London Stock Exchange – One of the Oldest
3E Accounting takes a brief look at the London Stock Exchange, one of the oldest global stock exchanges.
The London Stock Exchange or LSE is the second largest in Europe and the oldest at 300 years of age. Its long history is quaint and full of character, having had its roots in local coffee houses in England. Initially operating as regionally scattered exchanges, a merger finally occurred in 1973. This formed the Stock Exchange of Great Britain and Ireland, the precursor of the LSE.
The Great British Trade
The LSE is physically located in the city of London but appears to have started from a local coffee shop. History suggests that original trade began in 1698 when a broker started listing prices of commodities and stocks. The brokers operated from coffee houses as the ‘rough’ traders were not allowed into the Royal Stock Exchange. The RSE was created in 1571 but burned down in the Great Fire of London.
More than a century later in 1801, paid membership and a regulated practice finally came about, known as the Subscription Room. This soon became known as The Stock Exchange, and in 1812, its first Rule Book was codified. With the rise of foreign lending, international trade boomed. This saw the Liverpool and Manchester stock exchange opening.
However, turbulent times came about following the two world wars. The stock exchange only regained firmer footing from the 1950s onwards. Expansion into international markets came about with AIM or the Alternative Investment Market. In 2000, the LSE became a public limited company.
The LSE’s primary market has 40 different sectors with real-time pricing and benchmarking via the FTSE UK Index. It offers the Premium Listed Main Market, Professional Securities Market and Specialist Fund Market. The LSE’s secondary markets include exchange-traded commodities, derivatives, bonds, and common stock amongst others.
Here are some interesting facts and figures on the LSE:
- It started accommodating global capital markets in 1986 following deregulation. Referred to as the ‘Big Bang’, it marked the start of the electronic trading system.
- The LSE’s dominant index is the ‘Footsie 100’ or the Financial Times Stock Exchange (FTSE) 100 Share Index.
Its trading platform is named the Millennium Exchange and seamlessly handles more than two thousand companies.
- The LSE accounts for over 5% of global stocks and is ranked eighth largest in the world.
- It merged with the Borsa Italiana, the Milan Stock Exchange, in 2007 to form the London Stock Exchange Group.
- It is a formidable entity that rivals the NYSE (New York Stock Exchange). Its combined market capitalisation in 2020 amounted to GBP3.7 trillion.
- The Occupy London movement targeted the Stock Exchange in 2011 and attempted to occupy the square in front of the building. In 2019, thirteen Extinction Rebellion members glued themselves into a chain and blocked the Stock Exchange.
To learn more about the LSE or starting a company with a view to listing on the London Stock Exchange, Contact 3E Accounting today. Along with our international affiliates and partners, 3E Accounting is a company formation specialist with regional expertise and global experience. Get in touch with us for innovative and customisable solutions for all your business needs.