London Stock Exchange: from coffee house to cyber market

The London Stock Exchange is the world’s most international capital market. Over 2,400 companies from more than 90 countries are quoted across its markets, with a combined value of over £4 trillion.

Its markets include the Main Market, the flagship venue for equity, debt and exchange-traded products, offering businesses access to Europe’s most liquid pool of capital, and AIM, hailed as the world’s leading market for small and growing companies.

Borsa Italiana SpA is one of Europe’s largest and most established stock exchanges. The Italian Exchange operates markets trading in Italian equities, bonds and derivatives. Markets include the MIV and STAR segments as well as AIM Italia and MAC for small cap companies.

Founded: 1801

Address: 10 Paternoster Square, London, EC4M 7LS

Telephone: +44 (0)207 797 1000

Website: www.londonstockexchange.com

Owner: London Stock Exchange Group (founded 2007; www.lseg.com)

Group Chief Executive Officer: Xavier Rolet

Best known indices

FTSE 100
FTSE 250
FTSE 350
FTSE All-Share
FTSE AIM UK 50
FTSE AIM 100
FTSE AIM All-Share

Opening hours: 8:00 am - 4:30 pm Monday-Friday

Market capitalisation: £4 trillion-plus

Number of companies listed: 2,400-plus

Biggest companies listed as of 26 May 2017: Royal Dutch Shell, Unilever, HSBC, British American Tobacco, GlaxoSmithKline.

Serious fun facts

Cash equities round-trip latency on London Stock Exchange had an average of 84 microseconds in 2016 and was available for 100% uptime during the year (2015: 100%)
The average daily volume of transactions for 2016 was 78 million
Total income for 2016 was £2,047.9 million (2015: £2,381.5 million)

Fun fun facts

The London Stock Exchange was a lively venue in its earliest days
Frequent notices prohibited fireworks, footballs, butter slides and other distractions
Bags of sawdust or flour were burst over the heads of members gathered around the subscriptions lists
Coat-tails and newspapers were surreptitiously set on fire.
One especially scruffy broker was ceremoniously presented with a towel and a bar of primrose soap
Gullible clerks or members were traditionally dispatched to find details of non-existent stocks such as Chinese Turnpikes or Sky and Deep Sea Junction.
(Source: Coffee House to Cyber Market by Elizabeth Hennessy).

London Stock Exchange history

The Group can trace its history back to 1801, though trading took place in London's coffee houses and other venues before that.

The Group is truly diversified by business activity, by geography and by currency, providing resiliency across market cycles and opportunity for continued growth.

by Xavier R Rolet KBE LSE Group Chief Executive

A market in loan tallies and future bill settlements had been in existence since the early 17th Century, by the name “Stock Exchange” was formally adopted in 1773 by a group of brokers, dealing in the stocks of new commercial companies.

They operated from premises in Sweetings Alley, Threadneedle Street. In 1802, this group moved into purpose-built accommodation on the corner of Throgmorton Street and Old Broad Street. In 2004, the LSE relocated to Paternoster Square.

In 1802 the Stock Exchange formalised its constitution and was closed to non-members; this enabled it to regulate its own financial affairs, its membership and to set out rules and regulations to ensure fairness and eliminate fraud in its transactions.

In 1946 the original arrangement of the Board of Trustees, managing financial and building matters, and the General Purposes Committee, regulating membership and dealings, was reorganised.

The Stock Exchange became a members’ society and the Council for the Stock Exchange assumed responsibility for every aspect of its government.

Quotation and listing of companies

Formal application had to be made by a company before permission to deal in its securities was granted. The Share and Loan Department scrutinised a company’s prospectus to ensure its compliance with the law and the Stock Exchange rules.

The Quotations Department made the ultimate decision on the suitability of a company for its shares to be traded on the Stock Exchange. A printed list of securities and their prices was first produced in 1698 by John Castaing.

He was a broker at Jonathan’s Coffee House. By 1803, the list was being published twice weekly under the control of Edward Wetenhall who claimed it was “By authority of the Stock Exchange Committee”.

We like a little list

Daily lists concerning important shares began with railway shares in 1844. In 1867 there were three daily lists covering English/foreign shares, foreign stocks, and railways. The LSE's Share and Loan Department became responsible for the Daily Official List.

This was a consolidation of the three current lists and also included all companies regarded as being of sufficient size or of particular public interest. A daily supplement was printed containing quotations for lesser securities.

From 1947, these two lists were combined and the Daily Official List printed prices monthly for all securities for which an official quotation had been granted. Admission to the official list is referred to as a “listing” or “quotation”.

Marking slips not compulsory

However, the prices in the Official List were constructed from “marking slips” completed by brokers giving details of their dealings (bargains). This was not compulsory.

The 21st century London Stock Exchange Group is also a developer of trading platforms and capital markets software. Over 40 other organisations and exchanges around the world use the Group’s MillenniumIT trading, surveillance and post-trade technology.

A number of trends continue to shape its industry

Globalisation and changing distribution of wealth
Low and uncertain growth
Changing investment behaviours
Customer balance sheet and operational constraints
An innovative and consolidating competitive landscape
Regulatory change

Key moments

1698 First printed list of securities produced by John Castaing, a broker at Jonathan's Coffee House

1694 The Bank of England is established, by Scottish entrepreneur, William Paterson. It began life as a private sector company.

1711 The South Sea Company is set up to enable British trade with South America. Demand for its stock is intense. This leads to the irrational market phenomenon known simply as the South Sea Bubble.

1720 South Sea Bubble bursts. UK parliament passes the Bubble Act. This meant only royal chartered companies could issue public shares.

1801 London Stock Exchange officially launched.

1802 LSE moves into purpose-built accommodation on the corner of Throgmorton Street and Old Broad Street.

1825 Companies allowed to issue shares on the LSE.

1844 Daily lists begin for important companies.

1887 By now there are three daily lists covering English/foreign shares, foreign stocks, and railways.

1935 Launch of the FT30 index.

1946 Bank of England nationalised.

1973-74 Stock market crash hits the UK particularly hard. FT 30 Index loses nearly three-quarters of its value. The Dow Jones Industrial Average fell by almost half.

1979 The forerunner to the European Exchange Rate Mechanism comes into being; the UK pound stays out.

1982 The London International Financial Futures and Options Exchange (LIFFE) is launched.

1984 Launch of FTSE100 Index.

1986 Big Bang in London deregulates and restructures the City and its financial markets overnight in October of that year.

1987 Black Monday, 19 October; stock markets crash around the world.

1990 The UK government enters the pound into the European Exchange Rate Mechanism.

1992 Black Wednesday, 16 September; Britain leaves the European Exchange Rate Mechanism.

2004 LSE moves to Paternoster Square.

2016

Germany's Deutsche Boerse AG and the UK's London Stock Exchange Group announce controversial plans to merge
The UK unexpectedly votes to leave the European Union
Stock markets fall by more than US$2 trillion the day after the shock

2017

European Commission blocks Deutsche Boerse AG and LSEG merger plans
LSEG reaches agreement with Citigroup Inc to acquire The Yield Book and Citi Fixed Income Indices, a fixed income analytics platform and index business

Top ten stock exchanges of the world

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