Euronext Amsterdam
Established four centuries ago, the Amsterdam stock exchange is regarded as the oldest exchange in the world. Share trading originated in Amsterdam, where the ‘Verenigde Oostindische Compagnie’, a large shipping company, was in permanent need of funds to finance the shipping of goods from the Far East. The shares in this company were the first traded shares in the world, and at the start of the seventeenth century they were heavily traded on the Damrak, a street in Amsterdam located a stone’s throw from the Dutch exchange’s current premises at Beursplein 5. At first, only shares that could be delivered immediately were traded, but soon futures and options were being traded as well. Investors could buy early call and put options granting them the right to buy or sell shares in the future, for which they paid a premium.
The increasing trade in commodities and financial instruments led to a growing demand for a building to house the exchange. In 1607, the city council commissioned the architect Hendrick de Keyser to design a commodities exchange, which opened in 1611. Trading now had a proper home for the very first time. During the seventeenth century, the importance of the stock exchange grew steadily as more shares (including those of the West Indian Company founded in 1621) and bonds came on the market. By the end of the seventeenth century, the stock exchange had a permanent place at the heart of the financial sector. The first exchange building eventually fell into disrepair and was abandoned in 1835, after which trading took place at quite a few locations until the present building was opened in 1913.
The Amsterdam Stock Exchange Association (‘Vereniging voor de Effectenhandel’) was founded in 1851 to organise and regulate share trading in the Netherlands. Only members of this association were allowed to trade directly on the stock exchange. There was a definite need for a regulatory body, as more and more financial products were being traded on the markets at this time.
More than a century later, in 1978, the Amsterdam Stock Exchange Association launched the European Options Exchange, the first options exchange in Europe and only the second in the world. Today Amsterdam still maintains a strong presence in derivatives trading. The Amsterdam Stock Exchange Association and the European Options Exchange merged in 1997, after the stock exchange abandoned its membership structure. The new company, Amsterdam Exchanges, operated both the stock market and the derivatives market. Amsterdam Exchanges compiled the AEX index, a Dutch blue chip index, and adopted a one-stop shopping model, which included clearing and settlement services, a central securities depository and data services, to provide investors with a constant flow of high-level information.
In 2000, Amsterdam Exchanges merged with the Brussels and Paris exchanges to form Euronext N.V., the first pan-European exchange. The Euronext group expanded at the beginning of 2002 with the acquisition of LIFFE (London International Financial Futures and Options Exchange) and the merger with the Portuguese exchange BVLP (Bolsa de Valores de Lisboa e Porto). In 2007 the New York Stock Exchange (NYSE Group) and Euronext merge, creating the first truly global financial marketplace group.
