Industry Updates

French government paves way for first active ETF listings on Euronext Paris

The move aims to ‘expand the distribution channels’ of active ETFs

Theo Andrew

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The French government has paved the way for active ETFs to list in the country for the first time.

In a decree published by the Prime Minister on 27 February, the government said it would remove the conditions under its monetary and finance code which had previously prevented their listing.

Any listings will have to wait for the Autorité des Marchés Financiers (AMF) to publish an update to its regulations, expected imminently.

It paves the way for active ETF issuers to list their products on the Euronext Paris, a rapidly growing area of the market.

“These products, which are experiencing strong development in the US, could potentially expand the distribution channels of actively managed funds in Europe,” the government said.

“The decree modifies the monetary and financial code in order to remove this condition and thus allow the issue and admission to trading of active ETFs in France.

“This measure will contribute to the modernisation of the range of savings products and the competitiveness of the Paris market.”

The code – first written in 2001 – outlines what asset managers can list on the French stock exchange.

It was updated a few years later to integrate smart beta ETFs, adding the notion “based on an index or an algorithm”.

The new updates will remove “index-based” from the code.

Olivier Paquier, global head of ETF sales at AXA Investment Managers, said: "We can identify two business advantages here. Firstly, investors tend to favour proximity and local stock exchange to buy, sell and process instruments.

“Secondly, international investors are watching closely European stock exchanges and are supportive of the fact that ETF providers are multi-listed.”

The active ETF market in the US grew by 30% in the US last year and is worth roughly $500bn.

The European market has also experienced strong growth with $32.9bn assets under management (AUM) at the end of 2023, according to data from ETFbook.

JP Morgan Asset Management is the dominant force on the continent, generating a 42.5% market share since entering in 2018 with $14bn active ETF AUM.

There have been several new active ETF entrants in recent years including AXA Investment Managers, abrdn, BNP Paribas Asset Management and Investlinx.

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