Euronext victorious in European court battle

Euronext wins appeal against having to set aside €250 million in equity.

A Dutch Court has ruled in favour of stock exchange operator Euronext after it disputed capital requirements for it to keep €250 million in equity.

After the financial crisis Euronext was subjected to the same capital adequacy rules as some European banks, meaning it was also subjected to the same capital requirements – something which the company disputed.

Euronext claims it was the only exchange operator categorised in this manner.

The rules required that the company’s balance sheet show positive tangible equity by 2017.

In May, Euronext said that it believed the requirement could negatively impact its strategic plan and create an unlevel playing field against its competitors.

It concluded that an appeal should be launched in order to obtain an independent, fair, judgment.

Euronext appealed against the Dutch Ministry of Finance at the District Court of Rotterdam on 31 March 2015.

The company’s share price had stood at €45.10 at the opening of trading on 17 December 2015 before its shares were suspended at 9.00am Central European Time ahead of the verdict.

In a statement, Euronext said: “This is a precautionary action pending a verdict that is to be received later this morning from the District Court of Rotterdam, The Netherlands in the appeal procedure between Euronext N.V. and Euronext Amsterdam N.V. and the Dutch Minister of Finance related to the consolidated capital requirements.”

Trading is expected to resume later today following an analysis of this verdict. When contacted by The TRADE, a spokeswoman for Euronext said a further statement would be released later today.

Earlier this month, Euronext announced it would appeal a €5 million euro fine following the decision from the French market regulator, Enforcement Committee of the Autorité des Marchés Financiers (AMF).

It is claimed that Euronext failed to meet its professional obligations and favoured one market member over others.

Stéphane Boujnah, Euronext CEO and chairman of the managing board, said: “The AMF Enforcement Committee’s decision is particularly open to dispute, totally disproportionate and completely anachronistic.”