Invest in the Eurozone banking sector at a fair price with Euronext's derivatives

Euronext offers to market participants the full spectrum of derivatives to trade the Eurozone banking sector at a fair price. Investors can trade future, option and dividend future contracts based on the Euronext Eurozone Banks Index which shows the performance of the largest companies of this sector in the Eurozone (Bloomberg code: EZBANK).

Trading the banking sector at a fair price

Euronext's derivatives offer strong competitive advantages:

• Fair cost structure taking into consideration the nominal value of the index
• High accessibility thanks to a low minimum sizes to facilitate off-screen transactions
• Higher nominal value to enable further economies at the clearing level
• On-screen liquidity provided by market makers committed to the development of a cost-efficient solution to trade the banking sector
• Off-screen liquidity offered by all the existing main counterparties

Market makers facilitating on-screen liquidity

Trading in Euronext Eurozone Banks Index Derivatives benefits from on-screen liquidity provided by market makers committed to ease the access to the banking sector.

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Euronext Eurozone Banks Index Derivatives vs competition*

*based on data publicly accessible on the competitor website.

Download factsheets

Euronext Eurozone Banks Index Future - Factsheet  Euronext Eurozone Banks Index Derivatives option - Factsheet  Euronext Eurozone Banks Index Derivatives dividend future - Factsheet

Publications about Euronext Banks Index Future

FOW - Global Investor Group (May 2021)

Euronext to offer cheaper access to banking sector through derivatives.

READ THE ARTICLE

Next Finance - interview in French (June 2021)

« Nous allons continuer notre développement avec d’autres produits dérivés sur l’indice Euronext Eurozone Banks »

READ THE ARTICLE

Best Execution - Summer edition (July 2021)

Charlotte Alliot, Head of Institutional Derivatives at Euronext spoke to Best Execution about trading the Eurozone banking sector using derivatives.

READ THE ARTICLE

Related news

Euronext launches new Eurozone Banks Dividend Index Future

Over the first half of the year, Euronext welcomed 41 new listings which raised a total of €3.3 billion.

Flagship new listings

Since the beginning of the year, we welcomed companies from all sectors on Euronext markets including some flagship brands: Industrie de Nora, Euroapi, Deezer, Var Energi, Azerion, Cabka and BenevolentAI.

Euronext’s secondary markets

We are proud to consolidate our leading position in Europe in primary equity listings, while on our secondary markets we executed €13.7 billion raised in secondary equity issues in H1 2022.

World leader for bonds listing

Euronext continues to be the leading listing venue for bonds worldwide, counting more than 52,500 bonds listed at 30 June 2022.

The Euronext Tech Leaders initiative

We also reinforced our offering for Tech companies with the launch of Euronext Tech Leaders, dedicated to high-growth and leading Tech companies. 

Euronext Tech Leaders is composed of 100+ high-growth and leading companies, each meeting a specific set of criteria to qualify. It complements Euronext's existing Tech offer and aims to strengthen the European Tech sector.

Across the primary markets, with our new Tech initiative and our world-leading position in debt listings, we are leading the way in supporting the leaders of tomorrow.

Visit Raise Capital

We want to provide our customers with the highest quality service, whether they interact with us in their local market or across multiple locations. That’s why one of Euronext Securities’ four strategic pillars is to strengthen and to enhance the international and local Customer Experience. And that’s the reason why, as we develop our pan-European CSD organisation, we focus so keenly on our customer relationships. In this article, we discuss how Euronext Securities will improve Customer Experience and what it will mean for our customers in the different markets.

“When we talk about Customer Experience, I think the most important thing to recognise is that having a customer-centric focus is nothing new for our CSDs,” Olga Jordão, CEO of Euronext Securities Porto and Head of CSD Client Services, explains.

“Each CSD has a long track record of working closely with their local, regional and international customers to meet their needs. However, now that we are a large, pan-European institution, we have the opportunity to bring an enhanced experience and a ‘One Euronext’ feel to our customers.” It is in this context that the fourth strategic pillar in Euronext Securities’, “Growth for Impact 2024 Strategy”, comes into play.

“The fourth pillar is about creating stronger ties with our customers, anticipating their needs and strengthening our existing relationships,” explains Mauro Dognini, CEO Euronext Securities Milan and Head of Sales & Relationship Management.

“For our customers, this will mean that they will continue to benefit from locally developed initiatives and services that cater to local and regional specificities. At the same time, they will benefit from new services, tested and proven in other Euronext CSDs, that can create even more value for their business.”

Three primary goals: improving efficiency, harmonisation and partnership

Over the next three years, Euronext Securities will introduce an array of Customer Experience initiatives, all centred around three primary objectives.

“First, we want to make it easier for our customers to interact with us,” says Mauro Dognini. “We’ll do this by improving our efficiency, simplifying our processes and reducing our response time.” The second objective targets customers that use Euronext Securities’ services in more than one CSD, and involves creating a more harmonised experience for them across all Euronext CSDs. “Finally, we want to develop stronger, long-term relationships with our customers. Leveraging data and advanced technology will help us in that respect,” he explains.

1. Improving efficiency by making it easier for customers to work with us.

One of the concrete initiatives designed to improve efficiency in Customer Experience is the introduction of a common customer relationship management (CRM) tool across all CSDs.

This tool will help customer-facing teams monitor day-to-day customer interactions and more quickly identify pain points and potential improvement areas. They can thus be more proactive and responsive to customer needs.

Another initiative, designed to improve response times, will focus on how queries are routed in the organisation, making sure they are directed to specialised areas and that each issue is tracked through to its resolution.

“Every day, we get a large number of queries across our CSDs, many of which relate to the same issue,” states Mauro Dognini. “By being able to identify those trends more quickly, we can use input from across the CSDs to come up with the best response for our customers, rather than developing individual solutions in isolation.”

2. Harmonising the Customer Experience providing a more flexible Customer Service model.

To create one harmonised Customer Experience across all Euronext CSDs, the second objective, Euronext Securities will build a flexible service model that allows customers to choose between a local, regional or global model. In this way, each customer can select the approach that best suits their business.

For example, at Euronext Securities Copenhagen customers can opt for retail segregated accounts, a local settlement platform for local banks, or a Directly Connected Participant (DCP) model for settlement in the T2S platform – an approach increasingly favoured by international financial institutions.

Corporate Actions (CA) is another area where the Euronext CSDs support both local and international models. Euronext Securities Oslo offers standard processing of CA payments for custodians servicing international clients, whereas local retail clients rely entirely on their CSD to process retail operations.

These examples show the importance of balancing harmonisation with local market specificities, as Mauro Dognini points out. “We are a network of CSDs, and at the same time each CSD plays a central role in its local market. That’s why we will work closely with our customers in each market to make sure we create models that work for everyone.”

3. Cementing the partnership mindset while strengthening our customer service culture.

The final objective is about cementing the partnership mindset in all corners of the Euronext Securities’ organisation.

“We want our customers to experience a more partnership-based approach from us in all the CSDs. And they should have this experience across the entire value chain, in all of their interactions with us,” states Olga Jordão. To meet this objective, Euronext Securities will introduce dedicated account and relationship managers in each CSD. “These managers will place us in a better position to support our customers’ growth. They will also give us a deeper understanding of our customers’ business, which will help us further improve the services we provide.”

The 2024 Customer Experience

Although the Growth for Impact 2024 Strategy spans the next three years, work on several initiatives is already well underway. “We expect to have the CRM tool fully implemented across all CSDs by the third quarter of this year. Initially, we'll be reaching out to our customers to share some of our learnings and observations with them and get their feedback. Over time, we plan on launching regular service reviews encompassing all aspects of our service and customer interactions,” states Olga Jordão.

When the full Growth for Impact Strategy is realised, local, regional and international customers alike should feel the positive impact of these initiatives. “Locally, our customers will feel that they have retained the flexibility and local understanding they would expect from their national CSD,” Mauro Dognini says. “Yet they will also see the benefits of working with a large, pan-European organisation, in that the service they receive is even more professional.”

For larger customers who do business with Euronext Securities in multiple markets, they will meet “One Euronext Securities”, regardless of where they access the organisation’s services. However, achieving this level of seamless harmonisation encompasses more than just the Customer Experience. “We have several initiatives underway to pave the way, including building common corporate actions and billing platforms to address the product side. All these common layers are key building blocks to creating the One Euronext of the future,” explains Olga Jordão.

“Our ultimate aim is that customers view us as a partner that helps them accomplish their business goals,” she concludes.

Customer case: Helping BancoBPM Group improve settlement efficiency

An experience from Euronext Securities Milan demonstrates how closer customer engagement can bring value to Euronext’s customers.

Euronext Securities Milan formed an Executive Account Management team in 2016 and implemented a common CRM tool across the Sales, Relationship Management and Customer Services teams. These teams could then share information and work together to identify new solutions for their customers.

Working together with BancoBPM Group, the teams created a new solution which allows the settlement flows coming from trading activities on Borsa Italiana by the group broker to be addressed and centralised directly to the customer’s securities account. According to Gianni Mazzocchi, Head of Finance Operations at BancoBPM, this solution allows the bank to “greatly simplify and optimise the entire end-to-end process for settling trading activities on Borsa Italiana. Trades will be settled in the appropriate securities accounts of BancoBPM without any realignment activities of positions. This will reduce risk and operating costs and significantly decrease settlement instructions.”

What is a market index and how can you invest in it?

Fabrice Rahmouni, Head of Indices at Euronext, explains what an index is, how indices are used and how to invest in them.

Listen to the full interview. Watch the video.

What is an index?

An index can be described as an indicator that tracks the performance of a basket of securities, derivatives, or other financial instruments. An index aims to represent and measure the performance of a specific market, an asset class, sector, or even an investment strategy. For instance, the CAC 40^® index is the barometer of the large capitalisation segment of the French market. 

How are indices used?

Indices serve as market indicators, and are often described as a barometer that reflects the economic health of the financial markets. Indices can be used as benchmarks to compare the performance of, for instance, a fund. They can also be used as the base (the underlying) for financial products like Exchange Traded Funds (ETFs) or Warrants and Certificates. They can also be used as tools to calculate financial metrics for research and analysis.

So, whether you are looking to track a particular theme, evaluate the performance of your portfolio, or invest directly in a product based on a specific index, indices are key financial tools. 

How to invest in an index?

An index is not a financial product that you can directly invest in. It cannot be bought or sold, like a stock. However, as mentioned above, there are solutions that allow you to replicate the performance of indices, such as exchange-traded funds (known as ETFs), warrants and certificates, or derivatives products like futures and options. 

Lets take ETFs as an example

An ETF is basically a fund that you can buy or sell like a stock on the exchange. ETFs can replicate and track the performance of an index, making them a very popular product among the investor community. ETFs offer exposure to a wide number of securities and markets, allowing you to diversify your portfolio. To learn more about ETFs, watch the Bid & Ask video 'What is an ETF?' by Silvia Bosoni, Group Head of ETFs at Euronext. 

Indices and ESG: a natural combination?

First, let's define ESG. It stands for Environmental, Social and Governance. 

• The 'E' part refers to the impact of the activities of a specific company on its direct, but also indirect environment. It measures the impact of climate change. carbon emissions, deforestation, water management, air and water pollution.
• The 'S' part is the impact of a company on its social ecosystem, for instance its capacity to onboard client engagement or even employee engagement, and more broadly to what extent it respects labour standards and human rights.
• The 'G' part includes all the best practices in terms of managing a company, such as diversity in the board of directors or policy in terms of compensation. 

ESG considerations

These ESG considerations are widely used by investor communities, both to identify companies at risk, but also to identify those companies that are making the best use of these new opportunities. ESG also encourages companies to be more accountable in their business activities and their impact on economies. 

Therefore, ESG indices, because they are composed of the most advanced companies following the ESG theme, help investors to directly identify companies that are leading the sustainable transition. 

Does Euronext create indices?

Euronext is a major index provider in Europe. We design, calculate and publish a wide range of indices for all types of sectors, geographies and thematics.

Euronext's national indices

Euronext is well known for its flagship national benchmark indices in Europe:  the CAC 40^® in France, AEX^® in the Netherlands, BEL 20^® in Belgium, OBX^® in Norway, PSI^® in Portugal and ISEQ 20^® in Ireland.

For decades, these indices have been considered as a reference for these local markets and as a consequence have been key to investment from both global and local market players. 

Euronext ESG indices

Euronext is also recognised for its engagement and offering in terms of ESG indices. Fifteen years ago we created the Low Carbon Europe 100 index, which today serves as underlying for one of the biggest ETFs in Europe. In 2021, we began to create sustainable versions of all our national blue-chip indices, starting with the CAC 40^® ESG, and including the MIB^® ESG in Italy. And of  course, Euronext continues to launch indices on new ESG-related topics, such as the new biodiversity and social indices launched just recently.

Euronext's expertise

Euronext has great expertise in creating customised solutions, with very quick time-to-market delivery for asset managers and pension funds to create structured products, ETFs, derivatives and more. As a recent example, in 2021 the German government called upon Euronext to create a World ESG index to help pension funds transition to sustainable investments.

This list is long, and Euronext will not stop here. 

What is an exchange and how can I invest on it?

Roland Prevot, Head of Retail Cash Equity at Euronext, explains what an exchange is, how to invest on-exchange and the advantages investing using the exchange brings, and why zero-commission investment is a myth.

Listen to the full interview. Watch the video.

What is an exchange?

An exchange is a marketplace where buyers and sellers come together to trade financial instruments.

Financial instruments include:

• Shares (a company’s capital)
• Bonds (a company’s debt)

There are also other products such as:

• Exchange-Traded Funds (ETFs), which are index funds that can be used to track indices such as the CAC 40
• Leveraged products, for example derivatives like options, and structured products (including warrants and turbos).

What is Euronext?

Euronext is a global stock exchange. We operate regulated markets in Paris, Amsterdam, Brussels, Lisbon, Dublin, Oslo and Milan.

How to invest on the exchange?

Investing on the exchange is simple. To invest on the exchange you need to ask your bank or broker to open a trading account or a stock savings plan. They may have direct access to the exchange or they may ask an intermediary to execute your stock exchange order on Euronext.

What are the benefits of investing on an exchange?

Liquidity

One of the main advantages of investing on the exchange compared to other methods is that the exchange market has the most liquidity. This means that it has more market participants, increasing your chances of being able to trade at the best price. This liquidity contributes to the quality of the market. 

Best execution

With Euronext you can also benefit from our best execution solution, called Best of Book. Best execution means that Euronext is the trading venue where you will have the best execution price.

Our 'Best of Book' service, designed for retail investors, delivers a real advantage to individual investors, allowing them to secure a better price than even a dedicated finance professional could achieve. 

Investing with zero commission: myth or reality?

Zero commission means investing using brokers with no brokerage fees.

Roland Prevot says that zero commission is a myth if you are looking for good execution quality.

The broker that sends your order to the exchange will aim to secure the best execution for you, and there will be a charge for that. With a "zero-cost" solution, not having to pay brokerage fees seems like an advantage, but ultimately, what you don't pay in brokerage fees, you will end up paying in the execution price. 

Final advice

Roland Prevot believes it is important to choose your broker carefully. Instead of focusing on brokerage fees, look at the terms offered by your broker before opening an account.