London Stock Exchange

The London Stock Exchange (LSE) is a global stock exchange based in Paternoster Square in the City of London, England. Founded in 1801, it is one of the world's oldest continuously operating stock exchanges. It helps companies raise money by selling shares to investors, and people can buy and sell these shares on the exchange.

As of mid-2025, the exchange had a total market capitalisation of approximately US$5.9 trillion for all listed instruments. It hosts over 1,900 companies from more than 60 countries, operating several key markets for established global companies and smaller, high-growth firms through the Alternative Investment Market (AIM).

The London Stock Exchange is especially important for the Natural Resources sector, with the world's largest concentration of mining capital. Despite challenges following Brexit, the LSE remained a leading stock market in Europe, with its main index, the FTSE 100 Index, reaching new heights in recent years.

History

See also: English coffeehouses in the 17th and 18th centuries

The Royal Exchange was founded by the English financier Thomas Gresham and Sir Richard Clough on the model of the Stock Exchange in Antwerp. It was opened by Queen Elizabeth I in 1571.

In the 17th century, stockbrokers were not allowed in the Royal Exchange. They operated from nearby coffee houses, like Jonathan's Coffee-House, where a broker named John Castaing started listing prices of goods such as salt and coal in 1698. These listings were not daily at first.

After the Royal Exchange was destroyed in the Great Fire of London, it was rebuilt in 1669. This move marked a shift toward a more modern stock exchange. The Royal Exchange became a regulated market, though it faced issues with unlicensed brokers. Laws were passed to control these brokers and limit the number allowed.

Later, traders began leaving the Royal Exchange and dealing in the streets, known as 'Exchange Alley'. Efforts were made to stop this, but trading continued. In 1801, a new, regulated exchange was created, marking the start of the London Stock Exchange as we know it today.

The Exchange faced challenges during the World Wars but continued to operate. After World War II, new buildings and technologies helped it grow. In the 1980s, major changes known as the "Big Bang" brought new rules and electronic trading. The Exchange moved to its current home in Paternoster Square in 2004 and continues to play a key role in global finance.

Activities

The London Stock Exchange has two main markets where companies can trade. The main market includes over 1,300 large companies from 60 countries, and the FTSE 100 Index shows the performance of the 100 biggest British companies listed there. The Alternative Investment Market is for smaller companies, including those backed by venture capital, offering them a simpler way to raise money and grow.

Besides these primary markets, the LSE also allows trading of many different financial products. These include common stock, bonds, derivatives, exchange-traded funds, debt securities, exchange-traded commodities, structured products, covered warrants, global depositary receipts (GDRs), and gilt-edged securities.

Post trade

The London Stock Exchange Group provides services to help complete trades through its Italian branch, Borsa Italiana. It uses Cassa di Compensazione e Garanzia and Monte Titoli to manage these trades safely. These services cover many types of financial items, including stocks, derivatives, and bonds in Italy. Monte Titoli also works with more than 400 banks and brokers to handle trades before and after they are completed.

Technology

The London Stock Exchange uses its own trading platform called Millennium Exchange, which runs on Linux. Before this, it used a different system called TradElect, made by Microsoft, but switched to Linux because TradElect had problems.

The LSE allows companies to list their stocks in different currencies, mostly in GBP, but sometimes in EUR or USD. It also supports many tech companies from Israel, which help grow its business.

Mergers and acquisitions

On 3 May 2000, the London Stock Exchange planned to merge with the Deutsche Börse, but the merger did not happen.

On 23 June 2007, the London Stock Exchange agreed to merge with Borsa Italiana. This created a big exchange group in Europe called the London Stock Exchange Group. In 2009, the group bought Turquoise, a Pan-European trading platform.

On 9 October 2020, the London Stock Exchange sold Borsa Italiana to Euronext for €4.3 billion. The sale was completed on 29 April 2021.

On 12 December 2022, Microsoft bought a small part of the London Stock Exchange Group as part of a cloud deal.

Opening times

Normal trading sessions on the main orderbook (SETS) are from 08:00 to 16:30 local time every day except Saturdays, Sundays, and holidays. The exchange has specific times for different activities, such as opening and closing auctions.

SETSqx is a service for securities that are less liquid than those traded on SETS. Auction uncrossings happen at set times during the day. The exchange is closed on holidays like New Year's Day, Good Friday, Easter Monday, May Bank Holiday, Spring Bank Holiday, Summer Bank Holiday, Christmas Day, and Boxing Day. If these holidays fall on a weekend, the next working day is also a holiday.

Arms

The London Stock Exchange does not have an official coat of arms, but it has been granted heraldic support. This means it uses symbols from British heraldry to represent its importance and history. These symbols help show the exchange's role in the financial world and its long-standing presence in London.