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The Paris Bourse (or "Bourse de Paris" in

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*~1Best~*   Friday, 09/07/07 05:44:56 PM
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The Paris Bourse (or "Bourse de Paris" in French) is the Paris stock exchange, known as Euronext Paris from 2000 onwards.

Historically, stock trading activities have been located in several spots of the Parisian geography, including the rue Quincampoix, the rue Vivienne (near the Palais Royal), or the back of the Opéra Garnier (the Paris opera house). In the early nineteenth century, the Paris Bourse's activities found a stable location at the Palais Brongniart, or Palais de la Bourse (the building is due to architect Alexandre-Théodore Brongniart).

From the second half of the nineteenth 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 participants in the processes of the formation of prices and of exchange in each of the different trading areas of the Bourse was limited. In the case of the agents de change (the official stockbrokers at the Paris Bourse), there were around 60. An agent de change had to be a French citizen, be nominated by a former agent or his estate, be approved by the Minister of Finance, and was appointed by decree of the President of the Republic. Officially, the agents de change could not trade for their own account nor therefore 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 oppose 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 Žfixed by law, for acting as an intermediary. However, parallel arrangements were usual in order to favor some clients' quote. Moreover, until approximately the middle of the twentieth century, a parallel market known as "La Coulisse" was in operation.

Until the late 1980s, this market was operating as an open outcry exchange, with the "agents de change" (the Parisian stockbrokers) meeting in the exchange floor of the Palais Brongniart. In 1986, the Paris Bourse started implementing an electronic trading system known as CATS (Computer Assisted Trading System), renamed CAC (Cotation Assistée en Continu) for the Parisian version. By 1989, quotation was fully automated. The Palais Brongniart was then hosting the French financial derivatives exchanges MATIF and MONEP, until full automation of these in 1998. In the late 1990s, the Paris Bourse launched the Euronext initiative, which consisted in the alliance of several European stock exchanges.

Euronext Paris is France's securities market, formerly known as the Paris Bourse, which merged with the Amsterdam and Brussels exchanges in September 2000 to form Euronext NV, which is the second largest exchange in Europe behind the London Stock Exchange.

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.[1] Trading hours are 9 a.m. to 5:30 p.m., Monday through Friday.

[edit] Structure and Indices

The French equities market is divided into three sections. The Premier Marché, formerly called the Official List, includes large French and foreign companies, and most Bond issues. The Second Marché, lists medium-sized companies, while Nouveau Marché lists fast-growing start up companies seeking capital to finance expansion, linked to Euro.nm, the European equity growth market. A fourth market, Marché Libre, is nonregulated, administered by Euronext Paris for transactions in securities not listed on the other three markets.

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 percent 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, STOXX 50, Euro DJ STOXX.

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