page_title: Euronext
section_title: Amsterdam (1602–2000)
hierarchical_section_title: Euronext / History / Pre-merger exchanges / Amsterdam (1602–2000)
context_page_description: Euronext N.V. is the largest bourse in continental Europe, operating markets in Amsterdam, Brussels, London, Lisbon, Dublin, Oslo and Paris. Euronext had 1,500 listed companies worth €4.1 trillion in market capitalisation as of end July 2019. In addition to cash and derivatives markets, Euronext provides listing market data, market solutions, custody and settlement services. Its total product offering includes equities, exchange-traded funds, warrants and certificates, bonds, derivatives, commodities and indices as well as a foreign exchange trading platform.
  Euronext's registered office and corporate headquarters are situated in Amsterdam and Greater Paris's La Défense district, respectively.
  Tracing its origins back to the founding of the Amsterdam Stock Exchange in 1602 by the Dutch East India Company, Euronext was founded in 2000 by the merger of the exchanges in Amsterdam, Paris and Brussels. Euronext has since grown by developing services and acquiring additional exchanges and has, after being merged with the New York Stock Exchange from 2007 to 2014 as NYSE Euronext, been spun off to once again being a standalone European exchange.
context_section_description: The Amsterdam Stock Exchange (Dutch: Amsterdamse effectenbeurs) was considered the oldest "modern" securities market in the world. It was shortly after the establishment of the Dutch East India Company (VOC) in 1602 when equities began trading on a regular basis as a secondary market to trade its shares. Prior to that, the market existed primarily for the exchange of commodities. In that year, the States General of the Netherlands granted the VOC a 21-year charter over all Dutch trade in Asia and quasi-governmental powers. The monopolistic terms of the charter effectively granted the VOC complete authority over trade defenses, war armaments, and political endeavors in Asia. The first multi-national corporation with significant resource interests was thereby established. In addition, the high level of risk associated with trade in Asia gave the VOC its private ownership structure. Following in the footsteps of the English East India Company, stock in the corporation was sold to a large pool of interested investors, who in turn received a guarantee of some future share of profits. In the Amsterdam East India House alone, 1,143 investors subscribed for over ƒ3,679,915 or €100 million in today's money.
  The subscription terms of each stock purchase offered shareholders the option to transfer their shares to a third party. Quickly a secondary market arose in the East India House for resale of this stock through the official bookkeeper. After an agreement had been reached between the two parties, the shares were then transferred from seller to buyer in the "capital book". The official account, held by the East India House, encouraged investors to trade and gave rise to market confidence that the shares weren't just being transferred on paper. Thus, speculative trading immediately ensued and the Amsterdam securities market was born.
  A big acceleration in the turnover rate came in 1623, after the 21-year liquidation period for the VOC ended. The terms of the initial charter called for a full liquidation after 21 years to distribute profits to shareholders. However, at this time neither the VOC nor its shareholders saw a slowing down of Asian trade, so the States General of the Netherlands granted the corporation a second charter in the West Indies.
  This new charter gave the VOC additional years to stay in business but, in contrast to the first charter, outlined no plans for immediate liquidation, meaning that the money invested remained invested, and dividends were paid to investors to incentivize shareholding. Investors took to the secondary market of the newly constructed Amsterdam Stock Exchange to sell their shares to third parties. These "fixed" capital stock transactions amassed huge turnover rates, and made the stock exchange vastly more important. Thus the modern securities market arose out of this system of stock exchange.
  The voyage to the precious resources in the West Indies was risky. Threats of pirates, disease, misfortune, shipwreck, and various macroeconomic factors heightened the risk factor and thus made the trip wildly expensive. So, the stock issuance made possible the spreading of risk and dividends across a vast pool of investors. Should something go wrong on the voyage, risk was mitigated and dispersed throughout the pool and investors all suffered just a fraction of the total expense of the voyage.
  The system of privatizing national expeditions was not new to Europe, but the fixed stock structure of the East India Company made it one of a kind. In the decade preceding the formation of the VOC, adventurous Dutch merchants had used a similar method of "private partnership" to finance expensive voyages to the East Indies for their personal gain. The ambitious merchants pooled money together to create shipping partnerships for exploration of the East Indies. They assumed a joint-share of the necessary preparations (i.e. shipbuilding, stocking, navigation) in return for a joint-share of the profits. These Voorcompagnieën took on extreme risk to reap some of the rewarding spice trade in the East Indies, but intr
caption: Courtyard of the Amsterdam Stock Exchange, circa 1670.
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