Risk management is key to the Euronext Securities operations and management decisions. We aim to manage risks and opportunities effectively and in line with laws and regulations.
Euronext Securities maintains a low risk profile. We preserve the basic objectives of operational and financial stability.
Risk and opportunity management play a key part in our day-to-day operations. We embed our risk management philosophy into our company culture.
Our risk and internal control system:
We have regulations in place to mitigate the risks inherent to our business.
These regulations describe the procedures governing the Centralised Securities Systems and the Securities Settlement Systems. Our rule books outline the detailed requirements for Central Securities Depositories (CSDs).
Our Business Continuity Plan (BCP) protects our services in the event that there is a risk to operations.
Our BCP is based on requirements of the Central Securities Depository Regulation (CSDR). We follow best practice for business continuity in our business and beyond.
The focus of our BCP is to ensure:
Our BCP is regularly reviewed and periodically tested. We run tests internally and with stakeholders. Stakeholders participating in these tests are market participants, relevant suppliers and national authorities.
Business Continuity is vital to protecting and sustaining Euronext Securities' reputation, efficiency, resilience and competitiveness.
CSDs, together with central counterparties (CCPs), are key to the settlement process. They maintain the post-trade infrastructures that safeguard financial markets, so market participants can be confident that securities transactions are executed properly and in a timely manner.
The Euronext Securities CSDs can process high transaction volumes easily and minimise the effects of market participant failures on the entire system. This allows participants to fulfil payment and settlement obligations on time, even in periods of market stress and high volatility.
CSDs are also an important part of the centralised securities systems through which participants report the securities holdings of investors. Our systems serve as an essential tool to control the integrity of an issue, ensuring that the correct number of securities is issued and keeping them safe. They thus play an important role in maintaining investor confidence.
CSDs have proven they are highly resilient in periods of market stress. This has been tested time and time again, for example during the 2008 financial crisis, and recently at the start of the 2020 COVID-19 pandemic.