London Stock Exchange

Overview

The London Stock Exchange is located in London, England, and is the largest exchange in Europe and one of the largest in the world. The LSE has 350 companies from more than 50 countries, making it the most international of all stock exchanges.1)http://www.investopedia.com/terms/l/lse.asp Retrieved 16 January 2015. The LSE’s dominant index is the Financial Times Stock Exchange (FTSE, or “Footsie”), which contains the top-performing 100 companies listed on the exchange. As of 2014, the LSE has a market cap of £4.09 trillion.2)http://www.londonstockexchange.com/statistics/monthly-market-report/dec-14.pdf Retrieved 2 February 2015.

In this article:
Overview | History | Products

London Stock Exchange History

Beginning in the late 1600s, organized trading began in the coffee houses in London. Trading began with prices for a few commodities, and the auctions would occur during the time a candle could burn. By the mid-1700s, some 150 stock brokers were gathering at a coffee shop to buy and sell shares.3)http://www.londonstockexchange.com/about-the-exchange/company-overview/our-history/our-history.htm Retrieved 29 January 2015.

The London Stock Exchange was formally founded in 1801, when formal memberships were offered up for subscriptions. As world economies began booming, the stocks offered and memberships sold rose. Branches of the stock exchange were opened in growing business centers, Liverpool and Manchester.

Throughout the 20th-century, the London Stock Exchange saw more growth in size, dampened occasional by two world wars. In 1945, trading was moved to the basement floor after the building was struck with a V2 rocket.4)http://www.londonstockexchange.com/about-the-exchange/company-overview/our-history/our-history.htm Retrieved 29 January 2015. By 1967, the exchange moved to Stock Exchange Tower (where it would remain until 2004). To gauge the prosperity of the market, in 1984, the London Stock Exchange release the FTSE 100 Index, compiling the exchanges top 100 companies.

In 1986, a sudden deregulation of the UK stock market, which abolished minimum commissions, allowed for electronic trading, voting by individual members and ownership of member firms by outside corporations; this event is known as the “Big Bang.”5)http://www.londonstockexchange.com/about-the-exchange/company-overview/our-history/our-history.htm Retrieved 29 January 2015. With the new influx of computer systems, the stock exchange moved to a new headquarters in Paternoster Square to facilitate new needs.

London Stock Exchange Products

For companies looking to list on the exchange, the LSE has multiple markets. LSE’s Main Market has listing usually reserved for large, established companies. LSE’s AIM is a market intended to service smaller and growing companies. The Professional Securities Market and Specialist Fund Market offer alternative listings, as well.
Within the exchange, the LSE offers several indexes, including:

  • FTSE 100 Index
  • FTSE 250 Index
  • FTSE 350 Index
  • FTSE SmallCap Index
  • FTSE All-Share Index

The LSE’s secondary markets include securities trading through bonds, covered warrants, ETPs, ETFs and more.

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