London Stock Exchange

The market in London that deals in securities. Dealings in securities began in London in the 17th century. The name Stock Exchange was first used for New Jonathan's Coffee House in 1773, although it was not formally constituted until 1802. The development of the industrial revolution encouraged many other share markets to flourish throughout the UK, all the remnants of which amalgamated in 1973 to form The Stock Exchange of Great Britain and Ireland. After the Big Bang in 1986 this organization became the International Stock Exchange of the UK and Republic of Ireland Ltd (ISE) in an attempt to stress the international nature of the main UK securities market, although it is still widely known as the London Stock Exchange. Its major reforms included:

• allowing banks, insurance companies, and overseas securities houses to become members and to buy existing member firms;

• abolishing scales of commissions, allowing commissions to be negotiated;

• abolishing the division of members into jobbers and brokers, enabling a member firm to deal with the public, to buy and sell shares for their own account, and to act as market makers;

• the introduction of the Stock Exchange Automated Quotations System, a computerized dealing system that has virtually abolished face-to-face dealing on the floor of exchange.

The ISE now has four core business areas:

• equity markets – the main market for listed companies and the Alternative Investment Market for unlisted securities;

• trading services – trading platforms that are used by broking firms around the world to buy and sell securities;

• market information – the provision of prices and news;

• derivatives – a recent diversification beyond the core equity markets. The ISE created the European Derivatives Exchange (EDX) London in 2003.