responsibility
Make a wish
World autism day
Sanofi-Pasteur
Bond Zonder Naam
International Women’s Day
58

59. Retail Education
Financial Cocktails
With VFB and financial partner
Retail fairs participation
VFB/Mediafin
59

60. 18 March 1991 – 18 March 2011 : 20 years BEL 20
60

61. Belgian Day in New York
61

62. For internal use only
62

63. WWW.BEURS.BE
Vragen? infobrussels@nyx.com

64. DISCLAIMER
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© september 2012, NYSE Euronext – alle rechten voorbehouden.
64