Ladies and gentlemen,
Welcome to our New Year's reception to mark the beginning of this historic year. Historic, because after a successful introduction at the exchange and in the books of financial institutions in nineteen ninety-nine, the euro has now finally reached our pockets. From now on, the euro will be our currency instead of the guilder or the franc, a fact that will make us more aware than ever before that besides being Dutch or French or Belgian, we are also Europeans. As a result, European investors will increasingly want to put their money into European countries other than their own. Speaking for myself, I am extremely pleased that we decided, almost two years ago now, to merge with the Belgian and French exchanges to create Euronext. Since then, we have made huge efforts to make it easier for Europeans to invest outside their own countries, but we still have a great deal of work ahead of us. But before we discuss this, and before I look back on the developments that took place last year, I would like to give the floor to my colleague, Euronext's chairman and CEO, Mr Jean-François Théodore, who will address you in English. Jean-François, the floor is yours.
Jean-François Théodore
Thank you, George.
Ladies and gentlemen,
Last year, as we celebrated the beginning of the twenty-first century here together, Euronext was enjoying its first new year as a pan-European exchange. Today, we kick off our first full year as a listed company.
Two thousand and one was an eventful year, full of surprises - good ones and sometimes not so good. It was also a sad year for the United States and the rest of the world after the events of the eleventh of September.
With a large part of the Western world in a state of economic stagnation, equity markets had a particularly difficult time. But it was in these conditions that Euronext was able to test, and prove, the strength of its model. In spite of market conditions that scared off many investors, we finished the year with volumes that were in line with those of two thousand, which was already a record year.
Another significant achievement was the completion of Euronext's IPO in July, against the backdrop of an unfavourable and volatile market.
The summer months also brought Euronext one of its greatest opportunities, when LIFFE decided to seek a partner. Euronext, with the backing of its clients, shareholders and staff, rose to the challenge and was rewarded when the board of LIFFE unanimously recommended our offer to its shareholders.
Two thousand and one was also a year of expansion towards the south, when BVLP, the Portuguese exchange, chose to join Euronext after studying a number of possible alternatives.
But amid all the excitement and attention that we received, we must not forget the huge amount of work that was performed behind the scenes. We should remember that during our most visible operations, such as the acquisition of LIFFE, the merger with BVLP and the launch of NextTrack, Euronext staff were constantly working across national borders to forge a united and integrated team of world-class experts.
Every time I travelled to visit my colleagues last year, I could not fail to notice how Euronext staff from the different countries were getting to know and understand each other better, and were working together in increasing harmony.
One of our biggest achievements came in October, with the smooth migration of Euronext Amsterdam's cash market to the new single trading system. This completed the creation of Euronext's unified trading platform and was a significant step towards building a seamless, integrated trading and clearing system.
The next step will be the integration of our clearing platforms, a task that we will be focusing on in the coming year. This will again require major efforts from our internal teams and our members. But these efforts will be rewarded. We will soon be able to provide all our members with an integrated clearing platform based on Clearing 21 technology just as we provided them with a single trading system last year.
It is no coincidence that Euronext's pan-European identity was being forge while our continent was preparing to adopt a single currency. Just as the euro is the most concrete result of European integration, so is Euronext the most tangible result of the nascent single European financial market. And as the European Union comes closer together, the Euronext family will grow stronger, more united and more efficient every day. More challenges and hard work lie ahead of us this year, with all the rewards that come from living up to the objectives that we set ourselves. We know we can count on the same kind of support that you have always provided, and for this I want to thank you sincerely. But these challenges can wait until tomorrow morning. Tonight, I hope you will all enjoy yourselves with us.
I wish you and your families a Happy and Prosperous New Year, and will now hand over the floor to George Möller.
George Möller
Thank you Jean-François. I will now continue in Dutch.
After Jean-François' words, I would now like to speak about more local issues.
Euronext is known as a major integrated European exchange with global ambitions. But what advantages does this have for Dutch parties? Well, we believe that it is precisely these parties, who are largely dependent on the success of the Dutch market, who will benefit from our broader range of easier-to-trade products and our growing number of partnerships with financial institutions. Direct access to a large variety of products that can be traded successfully on international markets at local market prices make Dutch parties even more attractive to their customers.
The changes that have taken place in our organisation during the past year have affected all of us, there is no doubt about it, but our aim is to make yesterday's changes tomorrow's opportunities for you all.
There is one particular group that has our special attention. We have said that we want to offer a European concept not only to large multinationals but also to smaller companies. If we did not do this, a dangerous situation would be created, where the European capital market would be split down the middle, with an international market for blue chips and a separate, national market for listing and trading smaller securities. Would a small national exchange have survived? The answer is no because a small exchange would probably have had hardly any foreign links and would therefore only have attracted national investors. We firmly believe that this development would be disastrous for the future of smaller companies in the Netherlands. That is why we opted for a different course. Euronext is a European exchange which is open to all companies. This means large, medium-sized and small companies. Euronext's market is now far bigger than the Dutch market that Amsterdam Exchanges used to have. Of course the flip side of the coin is that we now have a lot more mid and small caps fighting for attention, so we then asked ourselves what we could do to improve the European concept for these smaller companies.
We provided the answer to this question at the end of last year when we launched the Next Economy and Next Prime segments specifically for medium-sized and small companies. In order to be included in these segments, companies have to meet certain requirements regarding the provision of additional information for investors, the publication of quarterly reports, the adoption of international accounting principles and so on, all of which are becoming increasingly accepted as the norm by international investors. If the smaller companies in these market segments improve the quality of their information flows, and do this in accordance with official Euronext guidelines, international investors will focus more attention on them. Membership of these segments represents more than a mark of quality, it is the way to achieve international standards and international recognition.
We want to take on this challenge together with the mid and small caps. A bigger market does not necessarily mean fewer customers, but it does mean a bigger challenge.
And we have proved in the past year that we are more than capable of meeting major challenges. We would therefore like to express our gratitude to our colleagues in the Netherlands for the enormous effort they put into ensuring the successful migration of our cash market's TSA system to NSC. This involved not only a technical migration but also a changeover to a new trading model, and this will eventually be followed by the migration to a single clearing platform. In 2002, many other challenges face us. We will continue with the migration from floor trading to screen trading for equity options, an enormous change that will affect us all.
Only when that process has been completed successfully will we be able to concentrate on integrating our entire market with the Euronext/Liffe Connect environment using our favoured market model. We created this market model by consolidating the experiences of all our market parties and converting them to facilities in a computerised trading environment. We call this OUR market model, with the emphasis not on market model, but on OUR. If we work together to take the necessary measures, we will be able to create Europe's largest options exchange, an ideal that was conceived 25 years ago.
2001 was an exceptional year. It was a year in which we were all reminded that prices do not only rise but can also fall. This is a statement that I made a year ago on this very spot. Volumes remained at a reasonable level, but private investors in particular were conspicuously absent for part of the year. It was a year of tragedies that struck close to home - first in Volendam and then later in New York. New York may seem far away but it was our industry that was attacked and our colleagues who were among the victims.
In spite of everything, we remain positive about the immediate future. We have all invested a lot in it and we sincerely believe that the decisions we have made during the past few years have laid a solid foundation. In the years to come, we will implement these decisions more fully so that you can be assured of many interesting new opportunities on Europe's largest exchange. And when new companies want a listing to attract new capital, we believe that our exchange in the heart of the euro zone will be their first choice.
Ladies and gentlemen, this will be another historic year, and not only because it is the year of the euro. It will also be a festive year as we celebrate the 400th anniversary of share trading in Amsterdam, which started with investors subscribing to shares in the Dutch East India Company.
So let me now propose a toast to each and every one of you, to a good business year, but most especially to your and your loved ones' very good health. Here's to a peaceful 2002!