A history of the London Stock Exchange

The bustling, busy London Stock Exchange is interwoven with the history of London itself, and dates back hundreds of years. In this blog, we’ll take a quick look through some of the notable dates and figures which have helped form the modern stock exchange, helping you gain a better understanding of this London institution.

Early Origins

The roots of the London Stock Exchange can be traced back to the latter years of the 16^th century. At this time, London was already a thriving trading hub, and shares were becoming increasingly popular as a means of investing in companies which sought to continue England’s ongoing exploration of the world, and its development of crucial trading partnerships elsewhere around the globe. Such trading was often reserved for the coffee shops of the era, known for their buzzing social scene. Many were located close to the Royal Exchange, which in itself provided ample opportunities for trading.

The appeal of these historic investments focused on the profits which could be gained through everything from the building of ships to the trading of prized cargo, though many investors lost huge sums of money due to the poor communication of the era and the ever-present danger that each investment might be lost at sea. While this world of investing is miles from the everyday realities of modern-day investors staying at the Montcalm London, the London Stock Exchange is still known for its daring approach to trading.

Beginning of Trading Rules

The London Stock Exchange was not founded until 1986, but as early as 1773 brokers were setting up more formalised versions of the chaotic trading conditions of prior decades. A rule book was established in the late-1700s which set out the terms of trading and selling shares, and required each member to register with an ‘exchange’. Similar conditions remained until the market was deregulated in the late-1980s.

This may sound remarkable to those currently visiting the Montcalm London, but before 1986, the rules governing this form of trading had remained largely the same. Stock exchange deregulation helped to remove the elitist feel of trading, and encouraged outsiders to operate and invest for the first time. New figures were now able to act as brokers, and a subsequent updated rule book was created, which increased competitiveness.

Current LSE

The current London Stock Exchange is among the largest globally, taking fourth place in a worldwide market. It is frequently the middle-man between the Far East and North American markets, and thousands of businesses have shares active in London. There are several markets in the United Kingdom, including the LSE Main Market (the largest and most-established) and AIM (the alternative investment market) which has grown dramatically since its introduction in 1995.

Today, stock market performance measurement is crucial and carried out through tools such as the FTSE 100 Index. This measures share prices and monitors the status of UK businesses, providing comprehensive data about the stock market.