## What actually drives a stock price up ou down?

Clash Royale CLAN TAG#URR8PPP

Can someone please explain to me how stock prices go up and down? What are the underlying physical and information technology phenomena and algorithms that drive a stock up or down? Books just say that a stock price reflects what their owners think the stock is worth and not what it is actually worth.

• Seeing as this is quant.se and money.se, can it be assumed that you aren’t just asking where the price is decided, but you’re asking for a deeper explanation of why people do the things that move the price?
– immibis
Dec 17 at 23:18

• I’m puzzled by what you mean by “information technology phenomena and algorithms” affecting a stock’s price. Perhaps you’re asking about how algorithm trading affects stock prices, or perhaps you’re asking what criterion it uses to make buy/sell decisions. The latter is probably all proprietary voodoo that nobody is allowed to talk about.
– James K Polk
Dec 18 at 0:58

Can someone please explain to me how stock prices go up and down? What are the underlying physical and information technology phenomena and algorithms that drive a stock up or down? Books just say that a stock price reflects what their owners think the stock is worth and not what it is actually worth.

• Seeing as this is quant.se and money.se, can it be assumed that you aren’t just asking where the price is decided, but you’re asking for a deeper explanation of why people do the things that move the price?
– immibis
Dec 17 at 23:18

• I’m puzzled by what you mean by “information technology phenomena and algorithms” affecting a stock’s price. Perhaps you’re asking about how algorithm trading affects stock prices, or perhaps you’re asking what criterion it uses to make buy/sell decisions. The latter is probably all proprietary voodoo that nobody is allowed to talk about.
– James K Polk
Dec 18 at 0:58

1

1

1

Can someone please explain to me how stock prices go up and down? What are the underlying physical and information technology phenomena and algorithms that drive a stock up or down? Books just say that a stock price reflects what their owners think the stock is worth and not what it is actually worth.

Can someone please explain to me how stock prices go up and down? What are the underlying physical and information technology phenomena and algorithms that drive a stock up or down? Books just say that a stock price reflects what their owners think the stock is worth and not what it is actually worth.

market-data market-microstructure market-making market financial-markets

edited Dec 17 at 22:33

Daneel Olivaw

2,8281529

2,8281529

Joselin Jocklingson

101

101

• Seeing as this is quant.se and money.se, can it be assumed that you aren’t just asking where the price is decided, but you’re asking for a deeper explanation of why people do the things that move the price?
– immibis
Dec 17 at 23:18

• I’m puzzled by what you mean by “information technology phenomena and algorithms” affecting a stock’s price. Perhaps you’re asking about how algorithm trading affects stock prices, or perhaps you’re asking what criterion it uses to make buy/sell decisions. The latter is probably all proprietary voodoo that nobody is allowed to talk about.
– James K Polk
Dec 18 at 0:58

• Seeing as this is quant.se and money.se, can it be assumed that you aren’t just asking where the price is decided, but you’re asking for a deeper explanation of why people do the things that move the price?
– immibis
Dec 17 at 23:18

• I’m puzzled by what you mean by “information technology phenomena and algorithms” affecting a stock’s price. Perhaps you’re asking about how algorithm trading affects stock prices, or perhaps you’re asking what criterion it uses to make buy/sell decisions. The latter is probably all proprietary voodoo that nobody is allowed to talk about.
– James K Polk
Dec 18 at 0:58

Seeing as this is quant.se and money.se, can it be assumed that you aren’t just asking where the price is decided, but you’re asking for a deeper explanation of why people do the things that move the price?
– immibis
Dec 17 at 23:18

Seeing as this is quant.se and money.se, can it be assumed that you aren’t just asking where the price is decided, but you’re asking for a deeper explanation of why people do the things that move the price?
– immibis
Dec 17 at 23:18

I’m puzzled by what you mean by “information technology phenomena and algorithms” affecting a stock’s price. Perhaps you’re asking about how algorithm trading affects stock prices, or perhaps you’re asking what criterion it uses to make buy/sell decisions. The latter is probably all proprietary voodoo that nobody is allowed to talk about.
– James K Polk
Dec 18 at 0:58

I’m puzzled by what you mean by “information technology phenomena and algorithms” affecting a stock’s price. Perhaps you’re asking about how algorithm trading affects stock prices, or perhaps you’re asking what criterion it uses to make buy/sell decisions. The latter is probably all proprietary voodoo that nobody is allowed to talk about.
– James K Polk
Dec 18 at 0:58

active

oldest

The short answer: many factors. The following are some key ones:

1. Reported Trades – Stocks are quoted “bid” and “ask” rates. These are the traders setting their prices much similar to a local farmers market trading their produce.
2. Volume – number of shares traded.
3. Price trend – When the bid volume is higher than the ask volume, the selling is stronger, and the price is more likely to move down than up. When the ask volume is higher than the bid volume, the buying is stronger, and the price is more likely to move up than down.
4. Institutional actions – Institutions account for most of the trading in larger stocks, so their action usually has the most influence on the stock price.

References:

2. https://money.stackexchange.com/questions/35686/how-is-stock-price-determined

Stocks are usually traded by (one or more) Market Maker(s), who stand ready to sell to you at a price $$s_a$$ or buy from you at a price $$s_b$$. Since $$s_a>s_b$$ they make a profit if the price does not change. However, they also own stock themselves (between the time you sell it to them and someone else buys it from them). They have to manage this “inventory” carefully.

If $$s_a,s_b$$ are too high (higher than the market consensus) they will find that a lot of people want to sell to them and no one want to buy. Their inventory will rapidly increase and they will be stuck with a lot of unsaleable stock. Vice versa if $$s_a,s_b$$ is too low, a lot of people want to buy no one wants to sell, their inventory will quickly go to zero and they will be out of business again.

As a result market makers are very sensitive to the balance of supply and demand from investors. They constantly adjust their prices, lowering it if it seems there is excess supply (more sellers than buyers) and raising it it if they see excess demand. Price will quickly adjust to the momentary supply/demand for the stock from investors.

The prices in other markets (food, housing) also adjusts to supply and demand, but not as quickly. It takes a long time for a food store to adjust its sales prices, and even longer for the seller of a house to adjust. With stocks the adjustment is nearly instantaneous (because many people can buy or sell the item instantly in a central two-way market).

• Thank you for your answer. However when you do online trading I do not recall seeing two prices as and sb. I recall seeing a single price plus transaction fees. How do you explain this conflict of data presentation between what you see online and your explanation?
– Joselin Jocklingson
Dec 19 at 16:19

• Actually, there are bid and ask rates I suppose, but when I studied mathematical finance and Brownian morons there was a single graph, with bid and ask rates coinciding. Why doesn’t my math book account for both and how do I adjust the theory to make it match.
– Joselin Jocklingson
Dec 19 at 16:27

That’s a most difficult question to answer as the famous quote says “in short run the markets are like voting machines”. What I have seen is most people try to correlate the stock price movement with the macro or micro events happening around. For instance, if the Indian indices fall then people start to relate it with a rise in crude prices or a rise in the current account deficit. However, on most days, I believe it is very difficult to give exact reasons for why a stock price is rising or falling.

In long run, the stock prices are weighing machines and the price will follow the earnings of the company. Therefore, you can determine a way in which you can identify fundamentally strong companies and invest in them and identify fundamentally weak companies and short them. You can employ quant techniques to find fundamentally strong and weak companies.

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oldest

The short answer: many factors. The following are some key ones:

1. Reported Trades – Stocks are quoted “bid” and “ask” rates. These are the traders setting their prices much similar to a local farmers market trading their produce.
2. Volume – number of shares traded.
3. Price trend – When the bid volume is higher than the ask volume, the selling is stronger, and the price is more likely to move down than up. When the ask volume is higher than the bid volume, the buying is stronger, and the price is more likely to move up than down.
4. Institutional actions – Institutions account for most of the trading in larger stocks, so their action usually has the most influence on the stock price.

References:

2. https://money.stackexchange.com/questions/35686/how-is-stock-price-determined

The short answer: many factors. The following are some key ones:

1. Reported Trades – Stocks are quoted “bid” and “ask” rates. These are the traders setting their prices much similar to a local farmers market trading their produce.
2. Volume – number of shares traded.
3. Price trend – When the bid volume is higher than the ask volume, the selling is stronger, and the price is more likely to move down than up. When the ask volume is higher than the bid volume, the buying is stronger, and the price is more likely to move up than down.
4. Institutional actions – Institutions account for most of the trading in larger stocks, so their action usually has the most influence on the stock price.

References:

2. https://money.stackexchange.com/questions/35686/how-is-stock-price-determined

3

3

The short answer: many factors. The following are some key ones:

1. Reported Trades – Stocks are quoted “bid” and “ask” rates. These are the traders setting their prices much similar to a local farmers market trading their produce.
2. Volume – number of shares traded.
3. Price trend – When the bid volume is higher than the ask volume, the selling is stronger, and the price is more likely to move down than up. When the ask volume is higher than the bid volume, the buying is stronger, and the price is more likely to move up than down.
4. Institutional actions – Institutions account for most of the trading in larger stocks, so their action usually has the most influence on the stock price.

References:

2. https://money.stackexchange.com/questions/35686/how-is-stock-price-determined

The short answer: many factors. The following are some key ones:

1. Reported Trades – Stocks are quoted “bid” and “ask” rates. These are the traders setting their prices much similar to a local farmers market trading their produce.
2. Volume – number of shares traded.
3. Price trend – When the bid volume is higher than the ask volume, the selling is stronger, and the price is more likely to move down than up. When the ask volume is higher than the bid volume, the buying is stronger, and the price is more likely to move up than down.
4. Institutional actions – Institutions account for most of the trading in larger stocks, so their action usually has the most influence on the stock price.

References:

2. https://money.stackexchange.com/questions/35686/how-is-stock-price-determined

Socratees Samipillai

1313

1313

Stocks are usually traded by (one or more) Market Maker(s), who stand ready to sell to you at a price $$s_a$$ or buy from you at a price $$s_b$$. Since $$s_a>s_b$$ they make a profit if the price does not change. However, they also own stock themselves (between the time you sell it to them and someone else buys it from them). They have to manage this “inventory” carefully.

If $$s_a,s_b$$ are too high (higher than the market consensus) they will find that a lot of people want to sell to them and no one want to buy. Their inventory will rapidly increase and they will be stuck with a lot of unsaleable stock. Vice versa if $$s_a,s_b$$ is too low, a lot of people want to buy no one wants to sell, their inventory will quickly go to zero and they will be out of business again.

As a result market makers are very sensitive to the balance of supply and demand from investors. They constantly adjust their prices, lowering it if it seems there is excess supply (more sellers than buyers) and raising it it if they see excess demand. Price will quickly adjust to the momentary supply/demand for the stock from investors.

The prices in other markets (food, housing) also adjusts to supply and demand, but not as quickly. It takes a long time for a food store to adjust its sales prices, and even longer for the seller of a house to adjust. With stocks the adjustment is nearly instantaneous (because many people can buy or sell the item instantly in a central two-way market).

• Thank you for your answer. However when you do online trading I do not recall seeing two prices as and sb. I recall seeing a single price plus transaction fees. How do you explain this conflict of data presentation between what you see online and your explanation?
– Joselin Jocklingson
Dec 19 at 16:19

• Actually, there are bid and ask rates I suppose, but when I studied mathematical finance and Brownian morons there was a single graph, with bid and ask rates coinciding. Why doesn’t my math book account for both and how do I adjust the theory to make it match.
– Joselin Jocklingson
Dec 19 at 16:27

Stocks are usually traded by (one or more) Market Maker(s), who stand ready to sell to you at a price $$s_a$$ or buy from you at a price $$s_b$$. Since $$s_a>s_b$$ they make a profit if the price does not change. However, they also own stock themselves (between the time you sell it to them and someone else buys it from them). They have to manage this “inventory” carefully.

If $$s_a,s_b$$ are too high (higher than the market consensus) they will find that a lot of people want to sell to them and no one want to buy. Their inventory will rapidly increase and they will be stuck with a lot of unsaleable stock. Vice versa if $$s_a,s_b$$ is too low, a lot of people want to buy no one wants to sell, their inventory will quickly go to zero and they will be out of business again.

As a result market makers are very sensitive to the balance of supply and demand from investors. They constantly adjust their prices, lowering it if it seems there is excess supply (more sellers than buyers) and raising it it if they see excess demand. Price will quickly adjust to the momentary supply/demand for the stock from investors.

The prices in other markets (food, housing) also adjusts to supply and demand, but not as quickly. It takes a long time for a food store to adjust its sales prices, and even longer for the seller of a house to adjust. With stocks the adjustment is nearly instantaneous (because many people can buy or sell the item instantly in a central two-way market).

• Thank you for your answer. However when you do online trading I do not recall seeing two prices as and sb. I recall seeing a single price plus transaction fees. How do you explain this conflict of data presentation between what you see online and your explanation?
– Joselin Jocklingson
Dec 19 at 16:19

• Actually, there are bid and ask rates I suppose, but when I studied mathematical finance and Brownian morons there was a single graph, with bid and ask rates coinciding. Why doesn’t my math book account for both and how do I adjust the theory to make it match.
– Joselin Jocklingson
Dec 19 at 16:27

1

1

Stocks are usually traded by (one or more) Market Maker(s), who stand ready to sell to you at a price $$s_a$$ or buy from you at a price $$s_b$$. Since $$s_a>s_b$$ they make a profit if the price does not change. However, they also own stock themselves (between the time you sell it to them and someone else buys it from them). They have to manage this “inventory” carefully.

If $$s_a,s_b$$ are too high (higher than the market consensus) they will find that a lot of people want to sell to them and no one want to buy. Their inventory will rapidly increase and they will be stuck with a lot of unsaleable stock. Vice versa if $$s_a,s_b$$ is too low, a lot of people want to buy no one wants to sell, their inventory will quickly go to zero and they will be out of business again.

As a result market makers are very sensitive to the balance of supply and demand from investors. They constantly adjust their prices, lowering it if it seems there is excess supply (more sellers than buyers) and raising it it if they see excess demand. Price will quickly adjust to the momentary supply/demand for the stock from investors.

The prices in other markets (food, housing) also adjusts to supply and demand, but not as quickly. It takes a long time for a food store to adjust its sales prices, and even longer for the seller of a house to adjust. With stocks the adjustment is nearly instantaneous (because many people can buy or sell the item instantly in a central two-way market).

Stocks are usually traded by (one or more) Market Maker(s), who stand ready to sell to you at a price $$s_a$$ or buy from you at a price $$s_b$$. Since $$s_a>s_b$$ they make a profit if the price does not change. However, they also own stock themselves (between the time you sell it to them and someone else buys it from them). They have to manage this “inventory” carefully.

If $$s_a,s_b$$ are too high (higher than the market consensus) they will find that a lot of people want to sell to them and no one want to buy. Their inventory will rapidly increase and they will be stuck with a lot of unsaleable stock. Vice versa if $$s_a,s_b$$ is too low, a lot of people want to buy no one wants to sell, their inventory will quickly go to zero and they will be out of business again.

As a result market makers are very sensitive to the balance of supply and demand from investors. They constantly adjust their prices, lowering it if it seems there is excess supply (more sellers than buyers) and raising it it if they see excess demand. Price will quickly adjust to the momentary supply/demand for the stock from investors.

The prices in other markets (food, housing) also adjusts to supply and demand, but not as quickly. It takes a long time for a food store to adjust its sales prices, and even longer for the seller of a house to adjust. With stocks the adjustment is nearly instantaneous (because many people can buy or sell the item instantly in a central two-way market).

edited Dec 17 at 22:14

Alex C

5,7611922

5,7611922

• Thank you for your answer. However when you do online trading I do not recall seeing two prices as and sb. I recall seeing a single price plus transaction fees. How do you explain this conflict of data presentation between what you see online and your explanation?
– Joselin Jocklingson
Dec 19 at 16:19

• Actually, there are bid and ask rates I suppose, but when I studied mathematical finance and Brownian morons there was a single graph, with bid and ask rates coinciding. Why doesn’t my math book account for both and how do I adjust the theory to make it match.
– Joselin Jocklingson
Dec 19 at 16:27

• Thank you for your answer. However when you do online trading I do not recall seeing two prices as and sb. I recall seeing a single price plus transaction fees. How do you explain this conflict of data presentation between what you see online and your explanation?
– Joselin Jocklingson
Dec 19 at 16:19

• Actually, there are bid and ask rates I suppose, but when I studied mathematical finance and Brownian morons there was a single graph, with bid and ask rates coinciding. Why doesn’t my math book account for both and how do I adjust the theory to make it match.
– Joselin Jocklingson
Dec 19 at 16:27

Thank you for your answer. However when you do online trading I do not recall seeing two prices as and sb. I recall seeing a single price plus transaction fees. How do you explain this conflict of data presentation between what you see online and your explanation?
– Joselin Jocklingson
Dec 19 at 16:19

Thank you for your answer. However when you do online trading I do not recall seeing two prices as and sb. I recall seeing a single price plus transaction fees. How do you explain this conflict of data presentation between what you see online and your explanation?
– Joselin Jocklingson
Dec 19 at 16:19

Actually, there are bid and ask rates I suppose, but when I studied mathematical finance and Brownian morons there was a single graph, with bid and ask rates coinciding. Why doesn’t my math book account for both and how do I adjust the theory to make it match.
– Joselin Jocklingson
Dec 19 at 16:27

Actually, there are bid and ask rates I suppose, but when I studied mathematical finance and Brownian morons there was a single graph, with bid and ask rates coinciding. Why doesn’t my math book account for both and how do I adjust the theory to make it match.
– Joselin Jocklingson
Dec 19 at 16:27

That’s a most difficult question to answer as the famous quote says “in short run the markets are like voting machines”. What I have seen is most people try to correlate the stock price movement with the macro or micro events happening around. For instance, if the Indian indices fall then people start to relate it with a rise in crude prices or a rise in the current account deficit. However, on most days, I believe it is very difficult to give exact reasons for why a stock price is rising or falling.

In long run, the stock prices are weighing machines and the price will follow the earnings of the company. Therefore, you can determine a way in which you can identify fundamentally strong companies and invest in them and identify fundamentally weak companies and short them. You can employ quant techniques to find fundamentally strong and weak companies.

That’s a most difficult question to answer as the famous quote says “in short run the markets are like voting machines”. What I have seen is most people try to correlate the stock price movement with the macro or micro events happening around. For instance, if the Indian indices fall then people start to relate it with a rise in crude prices or a rise in the current account deficit. However, on most days, I believe it is very difficult to give exact reasons for why a stock price is rising or falling.

In long run, the stock prices are weighing machines and the price will follow the earnings of the company. Therefore, you can determine a way in which you can identify fundamentally strong companies and invest in them and identify fundamentally weak companies and short them. You can employ quant techniques to find fundamentally strong and weak companies.

0

0

That’s a most difficult question to answer as the famous quote says “in short run the markets are like voting machines”. What I have seen is most people try to correlate the stock price movement with the macro or micro events happening around. For instance, if the Indian indices fall then people start to relate it with a rise in crude prices or a rise in the current account deficit. However, on most days, I believe it is very difficult to give exact reasons for why a stock price is rising or falling.

In long run, the stock prices are weighing machines and the price will follow the earnings of the company. Therefore, you can determine a way in which you can identify fundamentally strong companies and invest in them and identify fundamentally weak companies and short them. You can employ quant techniques to find fundamentally strong and weak companies.

That’s a most difficult question to answer as the famous quote says “in short run the markets are like voting machines”. What I have seen is most people try to correlate the stock price movement with the macro or micro events happening around. For instance, if the Indian indices fall then people start to relate it with a rise in crude prices or a rise in the current account deficit. However, on most days, I believe it is very difficult to give exact reasons for why a stock price is rising or falling.

In long run, the stock prices are weighing machines and the price will follow the earnings of the company. Therefore, you can determine a way in which you can identify fundamentally strong companies and invest in them and identify fundamentally weak companies and short them. You can employ quant techniques to find fundamentally strong and weak companies.

Ishan Shah

9

9

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## Market value

Market value or OMV (Open Market Valuation) is the price at which an asset would trade in a competitive auction setting. Market value is often used interchangeably with open market value, fair value or fair market value, although these terms have distinct definitions in different standards, and may or may not differ in some circumstances.

## Contents

• 1 Definition
• 2 Real estate

• 2.1 Other definitions

• 2.1.1 Liquidation value
• 2.1.2 Orderly liquidation value
• 2.1.3 Federal land acquisition
• 2.1.4 Going concern value
• 2.1.5 Use value
• 3 Economic value and Investor confidence
• 4 Legal Interpretation
• 5 References

## Definition

International Valuation Standards defines market value as “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion”.[1]

Market value is a concept distinct from market price, which is “the price at which one can transact”, while market value is “the true underlying value” according to theoretical standards. The concept is most commonly invoked in inefficient markets or disequilibrium situations where prevailing market prices are not reflective of true underlying market value. For market price to equal market value, the market must be informationally efficient and rational expectations must prevail.

Recently, Mocciaro Li Destri, Picone & Minà (2012)[2] have underscored the subtle but important difference between the firms’ capacity to create value through correct operational choices and valid strategies, on the one hand, and the epiphenomenal manifestation of variations in stockholder value on the financial markets (notably on stock markets). In this perspective, they suggest to implement new methodologies able to bring strategy back into financial performance measures.

Market value is also distinct from fair value in that fair value depends on the parties involved, while market value does not. For example, IVS currently notes fair value “requires the assessment of the price that is fair between two specific parties taking into account the respective advantages or disadvantages that each will gain from the transaction. Although market value may meet these criteria, this is not necessarily always the case. Fair value is frequently used when undertaking due diligence in corporate transactions, where particular synergies between the two parties may mean that the price that is fair between them is higher than the price that might be obtainable in the wider market. In other words “special value” may be generated. Market value requires this element of “special value” to be disregarded, but it forms part of the assessment of fair value.[3]

## Real estate

The term is commonly used in real estate appraisal, since real estate markets are generally considered both informationally and transactionally inefficient. Also, real estate markets are subject to prolonged periods of disequilibrium, such as in contamination situations or other market disruptions.[citation needed]

Appraisals are usually performed under some set of assumptions about transactional markets, and those assumptions are captured in the definition of value used for the appraisal. Commonly, the definition set forth for U.S. federally regulated lending institutions is used, although other definitions may also be used under some circumstances:[4]

“The most probable price (in terms of money) which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: the buyer and seller are typically motivated; both parties are well informed or well advised, and acting in what they consider their best interests; a reasonable time is allowed for exposure in the open market; payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; and the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.”

In the USA, Licensed or Certified Apppraisers may be required under state, federal, or local laws to develop appraisals subject to USPAP Uniform Standards of Professional Appraisal Practice. The Uniform Standards of Professional Appraisal Practice requires that when market value is the applicable definition, the appraisal must also contain an analysis of the highest and best use as well as an estimation of exposure time. All states require mandatory licensure of appraisers.

It is important to note that USPAP does not require that all real estate appraisals be performed based on a single definition of market value. Indeed, there are frequent situations when appraisers are called upon to appraise properties using other value definitions. If a value other than market value is appropriate, USPAP only requires that the appraiser provide both the definition of value being used and the citation for that definition.

### Other definitions

Market value is the most commonly used type of value in real estate appraisal in the United States because it is required for all federally regulated mortgage transactions, and because it has been accepted by US courts as valid. However, real estate appraisers use many other definitions of value in other situations.[5]

#### Liquidation value

Liquidation value is the most probable price that a specified interest in real property is likely to bring under all of the following conditions:

1. Consummation of a sale will occur within a severely limited future marketing period specified by the client.
2. The actual market conditions currently prevailing are those to which the appraise property interest is subject.
3. The buyer is acting prudently and knowledgeably.
4. The seller is under extreme compulsion to sell.
5. The buyer is typically motivated.
6. The buyer is acting in what he or she considered his or her best interest.
7. A limited marketing effort and time will be allowed for the completion of the sale.
8. Payment will be made in cash in U.S. dollars or in terms of financial arrangements comparable thereto.
9. The price represents the normal consideration for the property sold, unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.

#### Orderly liquidation value

This value definition differs from the previous one in that it assumes an orderly transition, and not “extreme compulsion”.[6]

#### Federal land acquisition

For land acquisitions by or funded by U.S. federal agencies, a slightly different definition applies:[7]

“Fair market value is defined as the amount in cash or terms reasonably equivalent to cash, for which in all probability the property would be sold by a knowledgeable owner willing but not obligated to sell to a knowledgeable purchaser who desired but is not obligated to buy. In ascertaining that figure, consideration should be given to all matters that might be brought forward and reasonably be given substantial weight in bargaining by persons of ordinary prudence, but no consideration whatever should be given to matters not affecting market value.”

#### Going concern value

When a real estate appraiser works with a business valuation appraiser (and perhaps an equipment and machinery appraiser)[8] to provide a value of the combination of a business and the real estate used for that business, the specific market value is called “going concern value”. It recognizes that the combined market value may be different from the sum of the separate values: “The market value of all the tangible and intangible assets of an established operating business with an indefinite life, as if sold in aggregate.”[9]

#### Use value

Use value takes into account a specific use for the subject property and does not attempt to ascertain the highest and best use of the real estate. For example, the appraisal may focus on the contributory value of the real estate to a business enterprise.

Some property tax jurisdictions allow agricultural use appraisals for farmland. Also, current IRS estate tax regulations allow land under an interim agricultural use to be valued according to its current use regardless of development potential.[10]

## Economic value and Investor confidence

Stability and economic growth are two factors that international investors are seeking when considering investment options. A country offering economic value amongst its other incentives attracts investment funds. A political unrest situation can be the cause of not only loss of confidence, but a reduced value in currency, creating transfer of capital to other and more stable sources.

In the event of a government printing currency to discharge a portion of a significant amount of debt, the supply of money is increased, with an ultimate reduction in its value, aggravated by inflation. Furthermore, should a government be unable to service its deficit by way of selling domestic bonds, thereby increasing the supply of money, it must increase the volume of saleable securities to foreigners, which in turn creates a decrease in their value.

A significant debt can prove a concern for foreign investors, should they believe there is a risk of the country defaulting on its obligations. They will be reluctant to purchase securities subject to that particular currency, if there is a perceived, significant risk of default. It is for this reason that the debt rating of a country; for example,[11] as determined by Moody’s or Standard & Poor’s is a crucial indicator of its exchange rate.

Currency values and exchange rates play a crucial part in the rate of return on investments. Value for an investor, is the exchange rate of the currency which, contains the bulk of a portfolio, determining its real return. A declining value in the exchange rate has the effect of decreasing the purchasing power of income and capital gains, derived from any returns. In addition, other income factors such as interest rates, inflation and even capital gains from domestic securities, are influenced by the influential and complex factors, of the exchange rate.

## Legal Interpretation

The case of Luxmoore-May and Another v. Messenger May Baverstock [1990] 1 W.L.R. 1009 shows us the legal interpretation of market value: “The measure of damage in this case is, I conclude, the difference between what the foxhounds in fact realised consequent on the defendants’ breach of contract and what was their true open market value at that time. What better guide could there be to that value than the price at which these paintings happened to be knocked down at Sotheby’s so shortly afterwards? The price which the international art market was willing to pay was surely prima facie the best evidence of the foxhounds’ value.” Also the equilibrium of the qualibrium is hard to distinguish between.

## References

1. ^ IVS 1 – Market Value Basis of Valuation, Seventh Edition
2. ^ Mocciaro Li Destri A., Picone P. M. & Minà A. (2012), Bringing Strategy Back into Financial Systems of Performance Measurement: Integrating EVA and PBC, Business System Review, Vol 1., Issue 1. pp.85-102 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2154117.
3. ^ “Exposure Draft of Proposed Revised International Valuation Standard 2 – Bases Other than Market Value, June, 2006” (PDF). Archived from the original (PDF) on 21 June 2007. Retrieved 6 January 2018..mw-parser-output cite.citation{font-style:inherit}.mw-parser-output q{quotes:”””””””‘””‘”}.mw-parser-output code.cs1-code{color:inherit;background:inherit;border:inherit;padding:inherit}.mw-parser-output .cs1-lock-free a{background:url(“//upload.wikimedia.org/wikipedia/commons/thumb/6/65/Lock-green.svg/9px-Lock-green.svg.png”)no-repeat;background-position:right .1em center}.mw-parser-output .cs1-lock-limited a,.mw-parser-output .cs1-lock-registration a{background:url(“//upload.wikimedia.org/wikipedia/commons/thumb/d/d6/Lock-gray-alt-2.svg/9px-Lock-gray-alt-2.svg.png”)no-repeat;background-position:right .1em center}.mw-parser-output .cs1-lock-subscription a{background:url(“//upload.wikimedia.org/wikipedia/commons/thumb/a/aa/Lock-red-alt-2.svg/9px-Lock-red-alt-2.svg.png”)no-repeat;background-position:right .1em center}.mw-parser-output .cs1-subscription,.mw-parser-output .cs1-registration{color:#555}.mw-parser-output .cs1-subscription span,.mw-parser-output .cs1-registration span{border-bottom:1px dotted;cursor:help}.mw-parser-output .cs1-hidden-error{display:none;font-size:100%}.mw-parser-output .cs1-visible-error{font-size:100%}.mw-parser-output .cs1-subscription,.mw-parser-output .cs1-registration,.mw-parser-output .cs1-format{font-size:95%}.mw-parser-output .cs1-kern-left,.mw-parser-output .cs1-kern-wl-left{padding-left:0.2em}.mw-parser-output .cs1-kern-right,.mw-parser-output .cs1-kern-wl-right{padding-right:0.2em}
4. ^ Federal Register Vol. 55, No. 163, August 22, 1990. This definition has also been adopted by the International Association of Assessing Officials for tax assessment purposes.
5. ^ Dictionary of Real Estate Appraisal, 4th ed. (Chicago: Appraisal Institute, 2002)
6. ^ Valuing Machinery and Equipment: The Fundamentals of Appraising Machinery and Technical Assets, 2nd ed., (American Society of Appraisers, 2005)
7. ^ Uniform Standards for Federal Land Acquisition
8. ^ “Error404”. www.appraisers.org. Retrieved 6 January 2018.
9. ^ The Appraisal of Real Estate, 12th ed., (Chicago: The Appraisal Institute, 2001)
10. ^ Timberland Appraisal Timberland Appraisal
11. ^ “Credit Ratings”. Standardandpoors. Retrieved 6 January 2015.
• International Association of CPAs, Attorneys, and Management (IACAM) (Free Business Valuation E-Book Guidebook)

A market basket or commodity bundle is a fixed list of items, in given proportions, used specifically to track the progress of inflation in an economy or specific market.

## Contents

• 4 References

The most common type of market basket is the basket of consumer goods used to define the Consumer Price Index (CPI). It is a sample of goods and services, offered at the consumer market.

In the United States, the sample is determined by Consumer Expenditure Surveys conducted by the Bureau of Labor Statistics[1]. The price collection is conducted by data collectors on a monthly basis, and is processed further by commodity specialists[2].

Examples of categories included in the basket are[3]:

• Food and Beverages (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks)
• Housing (rent of primary residence, owners’ equivalent rent, fuel oil, bedroom furniture)
• Apparel (men’s shirts and sweaters, women’s dresses, jewelry)
• Transportation (new vehicles, airline fares, gasoline, motor vehicle insurance)
• Medical Care (prescription drugs and medical supplies, physicians’ services, eyeglasses and eye care, hospital services)
• Recreation (televisions, toys, pets and pet products, sports equipment, admissions)
• Education and Communication (college tuition, postage, telephone services, computer software and accessories)
• Other goods and Services (tobacco and smoking products, haircuts and other personal services, funeral expenses)

Other types of baskets are used to define the Producer Price Index (PPI), previously known as the Wholesale Price Index (WPI), as well as various commodity price indices.

• Market basket analysis – a distinct concept in data mining involving the analysis of items frequently purchased together.

## References

• DM Review article on Market basket analysis
Specific
1. ^ “How is the CPI market basket determined?”..mw-parser-output cite.citation{font-style:inherit}.mw-parser-output q{quotes:”””””””‘””‘”}.mw-parser-output code.cs1-code{color:inherit;background:inherit;border:inherit;padding:inherit}.mw-parser-output .cs1-lock-free a{background:url(“//upload.wikimedia.org/wikipedia/commons/thumb/6/65/Lock-green.svg/9px-Lock-green.svg.png”)no-repeat;background-position:right .1em center}.mw-parser-output .cs1-lock-limited a,.mw-parser-output .cs1-lock-registration a{background:url(“//upload.wikimedia.org/wikipedia/commons/thumb/d/d6/Lock-gray-alt-2.svg/9px-Lock-gray-alt-2.svg.png”)no-repeat;background-position:right .1em center}.mw-parser-output .cs1-lock-subscription a{background:url(“//upload.wikimedia.org/wikipedia/commons/thumb/a/aa/Lock-red-alt-2.svg/9px-Lock-red-alt-2.svg.png”)no-repeat;background-position:right .1em center}.mw-parser-output .cs1-subscription,.mw-parser-output .cs1-registration{color:#555}.mw-parser-output .cs1-subscription span,.mw-parser-output .cs1-registration span{border-bottom:1px dotted;cursor:help}.mw-parser-output .cs1-hidden-error{display:none;font-size:100%}.mw-parser-output .cs1-visible-error{font-size:100%}.mw-parser-output .cs1-subscription,.mw-parser-output .cs1-registration,.mw-parser-output .cs1-format{font-size:95%}.mw-parser-output .cs1-kern-left,.mw-parser-output .cs1-kern-wl-left{padding-left:0.2em}.mw-parser-output .cs1-kern-right,.mw-parser-output .cs1-kern-wl-right{padding-right:0.2em}
2. ^ “How are CPI prices collected and reviewed?”.
3. ^ “What goods and services does the CPI cover?”.

## Pension

A pension (/ˈpɛnʃən/, from Latin pensiō, “payment”) is a fund into which a sum of money is added during an employee’s employment years, and from which payments are drawn to support the person’s retirement from work in the form of periodic payments. A pension may be a “defined benefit plan” where a fixed sum is paid regularly to a person, or a “defined contribution plan” under which a fixed sum is invested and then becomes available at retirement age.[1] Pensions should not be confused with severance pay; the former is usually paid in regular installments for life after retirement, while the latter is typically paid as a fixed amount after involuntary termination of employment prior to retirement.

The terms “retirement plan” and “superannuation” tend to refer to a pension granted upon retirement of the individual.[2] Retirement plans may be set up by employers, insurance companies, the government or other institutions such as employer associations or trade unions. Called retirement plans in the United States, they are commonly known as pension schemes in the United Kingdom and Ireland and superannuation plans (or super[3]) in Australia and New Zealand. Retirement pensions are typically in the form of a guaranteed life annuity, thus insuring against the risk of longevity.

A pension created by an employer for the benefit of an employee is commonly referred to as an occupational or employer pension. Labor unions, the government, or other organizations may also fund pensions. Occupational pensions are a form of deferred compensation, usually advantageous to employee and employer for tax reasons. Many pensions also contain an additional insurance aspect, since they often will pay benefits to survivors or disabled beneficiaries. Other vehicles (certain lottery payouts, for example, or an annuity) may provide a similar stream of payments.

The common use of the term pension is to describe the payments a person receives upon retirement, usually under pre-determined legal or contractual terms. A recipient of a retirement pension is known as a pensioner or retiree.

## Contents

• 1 Types of pensions

• 1.1 Employment-based pensions
• 1.2 Social and state pensions
• 1.3 Disability pensions
• 2 Benefits

• 2.1 Defined benefit plans

• 2.1.1 Funding
• 2.1.2 Criticisms
• 2.1.3 Examples
• 2.2 Defined contribution plans

• 2.2.1 Examples
• 2.3 Hybrid and cash balance plans
• 2.4 Contrasting types of retirement plans
• 3 Financing
• 4 History

• 4.1 Germany
• 4.2 Ireland
• 4.3 United Kingdom
• 4.4 United States
• 5 Current challenges
• 6 Notable examples of pension systems by country
• 8 References

## Types of pensions

### Employment-based pensions

A retirement plan is an arrangement to provide people with an income during retirement when they are no longer earning a steady income from employment. Often retirement plans require both the employer and employee to contribute money to a fund during their employment in order to receive defined benefits upon retirement. It is a tax deferred savings vehicle that allows for the tax-free accumulation of a fund for later use as a retirement income. Funding can be provided in other ways, such as from labor unions, government agencies, or self-funded schemes. Pension plans are therefore a form of “deferred compensation”. A SSAS is a type of employment-based Pension in the UK.

Some countries also grant pensions to military veterans. Military pensions are overseen by the government; an example of a standing agency is the United States Department of Veterans Affairs. Ad hoc committees may also be formed to investigate specific tasks, such as the U.S. Commission on Veterans’ Pensions (commonly known as the “Bradley Commission”) in 1955–56. Pensions may extend past the death of the veteran himself, continuing to be paid to the widow; see, for example, the case of Esther Sumner Damon, who was the last surviving American Revolutionary War widow at her death in 1906.

In early 2017, the Wall Street Journal reported the percentage of American private-sector workers who have a traditional pension is 13%, down from 38% in 1979.[4]

### Social and state pensions

Many countries have created funds for their citizens and residents to provide income when they retire (or in some cases become disabled). Typically this requires payments throughout the citizen’s working life in order to qualify for benefits later on. A basic state pension is a “contribution based” benefit, and depends on an individual’s contribution history. For examples, see National Insurance in the UK, or Social Security in the United States of America.

Many countries have also put in place a “social pension”. These are regular, tax-funded non-contributory cash transfers paid to older people. Over 80 countries have social pensions.[5] Some are universal benefits, given to all older people regardless of income, assets or employment record. Examples of universal pensions include New Zealand Superannuation[6] and the Basic Retirement Pension of Mauritius.[7] Most social pensions, though, are means-tested, such as Supplemental Security Income in the United States of America or the “older person’s grant” in South Africa.[8]

### Disability pensions

Some pension plans will provide for members in the event they suffer a disability. This may take the form of early entry into a retirement plan for a disabled member below the normal retirement age.

## Benefits

Retirement plans may be classified as defined benefit or defined contribution according to how the benefits are determined.[9] A defined benefit plan guarantees a certain payout at retirement, according to a fixed formula which usually depends on the member’s salary and the number of years’ membership in the plan. A defined contribution plan will provide a payout at retirement that is dependent upon the amount of money contributed and the performance of the investment vehicles utilized. Hence, with a defined contribution plan the risk and responsibility lies with the employee that the funding will be sufficient through retirement, whereas with the defined benefit plan the risk and responsibility lies with the employer or plan managers.

Some types of retirement plans, such as cash balance plans, combine features of both defined benefit and defined contribution plans. They are often referred to as hybrid plans. Such plan designs have become increasingly popular in the US since the 1990s. Examples include Cash Balance and Pension Equity plans.

### Defined benefit plans

A traditional defined benefit (DB) plan is a plan in which the benefit on retirement is determined by a set formula, rather than depending on investment returns. Government pensions such as Social Security in the United States are a type of defined benefit pension plan. Traditionally, defined benefit plans for employers have been administered by institutions which exist specifically for that purpose, by large businesses, or, for government workers, by the government itself. A traditional form of defined benefit plan is the final salary plan, under which the pension paid is equal to the number of years worked, multiplied by the member’s salary at retirement, multiplied by a factor known as the accrual rate. The final accrued amount is available as a monthly pension or a lump sum, but usually monthly.

The benefit in a defined benefit pension plan is determined by a formula that can incorporate the employee’s pay, years of employment, age at retirement, and other factors. A simple example is a Dollars Times Service plan design that provides a certain amount per month based on the time an employee works for a company. For example, a plan offering $100 a month per year of service would provide$3,000 per month to a retiree with 30 years of service. While this type of plan is popular among unionized workers, Final Average Pay (FAP) remains the most common type of defined benefit plan offered in the United States. In FAP plans, the average salary over the final years of an employee’s career determines the benefit amount.

Averaging salary over a number of years means that the calculation is averaging different dollars. For example, if salary is averaged over five years, and retirement is in 2009, then salary in 2004 dollars is averaged with salary in 2005 dollars, etc., with 2004 dollars being worth more than the dollars of succeeding years. The pension is then paid in first year of retirement dollars, in this example 2009 dollars, with the lowest value of any dollars in the calculation. Thus inflation in the salary averaging years has a considerable impact on purchasing power and cost, both being reduced equally by inflation

This effect of inflation can be eliminated by converting salaries in the averaging years to first year of retirement dollars, and then averaging.

In the US, 26 U.S.C. § 414(j) specifies a defined benefit plan to be any pension plan that is not a defined contribution plan (see below) where a defined contribution plan is any plan with individual accounts. A traditional pension plan that defines a benefit for an employee upon that employee’s retirement is a defined benefit plan. In the U.S., corporate defined benefit plans, along with many other types of defined benefit plans, are governed by the Employee Retirement Income Security Act of 1974 (ERISA).[10]

In the United Kingdom, benefits are typically indexed for inflation (known as Retail Prices Index (RPI)) as required by law for registered pension plans.[11] Inflation during an employee’s retirement affects the purchasing power of the pension; the higher the inflation rate, the lower the purchasing power of a fixed annual pension. This effect can be mitigated by providing annual increases to the pension at the rate of inflation (usually capped, for instance at 5% in any given year). This method is advantageous for the employee since it stabilizes the purchasing power of pensions to some extent.

If the pension plan allows for early retirement, payments are often reduced to recognize that the retirees will receive the payouts for longer periods of time. In the United States, under the Employee Retirement Income Security Act of 1974, any reduction factor less than or equal to the actuarial early retirement reduction factor is acceptable.[12]

Many DB plans include early retirement provisions to encourage employees to retire early, before the attainment of normal retirement age (usually age 65). Companies would rather hire younger employees at lower wages. Some of those provisions come in the form of additional temporary or supplemental benefits, which are payable to a certain age, usually before attaining normal retirement age.[13]

#### Funding

Defined benefit plans may be either funded or unfunded.

In an unfunded defined benefit pension, no assets are set aside and the benefits are paid for by the employer or other pension sponsor as and when they are paid. Pension arrangements provided by the state in most countries in the world are unfunded, with benefits paid directly from current workers’ contributions and taxes. This method of financing is known as pay-as-you-go.[14] The social security systems of many European countries are unfunded,[15] having benefits paid directly out of current taxes and social security contributions, although several countries have hybrid systems which are partially funded. Spain set up the Social Security Reserve Fund and France set up the Pensions Reserve Fund; in Canada the wage-based retirement plan (CPP) is partially funded, with assets managed by the CPP Investment Board while the U.S. Social Security system is partially funded by investment in special U.S. Treasury Bonds.

In a funded plan, contributions from the employer, and sometimes also from plan members, are invested in a fund towards meeting the benefits. All plans must be funded in some way, even if they are pay-as-you-go, so this type of plan is more accurately known as pre-funded. The future returns on the investments, and the future benefits to be paid, are not known in advance, so there is no guarantee that a given level of contributions will be enough to meet the benefits. Typically, the contributions to be paid are regularly reviewed in a valuation of the plan’s assets and liabilities, carried out by an actuary to ensure that the pension fund will meet future payment obligations. This means that in a defined benefit pension, investment risk and investment rewards are typically assumed by the sponsor/employer and not by the individual. If a plan is not well-funded, the plan sponsor may not have the financial resources to continue funding the plan.

#### Criticisms

Traditional defined benefit plan designs (because of their typically flat accrual rate and the decreasing time for interest discounting as people get closer to retirement age) tend to exhibit a J-shaped accrual pattern of benefits, where the present value of benefits grows quite slowly early in an employee’s career and accelerates significantly in mid-career: in other words it costs more to fund the pension for older employees than for younger ones (an “age bias”). Defined benefit pensions tend to be less portable than defined contribution plans, even if the plan allows a lump sum cash benefit at termination. Most plans, however, pay their benefits as an annuity, so retirees do not bear the risk of low investment returns on contributions or of outliving their retirement income. The open-ended nature of these risks to the employer is the reason given by many employers for switching from defined benefit to defined contribution plans over recent years. The risks to the employer can sometimes be mitigated by discretionary elements in the benefit structure, for instance in the rate of increase granted on accrued pensions, both before and after retirement.

The age bias, reduced portability and open ended risk make defined benefit plans better suited to large employers with less mobile workforces, such as the public sector (which has open-ended support from taxpayers). This coupled with a lack of foresight on the employers part means a large proportion of the workforce are kept in the dark over future investment schemes.

Defined benefit plans are sometimes criticized as being paternalistic as they enable employers or plan trustees to make decisions about the type of benefits and family structures and lifestyles of their employees. However they are typically more valuable than defined contribution plans in most circumstances and for most employees (mainly because the employer tends to pay higher contributions than under defined contribution plans), so such criticism is rarely harsh.

The “cost” of a defined benefit plan is not easily calculated, and requires an actuary or actuarial software. However, even with the best of tools, the cost of a defined benefit plan will always be an estimate based on economic and financial assumptions. These assumptions include the average retirement age and lifespan of the employees, the returns to be earned by the pension plan’s investments and any additional taxes or levies, such as those required by the Pension Benefit Guaranty Corporation in the U.S. So, for this arrangement, the benefit is relatively secure but the contribution is uncertain even when estimated by a professional. This has serious cost considerations and risks for the employer offering a pension plan.

One of the growing concerns with defined benefit plans is that the level of future obligations will outpace the value of assets held by the plan. This “underfunding” dilemma can be faced by any type of defined benefit plan, private or public, but it is most acute in governmental and other public plans where political pressures and less rigorous accounting standards can result in excessive commitments to employees and retirees, but inadequate contributions. Many states and municipalities across the United States of America and Canada now face chronic pension crises.[1][16][17]

#### Examples

Many countries offer state-sponsored retirement benefits, beyond those provided by employers, which are funded by payroll or other taxes. In the United States, the Social Security system is similar in function to a defined benefit pension arrangement, albeit one that is constructed differently from a pension offered by a private employer; however, Social Security is distinct in that there is no legally guaranteed level of benefits derived from the amount paid into the program.

Individuals that have worked in the UK and have paid certain levels of national insurance deductions can expect an income from the state pension scheme after their normal retirement. The state pension is currently divided into two parts: the basic state pension, State Second [tier] Pension scheme called S2P. Individuals will qualify for the basic state pension if they have completed sufficient years contribution to their national insurance record. The S2P pension scheme is earnings related and depends on earnings in each year as to how much an individual can expect to receive. It is possible for an individual to forgo the S2P payment from the state, in lieu of a payment made to an appropriate pension scheme of their choice, during their working life. For more details see UK pension provision.

### Defined contribution plans

In a defined contribution plan, contributions are paid into an individual account for each member. The contributions are invested, for example in the stock market, and the returns on the investment (which may be positive or negative) are credited to the individual’s account. On retirement, the member’s account is used to provide retirement benefits, sometimes through the purchase of an annuity which then provides a regular income. Defined contribution plans have become widespread all over the world in recent years, and are now the dominant form of plan in the private sector in many countries. For example, the number of defined benefit plans in the US has been steadily declining, as more and more employers see pension contributions as a large expense avoidable by disbanding the defined benefit plan and instead offering a defined contribution plan.

Money contributed can either be from employee salary deferral or from employer contributions. The portability of defined contribution pensions is legally no different from the portability of defined benefit plans. However, because of the cost of administration and ease of determining the plan sponsor’s liability for defined contribution plans (you do not need to pay an actuary to calculate the lump sum equivalent that you do for defined benefit plans) in practice, defined contribution plans have become generally portable.

In a defined contribution plan, investment risk and investment rewards are assumed by each individual/employee/retiree and not by the sponsor/employer, and these risks may be substantial.[18] In addition, participants do not necessarily purchase annuities with their savings upon retirement, and bear the risk of outliving their assets. (In the United Kingdom, for instance, it is a legal requirement to use the bulk of the fund to purchase an annuity.)

The “cost” of a defined contribution plan is readily calculated, but the benefit from a defined contribution plan depends upon the account balance at the time an employee is looking to use the assets. So, for this arrangement, the contribution is known but the benefit is unknown (until calculated).

Despite the fact that the participant in a defined contribution plan typically has control over investment decisions, the plan sponsor retains a significant degree of fiduciary responsibility over investment of plan assets, including the selection of investment options and administrative providers.

A defined contribution plan typically involves a number of service providers, including in many cases:

• Trustee
• Custodian
• Recordkeeper
• Auditor
• Legal counsel[19]

#### Examples

In the United States, the legal definition of a defined contribution plan is a plan providing for an individual account for each participant, and for benefits based solely on the amount contributed to the account, plus or minus income, gains, expenses and losses allocated to the account (see 26 U.S.C. § 414(i)). Examples of defined contribution plans in the United States include individual retirement accounts (IRAs) and 401(k) plans. In such plans, the employee is responsible, to one degree or another, for selecting the types of investments toward which the funds in the retirement plan are allocated. This may range from choosing one of a small number of pre-determined mutual funds to selecting individual stocks or other securities. Most self-directed retirement plans are characterized by certain tax advantages, and some provide for a portion of the employee’s contributions to be matched by the employer. In exchange, the funds in such plans may not be withdrawn by the investor prior to reaching a certain age—typically the year the employee reaches 59.5 years old– (with a small number of exceptions) without incurring a substantial penalty.

## Notable examples of pension systems by country

Some of the listed systems might also be considered social insurance.

• Australia:
• Superannuation in Australia – Private, and compulsory, individual retirement contribution system.
• Social Security – Public pensions
• Old Age Security
• Quebec Pension Plan
• Registered Retirement Savings Plan
• Hong Kong – Mandatory Provident Fund
• Finland – Kansaneläkelaitos
• France:
• Pensions in France
• Allocation de Solidarité aux Personnes Agées
• Pensions Reserve Fund (France)
• India – Employees’ Provident Fund Organisation of India
• Japan – National Pension
• Malaysia – Employees Provident Fund
• Mexico – Mexico Pension Plan
• Netherlands – Algemene Ouderdomswet
• New Zealand
• New Zealand Superannuation – public pensions
• KiwiSaver – Private voluntary retirement contribution system
• Singapore – Central Provident Fund
• South Korea – National Pension Service
• Sweden – Social security in Sweden
• Switzerland Pension system in Switzerland
• United Kingdom:

• UK pension provision (generally)
• Self-invested personal pensions
• United States:
• Public employee pensions
• Retirement plans in the United States
• Social Security
• Vanuatu – Vanuatu National Provident Fund

• Elderly care
• Generational accounting
• Pension led funding
• Pension model
• Pensions crisis
• Public debt
• Retirement
• Retirement age
• Retirement planning
• Social pension

Specific:

• Bankruptcy code
• Ham and Eggs Movement, California pension proposal of the 1930s-40s
• Individual Pension Plan (IPP)
• Pension Rights Center
• Provident Fund
• Roth 401(k)
• Universities Superannuation Scheme

## References

1. ^ ab Thomas P. Lemke, Gerald T. Lins (2010). ERISA for Money Managers. Thomson Reuters. ISBN 9780314627056. Retrieved 11 October 2015..mw-parser-output cite.citation{font-style:inherit}.mw-parser-output q{quotes:”””””””‘””‘”}.mw-parser-output code.cs1-code{color:inherit;background:inherit;border:inherit;padding:inherit}.mw-parser-output .cs1-lock-free a{background:url(“//upload.wikimedia.org/wikipedia/commons/thumb/6/65/Lock-green.svg/9px-Lock-green.svg.png”)no-repeat;background-position:right .1em center}.mw-parser-output .cs1-lock-limited a,.mw-parser-output .cs1-lock-registration a{background:url(“//upload.wikimedia.org/wikipedia/commons/thumb/d/d6/Lock-gray-alt-2.svg/9px-Lock-gray-alt-2.svg.png”)no-repeat;background-position:right .1em center}.mw-parser-output .cs1-lock-subscription a{background:url(“//upload.wikimedia.org/wikipedia/commons/thumb/a/aa/Lock-red-alt-2.svg/9px-Lock-red-alt-2.svg.png”)no-repeat;background-position:right .1em center}.mw-parser-output .cs1-subscription,.mw-parser-output .cs1-registration{color:#555}.mw-parser-output .cs1-subscription span,.mw-parser-output .cs1-registration span{border-bottom:1px dotted;cursor:help}.mw-parser-output .cs1-hidden-error{display:none;font-size:100%}.mw-parser-output .cs1-visible-error{font-size:100%}.mw-parser-output .cs1-subscription,.mw-parser-output .cs1-registration,.mw-parser-output .cs1-format{font-size:95%}.mw-parser-output .cs1-kern-left,.mw-parser-output .cs1-kern-wl-left{padding-left:0.2em}.mw-parser-output .cs1-kern-right,.mw-parser-output .cs1-kern-wl-right{padding-right:0.2em}
2. ^ “WordNet Search – 3.1”. princeton.edu.
3. ^ “Industry SuperFunds – Home”. industrysuper.com. Retrieved 2010-09-17.
4. ^ Martin, Timothy W. (2017-01-02). “The Champions of the 401(k) Lament the Revolution They Started”. The Wall Street Journal. Retrieved 2017-01-03.
5. ^ “Country map”. pension-watch.net.
6. ^ webcoordinator@msd.govt.nz. “New Zealand Superannuation”. workandincome.govt.nz.
7. ^ Willmore, Larry (April 2003). “Universal Pensions in Mauritius”. SSRN 398280. Missing or empty |url= (help)
8. ^ “Old age pension”. GCIS. Retrieved 7 April 2013.
9. ^ “Private Pensions/Les pensions privées” (PDF). Retrieved 2010-09-17.
10. ^ Lemke and Lins, ERISA for Money Managers, §1:2 (Thomson West, 2013 ed.).
11. ^ “The Pensions Advisory Service”. The Pensions Advisory Service. Retrieved 2010-09-17.
12. ^ Foster, Ann C. “Early Retirement Provisions in Defined Benefit Pension Plans” (PDF). bls.gov.
13. ^ Shulman, Gary A. (1999). Qualified Domestic Relations Order Handbook. Aspen Publishers Online. pp. 199–200. ISBN 978-0-7355-0665-7.
14. ^ “Unfunded Pension Plans”. OECD Glossary of Statistical Terms. Retrieved 26 January 2009.
15. ^ “Falling Short” The Economist April 7, 2011. Retrieved 30 September 2012.
16. ^ Tufts, William; Fairbanks, Lee (2011), Pension Ponzi: How Public-sector Unions are Bankrupting Canada’s Health Care, Education and Your Retirement, Mississauga, Ontario: Wiley, p. 210, ISBN 978-1118098738
17. ^ Walsh, Mary (14 April 2018). “A $76,000 Monthly Pension: Why States and Cities Are Short on Cash”. New York Times. Retrieved 1 May 2018. Oregon — like many other states and cities, including New Jersey, Kentucky and Connecticut — is caught in a fiscal squeeze of its own making. Its economy is growing, but the cost of its state-run pension system is growing faster. 18. ^ Cannon, Edmund; Ian Tonks (2012). “The Value and Risk of Defined Contribution Pension Schemes: International Evidence”. Journal of Risk and Insurance. doi:10.1111/j.1539-6975.2011.01456.x. 19. ^ Lemke and Lins, ERISA for Money Managers §2:26 (Thomson West, 2013 ed.). 20. ^ IRS Announces 2015 Pension Plan Limitations; Taxpayers May Contribute up to$18,000 to their 401(k) plans in 2015
21. ^ Economic Policy Committee and the European Commission (2006). The impact of ageing on public expenditure. EU.
22. ^ Haberman, Steven (1995). History of Actuarial Science, vol. 1. London: William Pickering. pp. xlviii. ISBN 1-85196-160-7.
23. ^ Hald, A. (1990). A History of Probability and Statistics and Their Applications Before 1750. John Wiley and Sons. ISBN 978-0-471-50230-2.
24. ^ Gianasso, Alexandre. “A Brief History of Pensions”. Davidson Asset Management. Retrieved 29 June 2015.
25. ^ Lynn, Theodore G.; Clarke, Blanaid J. (19 August 2010). “The Irish Corporate Governance System”. doi:10.2139/ssrn.1661617. SSRN 1661617.
26. ^ “The Pensions Board Annual Report”. pensionsboard.ie. 2010. Archived from the original on 5 January 2012. Retrieved 15 December 2011.
27. ^ ab
Mercado, Darla (2012-04-19). “In apparent first, a public pension plan files for bankruptcy”. Pensions and Investments. Retrieved 2012-04-28.
28. ^ “Largest U.S. pension plans assets fall $217 billion short”. USA Today, citing a report by Watson Wyatt. 10 March 2009. ## Euronext Traded as Euronext: ENXCAC Mid 60 Component euronext.com Type Stock exchange Amsterdam, Netherlands October 27, 2000[1][2][3][4] Stéphane Boujnah[5](CEO Group and Chairman of the Managing Board) Anthony Attia[6][7](CEO Euronext Paris) Maurice van Tilburg[8][9](CEO Euronext Amsterdam) Vincent Van Dessel[10](CEO Euronext Brussels) Paulo Rodrigues Da Silva[11](CEO Euronext Lisbon and Interbolsa) Daryl Byrne[12](CEO Euronext Dublin) Euro 1,240 issuers (April 2018)[13] US$ 4.65 trillion (April 2018)[13] AEX indexBEL 20CAC 40ISEQ 20PSI 20Euronext 100Next 150 [fr] Euronext.com

Euronext is a European stock exchange seated in Amsterdam, Brussels, London, Lisbon, Dublin, and Paris.[14] In addition to cash and derivatives markets, the Euronext group provides listing market data, market solutions, custody and settlement services.[15] Its total product offering includes equities, exchange-traded funds, warrants and certificates, bonds, derivatives, commodities and indices as well as FX platform.

In 2018, Euronext is the largest in continental Europe with 1,300 issuers representing a €3.8 trillion market capitalization.[16] Euronext merged with NYSE Group, Inc. on April 4, 2007 to form NYSE Euronext (NYX). On November 13, 2013 Intercontinental Exchange (NYSE: ICE), completed acquisition of NYSE Euronext. In June 2014 Euronext completed an initial public offering making it a standalone company again.[17][18][19]

## Contents

• 1 History

• 1.1 Composition

• 1.1.1 Merger with NYSE
• 1.1.2 Attempted merger with Deutsche Börse
• 1.1.3 Acquisition by Intercontinental Exchange
• 1.1.4 Listing of Euronext and separation from ICE
• 1.2 Alternext
• 1.3 EnterNext
• 1.4 Cash markets
• 1.5 Derivative market
• 2 Structure and indices

• 2.1 Indices
• 2.2 Agreements and cooperation with other exchanges
• 2.3 Agreements and cooperation with partners
• 3 Market data
• 4 Exchange members
• 6 References

## History

### Composition

Logo used between 2000 and 2007

Euronext was formed on 22 September 2000 following a merger of the Amsterdam Stock Exchange,[20]Brussels Stock Exchange, and Paris Bourse, in order to take advantage of the harmonization of the financial markets of the European Union.[1][2][3][4] In December 2001, Euronext acquired the shares of the London International Financial Futures and Options Exchange (LIFFE), forming Euronext.LIFFE. In 2002 the group merged with the Portuguese stock exchange Bolsa de Valores de Lisboa e Porto (BVLP), renamed Euronext Lisbon.[3] In 2001, Euronext became a listed company itself after completing its Initial Public Offering.[21][22]

#### Merger with NYSE

Due to apparent moves by NASDAQ to acquire the London Stock Exchange,[23] NYSE Group, owner of the New York Stock Exchange, offered €8 billion (US$10.2b) in cash and shares for Euronext on 22 May 2006, outbidding a rival offer for the European Stock exchange operator from Deutsche Börse, the German stock market.[24] Contrary to statements that it would not raise its bid, on 23 May 2006, Deutsche Börse unveiled a merger bid for Euronext, valuing the pan-European exchange at €8.6 billion (US$11b), €600 million over NYSE Group’s initial bid.[25]
Despite this, NYSE Group and Euronext penned a merger agreement, subject to shareholder vote and regulatory approval. The initial regulatory response by SEC chief Christopher Cox (who was coordinating heavily with European counterparts) was positive, with an expected approval by the end of 2007.[26]
The new firm, tentatively dubbed NYSE Euronext, would be headquartered in New York City, with European operations and its trading platform run out of Paris. Then-NYSE CEO John Thain, who was to head NYSE Euronext, intended to use the combination to form the world’s first global stock market, with continuous trading of stocks and derivatives over a 21-hour time span. In addition, the two exchanges hoped to add Borsa Italiana (the Milan stock exchange) into the grouping.

Deutsche Börse dropped out of the bidding for Euronext on 15 November 2006, removing the last major hurdle for the NYSE Euronext transaction. A run-up of NYSE Group’s stock price in late 2006 made the offering far more attractive to Euronext’s shareholders.[27]
On 19 December 2006, Euronext shareholders approved the transaction with 98.2% of the vote. Only 1.8% voted in favour of the Deutsche Börse offer. Jean-François Théodore, the chief executive officer of Euronext, stated that they expected the transaction to close within three or four months.[28]
Some of the regulatory agencies with jurisdiction over the merger had already given approval. NYSE Group shareholders gave their approval on 20 December 2006.[29]
The merger was completed on 4 April 2007, forming NYSE Euronext.

#### Attempted merger with Deutsche Börse

In 2008 and 2009 Deutsche Börse made two unsuccessful attempts to merge with NYSE Euronext. Both attempts did not enter into advanced steps of merger.[30][31]

In 2011, Deutsche Börse and NYSE Euronext confirmed that they were in advanced merger talks. Such a merger would create the largest exchange in history.[32]
The deal was approved by shareholders of NYSE Euronext on July 7, 2011,[26] and Deutsche Börse on July 15, 2011[33] and won the antitrust approved by the US regulators on December 22, 2011.[34]
On February 1, 2012, the deal was blocked by European Commission on the grounds that the new company would have resulted in a quasi-monopoly in the area of European financial derivatives traded globally on exchanges.[35][36]
Deutsche Börse unsuccessfully appealed this decision.[37][38]

In 2012, Euronext announced the creation of Euronext London to offer listing facilities in the UK. As such, Euronext received in June, 2014 Recognized Investment Exchange (RIE) status from Britain’s Financial Conduct Authority.[39]

In December 2012 Intercontinental Exchange announced plans to acquire NYSE Euronext, owner of Euronext, in an $8.2 billion takeover. [40] The deal was approved by the shareholders of NYSE Euronext and Intercontinental Exchange on June 3, 2013.[41][42][43] The European Commission approved the acquisition on 24 June 2013 [44] and on Aug. 15, 2013 the US regulator, SEC, granted approval of the acquisition. [45][46][47] European regulators and ministries of Finance of the participating countries approved the deal and on November 13, 2013 the acquisition was completed.[17][18] The fact that ICE intends to pursue an initial public offering of Euronext in 2014[17] was always part of the deal and a positive elements for European stakeholders. After a complex series of operation within a very limited frame, Euronext became public in June 2014. #### Listing of Euronext and separation from ICE On June 20, 2014 Euronext was split from ICE through an initial public offering.[48] In order to stabilize Euronext, a consortium of eleven investors decided to invest in the company. These investors referred to as “reference shareholders” own 33.36% of Euronext’s capital and have a 3 years lockup period: Euroclear, BNP Paribas, BNP Paribas Fortis, Société Générale, Caisse des Dépôts, BPI France, ABN Amro, ASR, Banco Espirito Santo, Banco BPI and Belgian holding public company Belgian Federal Holding and Investment Company [fr] (SFPI/FPIM).[49] They have 3 board seats. ### Alternext Alternext is a market segment formed in 2005 by Euronext to help small and mid-class companies in the Eurozone seek financing. This initiative was later followed by the creation of EnterNext, a subsidiary of Euronext dedicated to promoting and growing the market for SMEs.[50] ### EnterNext Enternext was created in 2013 in order to help SMEs outline and apply a strategy that is most suited to support their growth. Enternext is a pan-European program and comprises over 750 SMEs, which are listed on Euronext markets in Europe.[51] Thus, EnterNext plays a key role in Euronext’s strategy of becoming a leading capital raising center in Europe. In June 2014, EnterNext launched two initiatives to boost SME equity research and support the technology sector. EnterNext partnered with Morningstar to increase equity research focusing on mid-size companies, especially in the telecommunications, media and technology (TMT) sector. ### Cash markets Euronext combines four national markets in Europe, trading stocks of major companies of each country participant, and manages the main national indices representing these stocks: AEX-index, BEL 20, CAC 40 and PSI 20. Blue chip traded on Euronext represent 20+ issuers included in the EURO STOXX 50® benchmark.[52] In 2012, Euronext announced it was opening a listings venue in London under Euronext London, which strengthened the competitive position of Euronext in Europe and increased its visibility.[53][54] Table of major instrument types traded on Euronext Cash Markets: Market / Segment Name Equities[55] Bonds[56] ETFs[57] Funds[58] ETVs / ETNs[59] Warrants, Certificates & Structured Notes[60] Alternext Amsterdam Yes Alternext Brussels Yes Yes Alternext Lisbon Yes Alternext Paris Yes Yes Easynext Lisbon Yes Yes Euronext Amsterdam Yes Yes Yes Yes Yes Yes Euronext Brussels Yes Yes Yes Yes Yes Yes Euronext Dublin Euronext Lisbon Yes Yes Yes Yes Euronext London Yes Euronext Paris Yes Yes Yes Yes Yes Marche Libre Brussels Yes Yes Marche Libre Paris Yes Yes Yes NYSE Bondmatch Yes Traded But Not Listed Amsterdam Yes Trading Facility Brussels Yes ### Derivative market Euronext has a leading milling wheat contract which is a benchmark for wheat prices in Europe. In June 2014, Euronext signed a Memorandum of Understanding (MOU) with the Dalian Commodity Exchange (DCE).[61] This agreement aims at researching the demand for commodity products in new geographic areas and developing strategies for the distribution and trading of these products in safe and orderly markets. Table of major instrument types traded on Euronext Derivative Markets:[62] Futures/Options Amsterdam, Netherlands Brussels, Belgium Lisbon, Portugal Paris, France Commodity Futures Yes Yes Commodity Options Yes Index Futures Yes Yes Yes Yes Index Options Yes Yes Yes Stock Futures Yes Yes Yes Yes Stock Options Yes Yes Yes ETF Options Yes Currency Futures Yes Currency Options Yes Dividend Futures Yes Yes Yes Yes ## Structure and indices Euronext comprises cash and derivatives markets, which, as of December 2013, cover the following operational markets and segments.[63] Market / Segment Name Cash / Derivatives Country City MIC Code Comments Euronext Amsterdam Cash Netherlands Amsterdam XAMS Alternext Amsterdam Cash Netherlands Amsterdam ALXA Traded But Not Listed Amsterdam Cash Netherlands Amsterdam TNLA Euronext EQF, Equities And Indices Derivatives Derivatives Netherlands Amsterdam XEUE Euronext IRF, Interest Rate Future And Options Derivatives Netherlands Amsterdam XEUI Euronext Brussels Cash Belgium Brussels XBRU Alternext Brussels Cash Belgium Brussels ALXB Easy Next Cash Belgium Brussels ENXB MTF for Warrants and Certificates Marche Libre Brussels Cash Belgium Brussels MLXB Trading Facility Brussels Cash Belgium Brussels TNLB Ventes Publiques Brussels Cash Belgium Brussels VPXB Euronext Brussels – Derivatives Derivatives Belgium Brussels XBRD Euronext Lisbon Cash Portugal Lisbon XLIS Alternext Lisbon Cash Portugal Lisbon ALXL Alternext is the name of a market (MTF) organised in Portugal by Euronext Lisbon, Sociedade Gestora De Mercados Regulamentados, S.A. Easynext Lisbon Cash Portugal Lisbon ENXL Mercado De Futuros E Opções Derivatives Portugal Lisbon MFOX Market Without Quotations Lisbon Derivatives Portugal Lisbon WQXL Euronext London Cash United Kingdom London XLDN A UK regulated market aimed at international issuers complementary to the existing euronext Cash markets Liffe Derivatives United Kingdom London XLIF Euronext Paris Cash France Paris XPAR Alternext Paris Cash France Paris ALXP NYSE Bondmatch Cash France Paris MTCH Financial, corporate and covered bonds trading platform for professional investors. Euronext Paris Matif Derivatives France Paris XMAT Marche Libre Paris Cash France Paris XMLI Euronext Paris Monep Derivatives France Paris XMON ### Indices Euronext manages various country (national), as well as pan-European regional and sector and strategy indices.[64] Main indices managed by Euronext[64] Name Symbol Trading Currency AEX All-share AAX EUR AEX AEX EUR Alternext All-share ALASI EUR AMX AMX EUR AScX ASCX EUR BEL 20 BEL20 EUR BEL All-share BELAS EUR BEL CONTIN STCK NR BELCU EUR BEL Mid BELM EUR BEL Small BELS EUR CAC 40 PX1 EUR CAC All-share PAX EUR CAC All-tradable CACT EUR CAC Mid & small CACMS EUR CAC Mid 60 CACMD EUR CAC Next 20 CN20 EUR CAC Small CACS EUR Euronext 100 N100 EUR EURONEXT FAS IAS FIAS EUR NYSE Euronext Iberian NEIBI EUR IEIF SIIC FRANCE SIIC EUR Low Carbon 100 Europe LC100 EUR Next 150 N150 EUR Next Biotech BIOTK EUR OSEO INNOVATION NAOII EUR Private Equity Nxt PENXT EUR PSI 20 PSI20 EUR PSI All-share BVLGR EUR REIT EUROPE REITE EUR SBF – 120 FCI EUR ### Agreements and cooperation with other exchanges Since the acquisition of Euronext by Intercontinental Exchange, information about the status and validity of agreements and cooperations is not available. Euronext provides technology and managed services to third parties. In March 2014, the group signed agreements with four new exchanges, the Beirut Stock Exchange, the Amman Stock Exchange, Bourse de Tunis and the Muscat Securities Market, for the implementation of its UTP.[65] ### Agreements and cooperation with partners On September 22, 2014, Euronext announced its new partnership with DEGIRO[66] regarding the distribution of retail services of Euronext. Upon publishing the third quarter results for 2014, the partnership was seen as a plan for Euronext to compete more effectively on the Dutch retail segment.[67] They are still partners as of April 1, 2016. ## Market data Euronext’s market data offerings cover markets in Paris, Amsterdam, Lisbon, London and Brussels and include Cash Markets Real-Time Data, Derivatives Real-Time Data, Index and End of Day Data, Reference Data and Historical Data.[68] Euronext also provides an Equity and Index Volatility Data Service that covers indices worldwide.[69] Investors, traders and professionals can also acquire market data from the Eurex Exchange through data providers like Quandl.[70] ## Exchange members Euronext has on March 30, 2016 259 members. 208 of these members are trading members and the rest trading clearance members. These members are also divided in brokers, dealers and fund agents. Not every member is authorized in every of the five countries available by Euronext.[71] ## See also • Euronext Amsterdam • Euronext Brussels • Euronext Dublin • Euronext Lisbon • Euronext Paris • List of European stock exchanges • List of stock exchanges ## References 1. ^ ab Kingdom of the Netherlands-Netherlands: Detailed Assessment of Standards and Codes (Report). Washington, D.C.: International Monetary Fund. 2004-09-29. p. 136. IFM Country Report No 04/310. Retrieved 2013-12-27..mw-parser-output cite.citation{font-style:inherit}.mw-parser-output q{quotes:”””””””‘””‘”}.mw-parser-output code.cs1-code{color:inherit;background:inherit;border:inherit;padding:inherit}.mw-parser-output .cs1-lock-free a{background:url(“//upload.wikimedia.org/wikipedia/commons/thumb/6/65/Lock-green.svg/9px-Lock-green.svg.png”)no-repeat;background-position:right .1em center}.mw-parser-output .cs1-lock-limited a,.mw-parser-output .cs1-lock-registration a{background:url(“//upload.wikimedia.org/wikipedia/commons/thumb/d/d6/Lock-gray-alt-2.svg/9px-Lock-gray-alt-2.svg.png”)no-repeat;background-position:right .1em center}.mw-parser-output .cs1-lock-subscription a{background:url(“//upload.wikimedia.org/wikipedia/commons/thumb/a/aa/Lock-red-alt-2.svg/9px-Lock-red-alt-2.svg.png”)no-repeat;background-position:right .1em center}.mw-parser-output .cs1-subscription,.mw-parser-output .cs1-registration{color:#555}.mw-parser-output .cs1-subscription span,.mw-parser-output .cs1-registration span{border-bottom:1px dotted;cursor:help}.mw-parser-output .cs1-hidden-error{display:none;font-size:100%}.mw-parser-output .cs1-visible-error{font-size:100%}.mw-parser-output .cs1-subscription,.mw-parser-output .cs1-registration,.mw-parser-output .cs1-format{font-size:95%}.mw-parser-output .cs1-kern-left,.mw-parser-output .cs1-kern-wl-left{padding-left:0.2em}.mw-parser-output .cs1-kern-right,.mw-parser-output .cs1-kern-wl-right{padding-right:0.2em} 2. ^ ab Yutaka, Kurihara; Sadayoshi, Takaya; Nobuyoshi, Yamori (2006). Global Information Technology and Competitive Financial Alliances. Idea Group Inc. (IGI). p. 137. ISBN 9781591408833. 3. ^ abc Fabozzi, Frank J., ed. (2008). “Handbook of Finance, Financial Markets and Instruments”. Handbook of Finance. 1. John Wiley & Sons. p. 143. ISBN 9780470391075. Retrieved 2013-12-27. 4. ^ ab Théodore, Jean-François (2000-09-22). “Birth of Euronext: Speech from Jean-François Théodore, Chairman and Chief Executive Officer of Euronext”. Paris Europlace. Retrieved 2013-12-27. 5. ^ “Euronext nominates Santander’s Boujnah as new CEO”. Financial Times. 2015-09-10. Retrieved 2017-07-07. 6. ^ Alcaraz, Marina (2013-12-06). “Anthony Attia prend la tête d’Euronext en France”. Les Échos (in French). Paris. Retrieved 2013-12-26. 7. ^ “Anthony Attia prend la tête d’Euronext France”. Le Figaro (in French). Paris. 2013-12-06. Retrieved 2013-12-27. 8. ^ “Euronext appoints Maurice van Tilburg CEO”. Finextra. 2015-02-02. 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The Wall Street Journal. Chicago: Lex Fenwick. ISSN 0099-9660. Retrieved 2013-12-27. 32. ^ Waller, Martin (2008-12-08). “Talks to create world’s biggest exchange”. Times Online. London. Retrieved 2008-12-09. 33. ^ Bunge, Jacob (2011-07-15). “Deutsche Börse Wins 82% Backing for NYSE Deal”. The Wall Street Journal. Chicago: Lex Fenwick. Retrieved 2013-12-27. 34. ^ Bartz, Diane (2011-12-11). “Deutsche Boerse, NYSE deal wins U.S. approval”. Reuters. Washington D.C. Retrieved 2013-12-27. 35. ^ “Mergers: Commission blocks proposed merger between Deutsche Börse and NYSE Euronext” (Press release). European Commission. 2012-02-01. Retrieved 2013-12-27. 36. ^ “NYSE Euronext merger with Deutsche Boerse blocked by EU”. BBC News. 2012-02-01. Retrieved 2013-12-27. 37. ^ “Deutsche Borse To Appeal EU Veto Of NYSE Euronext”. International Business Times. March 20, 2012. 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• Official website
• Yahoo! – Euronext NV Company Profile

## Paris Bourse

Palais Brongniart

Palais Brongniart: exterior

Location within Paris
General information
Location 2nd arrondissement, Paris, France
Coordinates 48°52′09″N 2°20′29″E﻿ / ﻿48.86917°N 2.34139°E﻿ / 48.86917; 2.34139Coordinates: 48°52′09″N 2°20′29″E﻿ / ﻿48.86917°N 2.34139°E﻿ / 48.86917; 2.34139
Design and construction
Architect Alexandre-Théodore Brongniart
Éloi Labarre

The Paris Bourse (French: Bourse de Paris) is the historical Paris stock exchange, known as Euronext Paris from 2000 onwards. The building, known as the Palais Brongniart, is located in the Place de la Bourse, in the II arrondissement, Paris.

## Contents

• 1 Early history
• 2 Architecture
• 3 Operations
• 5 Notes
• 6 Sources

• 6.1 History
• 6.2 Structure

## Early history

Historically, stock trading took place at several spots in Paris, including rue Quincampoix, rue Vivienne (near the Palais Royal), and the back of the Opéra Garnier (the Paris opera house).

## Architecture

In the early 19th century, the Paris Bourse’s activities found a stable location at the Palais Brongniart, or Palais de la Bourse, built to the designs of architect Alexandre-Théodore Brongniart from 1808 to 1813 and completed by Éloi Labarre from 1813 to 1826.[1]

Brongniart had spontaneously submitted his project, which was a rectangular neoclassical Roman temple with a giant Corinthian colonnade enclosing a vaulted and arcaded central chamber. His designs were greatly admired by Napoleon and won Brongniart a major public commission at the end of his career. Initially praised, the building was later attacked for academic dullness. The authorities had required Brongniart to modify his designs, and after Brongniart’s death in 1813, Labarre altered them even further, greatly weakening Brongniart’s original intentions. From 1901 to 1905 Jean-Baptiste-Frederic Cavel designed the addition of two lateral wings, resulting in a cruciform plan with innumerable columns. According to the architectural historian Andrew Ayers, these alterations “did nothing to improve the reputation of this uninspiring monument.”[1]

## Operations

Palais Brongniart: interior

From the second half of the 19th century, official stock markets in Paris were operated by the Compagnie des agents de change, directed by the elected members of a stockbrokers’ syndical council. The number of dealers in each of the different trading areas of the Bourse was limited. There were around 60 agents de change (the official stockbrokers). An agent de change had to be a French citizen, be
nominated by a former agent or his estate, and be approved by the Minister of Finance, and he was appointed by decree of the President of the Republic. Officially, the agents de change could not trade for their own account nor even be a counterpart to someone who wanted to buy or sell securities with their aid; they were strictly brokers, that is, intermediaries. In the financial literature, the Paris Bourse is hence referred to as order-driven market, as opposed to quote-driven markets or dealer markets, where price-setting is handled by a dealer or market-maker. In Paris, only agents de change could receive a commission, at a rate fixed by law, for acting as an intermediary. However, parallel arrangements were usual in order to favor some clients’ quote[clarification needed]. The Commodities Exchange was housed in the same building until 1889, when it moved to the present Bourse de commerce.[2]
Moreover, until about the middle of the 20th century, a parallel market known as “La Coulisse” was in operation.[3]

Until the late 1980s, the market operated as an open outcry exchange, with the agents de change meeting on the exchange floor of the Palais Brongniart. In 1986, the Paris Bourse started to implement an electronic trading system. This was known generically as CATS (Computer Assisted Trading System), but the Paris version was called CAC (Cotation Assistée en Continu). By 1989, quotations were fully automated. The Palais Brongniart hosted the French financial derivatives exchanges MATIF and MONEP, until they were fully automated in 1998. In the late 1990s, the Paris Bourse launched the Euronext initiative, an alliance of several European stock exchanges.

• List of works by James Pradier External sculpture

## Notes

1. ^ ab Ayers 2004, pp. 61–62.
2. ^ Colling, Alfred (1949). La Prodigieuse Histoire de la Bourse. Paris: Société d’éditions économiques et financières. p. 301..mw-parser-output cite.citation{font-style:inherit}.mw-parser-output q{quotes:”””””””‘””‘”}.mw-parser-output code.cs1-code{color:inherit;background:inherit;border:inherit;padding:inherit}.mw-parser-output .cs1-lock-free a{background:url(“//upload.wikimedia.org/wikipedia/commons/thumb/6/65/Lock-green.svg/9px-Lock-green.svg.png”)no-repeat;background-position:right .1em center}.mw-parser-output .cs1-lock-limited a,.mw-parser-output .cs1-lock-registration a{background:url(“//upload.wikimedia.org/wikipedia/commons/thumb/d/d6/Lock-gray-alt-2.svg/9px-Lock-gray-alt-2.svg.png”)no-repeat;background-position:right .1em center}.mw-parser-output .cs1-lock-subscription a{background:url(“//upload.wikimedia.org/wikipedia/commons/thumb/a/aa/Lock-red-alt-2.svg/9px-Lock-red-alt-2.svg.png”)no-repeat;background-position:right .1em center}.mw-parser-output .cs1-subscription,.mw-parser-output .cs1-registration{color:#555}.mw-parser-output .cs1-subscription span,.mw-parser-output .cs1-registration span{border-bottom:1px dotted;cursor:help}.mw-parser-output .cs1-hidden-error{display:none;font-size:100%}.mw-parser-output .cs1-visible-error{font-size:100%}.mw-parser-output .cs1-subscription,.mw-parser-output .cs1-registration,.mw-parser-output .cs1-format{font-size:95%}.mw-parser-output .cs1-kern-left,.mw-parser-output .cs1-kern-wl-left{padding-left:0.2em}.mw-parser-output .cs1-kern-right,.mw-parser-output .cs1-kern-wl-right{padding-right:0.2em}
3. ^  Chisholm, Hugh, ed. (1911). “Coulisse”. Encyclopædia Britannica (11th ed.). Cambridge University Press.

## Sources

### History

• Lehmann, P.-J. 1991 La Bourse de Paris, Paris: Dunod.
• Lehmann, P.-J. 1997 Histoire de la Bourse de Paris, Paris: PUF.
• Muniesa, F. 2005 “Contenir le marché: la transition de la criée à la cotation électronique à la Bourse de Paris”, Sociologie du Travail 47(4): 485-501.
• Walker, D. A. 2001 “A factual account of the functioning of the nineteenth-century Paris Bourse”, European Journal of the History of Economic Thought 8(2): 186-207. mdr..

### Structure

• Ayers, Andrew (2004). The Architecture of Paris. Stuttgart; London: Edition Axel Menges.
ISBN 978-3-930698-96-7.
• Biais, B., Foucault, T. and Hillion, P. 1997 Microstructure des marchés financiers: institutions, modèles et tests empiriques, Paris: PUF.
• Hamon, J. 1995 Marché d’actions: architecture et microstructure, Paris: Economica.
• Hamon, J. and Jacquillat, B. 1992 Le marché français des actions: études empiriques 1977-1991, Paris: PUF.