London Stock Exchange
The London Stock Exchange (LSE) is amongst the oldest and most significant stock exchanges in the world. With a history of providing unparalleled liquidity to British businesses, LSE combined the trading of stocks, commodities and derivatives into a single market. Prior to this, stock trading was conducted in regional stock centers such as Birmingham, Liverpool and Manchester.
Over the years, LSE has seen many changes and innovations, each of which have contributed to the success of the companies who call the exchange their home. Today, LSE is one of the most active and respected exchanges in the global financial system.
The London Stock Exchange operates a primary and secondary market. Its primary market serves as the foundation on which stocks and other financial instruments are traded on the exchange. Companies must meet certain requirements to gain access to the exchange, including listing requirements and risk disclosure requirements. Once listing requirements are met, companies can access the primary market and list their shares. Several specialized market makers, known as “traders”, ensure liquidity in the secondary market.
The majority of the trading activity on the LSE occurs on the exchange’s secondary market; however, LSE also offers alternative methods for trading stocks. As more companies choose to list their shares on the exchange, it is becoming increasingly popular to trade stocks “over the counter” (OTC). Over-the-counter trading is conducted offline and can be swift and cost-efficient.
LSE also offers exchange-traded funds (ETFs). ETFs are asset-based products, allowing traders to invest in large baskets of assets in a single trade.
The exchange is open to investors from all over the world, and it is not just limited to the UK. Amongst its members are some of the world’s largest financial institutions as well as investment funds, including Vanguard and Blackrock. This is why despite electronic trading operations being based mainly in the UK, traders from around the world can access the exchange.
The London Stock Exchange offers other services, too, such as a trading platform, the SETS Trading Exchange, and a data center, the EDX. It is also the custodian for the UK’s listed securities. In addition, the exchange provides products and services for the smooth functioning of capital markets.
In recent years, the London Stock Exchange has become a leading voice in the international trading community. Its deep expertise and advanced technology have enabled the exchange to discover innovative ways of meeting the demands of global investors. This makes it a widely sought-after destination for private and institutional investors alike.
