Euronext has no plans to copy rivals with cloud computing deal

LONDON: Euronext will not mimic rivals by shifting critical services to outside cloud computers given regulatory concerns, the pan-European exchange’s chief executive Stephane Boujnah said.

London Stock Exchange Group, CME and Nasdaq have all announced partnerships with cloud computing giants like Alphabet, Amazon and Microsoft, with Deutsche Boerse joining them on Thursday in a “strategic partnership” with Google.

“One of the reasons why we are cautious about the use of data centres of Microsoft, Google and Amazon for critical parts of what we do is because our core supervisors and regulators are themselves very cautious,” Boujnah told Reuters on Thursday.

Euronext only uses a cloud provider for storing historical data, he said.

“When it comes to strategic applications such as real-time data and operations of the market, we do not want them to be stored and operated by the data centres of companies which have decision-making centres outside the EU, and physical infrastructure outside the EU,” Boujnah added.

Euronext said earlier on Thursday it has postponed until further notice a weekly report on positions held in its commodity derivatives, as disruption from a ransomware attack on financial data firm ION Group outside the bloc continued.

“We analyse very carefully the dependency on certain providers,” Boujnah said as Euronext reported full year earnings.

Earlier this week, the Bank for International Settlements said a “rethink” is needed on regulating how finance is becoming increasingly dependent on outside parties like cloud firms, which new EU rules will address.

Euronext reported record full-year 2022 revenue and income of 1.418 billion euros ($1.52 billion), up 9.3% on 2021 due to consolidating its acquisition of Borsa Italiana.

Adjusted earnings per share in 2022 was down 4.8% at 5.21 euros due to higher share count, and the company proposes to pay a dividend of 2.22 euros per share.

Euronext said it has increased its 2024 annual pre-tax savings related to integrating Borsa Italiana by 15 million euros to 115 million, with around 70 million of this achieved by the end of 2023 as implementation costs remain unchanged.

The savings are nearly double what was promised at the deal’s outset.

“This further demonstrates Euronext’s successful track record in integrating acquired companies,” Boujnah said.