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The History of the London Stock Exchange

One of the world’s oldest stock exchanges, the London Stock Exchange has a history dating from the 17th century.  In 1698 a stock dealer called John Castaing started to produce a list of stock and commodity prices.  Together with other dealers he operated from Jonathan’s Coffee House in London, which became the first centre for organised trading in marketable securities in the capital.  The coffee house burnt down in a fire in 1748.

In 1761 a group of 150 stockbrokers set up a club to buy and sell shares.  Originally named ‘New Jonathan’s’, club members later voted to rename it ‘The London Stock Exchange’.  The Stock Exchange was first regulated in 1801, and continued in business until it was forced to close in July 1914 because of the First World War.  The Stock Exchange reopened the following year and has operated almost continuously since then, closing for only a few days during World War Two.

A major milestone in the Stock Exchange’s history occurred in 1973, when women members were admitted for the first time, the result of years of campaigning by women working in the financial sector.  Although accepted as members, women dealers were still not allowed onto the trading floor, and it wasn’t until 2001 that a woman was given a senior post, when Clara Furse was appointed as chief executive.

Another big shake-up came in 1986, with deregulation of the market, the famous ‘Big Bang’.  The Stock Exchange became a private limited company and trading was no longer carried out face-to-face on the market floor, but via computer and telephone from separate dealing rooms.  Then in 2000 shareholders voted to transform the Stock Exchange into a public limited company, known as London Stock Exchange plc, and listed on the stock market.

In 2004 the London Stock Exchange moved to new all-electronic headquarters near St. Paul’s cathedral.  The new building reflects the needs of an organisation that has evolved rapidly over recent years.  Electronic trading means there is no need for a trading floor, the emphasis instead being on an efficient IT infrastructure.   The London Stock Exchange’s role in the global financial community has also changed.  New York took over as the world’s largest stock exchange many years ago, but the London Stock Exchange is still the most international exchange in terms of the number of shares traded in foreign companies.

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