Do not confuse the market organization for how concretely and physically organize the exchange of securities that is the subject of this article and control of markets is that of public authority (in France, mainly AMF) and that is the subject of a separate article .

The market organization in France
The market organization in France is the responsibility of Euronext, a private company which operated until 2007 and the Paris, Amsterdam, Brussels, Lisbon and the LIFFE derivatives market of English and merged on that date with the New York Stock Exchange to form the new NYSE Euronext, which operates six spot markets (France, Belgium, Netherlands, Portugal, USA) and six derivatives exchanges (France, Belgium, Netherlands, Portugal, UK, USA) on both sides of the Atlantic. NYSE Euronext is listed in Paris and New York.


Although they are in France brought together in a single stock, and in this sense we can say that they form one market, one can actually distinguish between two types of markets, both for historical reasons and for practical reasons, it is the market “spot” market and derivatives, the first comprising all that is not in the second. For a long time in France, these markets were not managed by the same company as there was on one side of the market shares and bonds which was managed by the French Society Scholarship (SBF), the other the MONEP (market options , a subsidiary of the SBF) and finally the MATIF (futures market), three structures subsequently merged into Euronext. In many countries, the derivatives market is managed separately (and in Britain, Liffe is quite distinct from the London Stock Exchange since it is part of Euronext). In France, although managed by Euronext as the market says “cash”, the derivatives market continues to have rules and tools.

The market derivatives, what is it?

Inside the market “spot”, can treat many types of products, all of which have very different characteristics. It is in this sense we can speak of equity markets, interest rate markets (including bonds), trackers, ……

Compartments of the stock market in France
In April 2005, the first, second and new market (a classification based on company size and transaction volumes) were combined in a single market: Eurolist. To give a clearer picture of companies, companies listed on Eurolist are divided into three compartments (A, B and C) according to their market capitalization . All these companies, whether French or international, are required to answer a number of commitments, particularly with regard to the information publications. This regulatory framework is a guarantee of security for individuals.

The Free Market has been preserved. Attention, it is not regulated under the EU directive, which means that companies are not subject to the same rules in terms of information. Investors should therefore exercise caution and vigilance. In addition, transaction volumes may be low on certain values, creating extreme price fluctuations and it is sometimes difficult to find a counterparty and therefore to buy and sell such securities.

Between the Eurolist and the Free Market, one of whose obligations are quite significant for small and medium enterprises and the other with a relatively low liquidity, Euronext created a market intermediary dedicated to SMEs: Alternext. It is unregulated, but structured and regulated by Euronext companies listed on them undertake to apply the rules which, although less stringent than those in force on the Eurolist, are such as to ensure investor protection and support liquidity.

The role of Euronext, the market operator
Euronext is a market, or a meeting of markets over 6 countries since the formation of NYSE Euronext in 2007. But it is not a market and has specific functions, noting in each country, its status as market operator: it ensures the functioning of markets, their safety, transparency and development. Under the control of the market authorities (in France, the AMF), Euronext sets out the rules:

• Membership providers of investment services who wish to be members of its markets;
• Admission to trading companies
• markets operate it organizes.

Thus fall within its jurisdiction:

• management and supervision of markets and trading systems
• dissemination of real-time quotes
• the control of members of the markets
• assistance to companies listed for trading in their securities and manage their financial operations.

Schematically, Euronext offers services to investors and companies can be grouped into three broad categories:
listing (listing, publication and updating of the list of securities and derivatives traded and their courses),
trading (order matching purchase and sale).
dissemination of information, including prices and market data, with data vendors specialized press, etc..

How is liquidity?
The primary function of the scholarship is to enable investors to buy and sell securities on the secondary market. This is called liquidity. In fact, any IPO would win success if it was not with the guarantee to be able subsequently to transfer the securities acquired.

A liquid market is a market where there are so many transactions. Conversely an illiquid market is a market in which only involved little exchange. As a liquid has the double advantage of being easily negotiated and not be subject to manipulation of its course. Conversely, a single operator can weigh heavily on the price of a security illiquid.

Small and mid-cap may have recourse to liquidity providers. Investment firms Euronext members, liquidity providers are linked to the company by a liquidity and Euronext by a contract whereby they agree to simultaneously positioning commands to the purchase and sale in a fork (to avoid excessive volatility) and regularly (to ensure a stock quotation).

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