The Paris Stock Exchange, historically known as the Paris Bourse or the Bourse de Paris, is the largest exchange in France and is now known as the NYSE Euronext.
Since 2000, the Paris Stock Exchange has existed as "Euronext Paris," one of five consolidated exchanges included within the pan-European "Euronext" marketplace. Equities, indices, bonds, commodities and derivatives are the financial instruments actively traded on the marketplace. In addition to the exchange in Paris, there are also installations in Amsterdam, Brussels, Lisbon and London. More than 1,300 companies are listed on the integrated electronic exchange, making it the largest capital market in Europe.
The vitality of the Paris marketplace is most commonly measured by the performance of the CAC 40 (CAC:IND) equities index. Managed by Euronext Paris, the index represents the 40 largest equities listed on the exchange in terms of liquidity and market capitalisation. Investment and trading operations conducted by Euronext Paris are regulated domestically by France's Ministry of Economics, le Comité des Établissements de Crédit et des Entreprises d'Investissement (CECEI), the banking commission, and the Autorité des Marchés Financiers (AMF).
As a whole, the Euronext exchange is immense in size. Through the consolidation of independent European markets into one universal marketplace, the Euronext has become a global leader of trade. As of November 2014, it was ranked the fourth-largest exchange in the world with a market capitalisation of US$3.5 trillion.
The inception of the new Paris Bourse in the early 19th century marks the beginning of the modern era of financial markets in France. Although similarities to the old, monopolistic Parisian market place were apparent, the new Paris Bourse was deemed a "public" place in which the trade of securities could be conducted. Its inception didn't provide unfettered free trade to the French people, but it did represent a movement of financial reform taking place in the region.
The home of the Paris Bourse was a grand structure named the Palais Brongniart. It was completed in 1826 and housed the open-outcry system of trade conducted within the exchange for the next 150 years.
The 1980s marked a period of systemic reforms for the Paris Bourse. In an attempt to regain business lost to the London Stock Exchange, the Paris Bourse integrated computer trading systems into trading operations performed at the exchange. By 1989, the open-outcry method of trading, which had defined trade at the Paris Bourse for hundreds of years, remained only in a limited capacity. By 1998, the exchange became a fully electronic marketplace.
In 1999, France's four premier financial institutions merged and underwent a comprehensive restructuring. The SBF, MATIF SA, MONEP SA and Société du Nouveau Marché consolidated into one new company, the "Paris Bourse SBF SA." Under this new formation, trading activities involving stocks, bonds, derivatives and commodities were all available from one exchange.
The year 2000 marked the official end of the Paris Bourse as an independent financial marketplace. The newly created Paris Bourse SBF SA merged with exchanges from Amsterdam and Brussels to create the first ever pan-European exchange, eventually named the Euronext N.V.
The Euronext provided fully integrated electronic trading options for investors and offered access to equities, debt, derivatives and commodities markets. In 2007, the Euronext exchange merged with the New York Stock Exchange, thereby creating the entity "NYSE Euronext." The merger was championed as a way to create a "truly global marketplace" and promote the international trading of equities, debt instruments and derivatives.
Russell Shor (MSTA, CFTe, MFTA) is a Senior Market Specialist at FXCM. He joined the firm in October 2017 and has an Honours Degree in Economics from the University of South Africa and holds the coveted Certified Financial Technician and Master of Financial Technical Analysis qualifications from the International Federation…