What is the London Stock Exchange?
The London Stock Exchange or LSE is the United Kingdom’s primary stock exchange. It is the largest stock exchange in Europe, and sometimes referred to as one of the ‘Big Three,’ alongside the New York Stock Exchange (NYSE) and Tokyo Stock Exchange (東京証券取引所).
The LSE, which is part of the London Stock Exchange Group, is located in The City of London or The City; London’s financial district.
The London Stock Exchange is one of the oldest stock exchanges in the world. Its history dates back over three hundred years.
In 2007, the LSE merged with the Milan Stock Exchange, Borsa Italiana, creating the London Stock Exchange Group.
A stock exchange is a market in which securities are traded, i.e., bought and sold. Stock exchanges are part of the stock market.
The FTSE100 Index (FTSE100) or Footsie is a share index of the 100 largest companies listed on the London Stock Exchange. Largest, in this case, refers to companies with the highest market capitalization.
The FTSE Group, which is part of the London Stock Exchange Group, maintains the FTSE100.
London Stock Exchange – brief history
Regarding its history, the London Stock Exchange makes the following comment on its website:
“For over 300 years, the London Stock Exchange has produced detailed market information for companies and investors.”
“Technological innovations have transformed this service from a twice-weekly paper publication for the London business community to a continuous flow of electronic information to all the financial markets across the globe.”
John Castaign began issuing The Course of The Exchange and Other Things. It was a detailed list of market prices. He issued it from Jonathan’s Coffee House twice a week; every Tuesday and Friday.
The flow of financial information took a giant leap thanks to the electric telegraph. Price information was trasmitted via tickertape.
For the first time, company bulletins were pinned up on noticeboards in the Exchange.
Noticeboards on the Exchange floor were replaced by the Enunciator, which displayed headlines electronically.
Extel and the LSE introduced the MPDS (Market Price Display Service). It consisted of sixteen pages of market prices as well as four pages of company news in summary form. MPDS’ mainframe computer was huge; it took up a whole floor of an office building.
The year of the Big Bang – the de-regulation of the securities industry. Trading became a high-tech operation. Face-to-face dealings on the LSE floor gave way to computer and telephone dealings. Market users received full text announcements on the CNS (Company News Service) and ETNS (Edited Text News Service) summaries.
The days of the open outcry trading floor teeming with traders and bustling activity were over. Put simply, most of the humans were replaced by machines.
The advent of the Internet during the last two decades of the 20th century brought about a dramatic change on how we work, study, rest, play. The RNS (Regulatory News Service) became the RNS Internet Services. It is still the London Stock Exchange’s official news outlet.
A new RNS conversion tool made it easier for companies to submit their bulletins and announcements.
According to the LSE:
“Today, RNS is the leading specialist provider of regulatory disclosure distribution services to UK listed and Aim companies, giving them the power to communicate with the international investor audience and fulfil their regulatory obligations – wherever they are – through just one partner.”
The LSE says:
“We are the world’s most international exchange, providing the foundations that convene global capital for all businesses and investors, providing the trading infrastructure at the heart of the world economy to facilitate constant investment globally.”
Video – What is the London Stock Exchange?
This interesting video, from our sister channel on YouTube – Marketing Business Network, explains what the ‘London Stock Exchange’ is using simple and easy-to-understand language and examples.