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Sunday, 22 July 2012

London Stock Exchange

If you wish to learn the ancient story and the modern glory about investment options, learn the history and growth of London Stock Exchange. Its background information has to start from 1773, the year it was founded in this river city. This is the world's oldest stock exchanges and one of the top three leaders. New York comes first followed by Tokyo and London. It was reincorporated as a private limited company in 1986. As for the international share trading it is the leader. It has grown like the octopus, its roots and branches have spread to a number of market products. Some of them are:
  • The main Board listing involves 3,000 companies, including 500 international companies.
  • The secondary AIM (Alternative Investment Market), to trade in small, high growth companies was established in 1995.
  • 70+ companies are listed on the AIM Board.
  • With the launching of SETS (Stock Exchange Electronic Trading Services) in 1997, a new listing techMARK is introduced, to meet the specific needs of high technology sector. This service is comparable and competitive with the NASDAQ index.
As for the British, trade and imperialism were the alternative beats of the same heart from the sixteenth century onwards. LSE is part of the colonial history of the British Empire. The development of the share-based empire is the outcome of their trade and territorial expansionist ambitions. Trade was a means to get the political hold in a land of their choice. Organizations by a single individual or partnership of three or four persons, could achieve the limited objectives. The great trade explorations voyages had to be financed through broader channels. So, the first shareholder-based company came to be established in the year 1553. The arithmetic behind this exercise was simple. Divide the risk between a large numbers of individuals by selling those shares. The company thus raised funds that were required for its operations.

The mushroom growth of Exchanges created its own problems, and a need was felt for mutual cooperation and the Association of Stock Exchanges was formed which led to closer coordination between them. At that time, 20 exchanges operated outside of London. Since the small ones amongst them were no more viable, in 1973, smaller provincial exchanges were molded into a single national exchange under the LSE.

LSE faced he real challenge in the 1990s. The internet revolution, led to drastic changes, in the style of operation of the Stock Exchanges, which had far reaching consequences with the approach of the brokers to the clients and vice-versa. The days of telephonic confirmations were dead and gone. The transactions picked up pace and the turnover of buying and selling increased. Trading continued non-stop around the world. A big population began to veer around stock investments. The number of investors and brokers increased to staggering heights.

To be one of the oldest financial institutions is one thing, but to occupy the position of one of the top leaders is creditworthy. LSE fits into the later category. It constantly reviews its functional policies and is willing to change to move ahead with the needs of the time. So, it is a long, long journey from the coffee house of the 17th century London to the topmost financial institution. Presently it is in Paternoster Square close to St Paul's Cathedral in the City of London.

The four core areas of LSE operations are Equity markets consisting of Main Market Alternative Investment Market (AIM), Professional Securities Market (PSM) and Specialist Fund Market (SFM), Trading Services, Market Data Information and the derivatives. The trading sessions are from 8.00 to 16.30 hrs. except on Saturdays and Sundays which are weekly holidays.

For more information please visit www.sogotrade.com , an online stock trading website.

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