„dictum meum pactum” = „my word is my bond”

(motto of the Coat of Arms - the logo of the LSE)

The London Stock Exchange (LSE) is one of the largest stock exchanges in the world, with many overseas listings (firm dopuszczonych do obrotu giełdowego) as well as British companies. The LSE belongs to the London Stock Exchange Group plc. (together with the Italian Stock Exchange). The key people of the company are: Chris Gibson-Smith (its Chairman) and Clara Furse (Chief Executive Officer).

History

The trade in shares in London began in XVII century with the need to finance two voyages of the Muscovy Company's (Kompania Moskiewska) and the East India Company (Kompania Wschodnioindyjska) to the Orient. Unable to finance these journeys on their own, the companies raised the money by selling shares to merchants, giving them a right to a part of any profits eventually made.

The idea soon became popular and the two coffee shops on the Change Alley - Garraway's and Jonathan's - became centers of the trade in shares.

Couple years later, the practices got regulated by law by publishing the prices of stocks and commodities called The Course of the Exchange and other things as well as by the document preventing from insider trading and requiring all brokers (makler) to be licensed and act lawfully.

In the whole XVII century the Change Alley exchange thrived. However, it started to suffer in XVII century. At first, because of the so called South Sea Bubble (bubble - gwałtowny wzrost cen; bańka spekulacyjna) that caused sudden share prices fluctuations. Then, the burning down of Johnathan's and the overcrowding in the Alley made the brokers build a New Jonathan's on Threadneedle Street.

Later, the exchange moved to the newly built Capel Court. The trade in shares had recovered by the 1820s thanks to the growth of the railways, canals, mining and insurance industries. Regional stock exchanges were also formed across the UK and bonds (UK: gilt-edged securities) began to be traded.

In Threadneedle Street traders met face to face to conduct business. However, the Big Bang on 27 October 1986, which deregulated many of the Stock Exchange's activities. It allowed securities firms to act as brokers and dealers and increased use of computerised systems that took precedence over face to face trading.

In July 2004, the London Stock Exchange moved again from Threadneedle Street to Paternoster Square close to St Paul's Cathedral which is the current premises of the LSE. The new building contains a specially commissioned dynamic sculpture called "The Source", by artists Greyworld.

Since 2005, the LSE has regularly been pursued by prospective merger partners. However, it rejected the offer of Australian Macquarie Bank and repeated bids of the NASDAQ (National Association of Securities Dealers Automated Quotation System) - the American Stock Exchange (!). Nevertheless, after persistent attempts, NASDAQ manage to take over the shares of the largest shareholder Ameriprise Financial's Threadneedle Asset Management unit and was regularly buying even more, resulting in a total stake of 28,75%.

At the end of 2006 and the beginning of 2007, NASDAQ made an attempt to take over the LSE by seeking 90% of shares and then, after the failure, decreased its claim to 50% (plus one share). However, this offer was not satisfactory to the rest of LSE shareholders, who rejected it in the end.

In August, 2007, NASDAQ announced that it was abandoning its plan to take over the LSE and subsequently look for options to get rid of its 31% (61.3 million shares) shareholding in the company. Finally, it managed to sell 28% of them to Arabian Borse Dubai, which currently is the main shareholder of the LSE.

Structure

The Exchange has four core areas:

-> Markets The Exchange enables companies from global giants to smaller enterprises around the world to raise the capital they need to grow, with a choice of four primary markets: Main Market - international equities market for larger, more established companies across all sectors; regarded as the world's most prestigious listing and trading environment. The Main Market has around 1,800 companies with a total market capitalisation of more than £3,500bn. Alternative Investment Market (AIM) - equities (udział w kapitale spółki) market for smaller growing companies. There are more than 1,060 issuers listed on AIM with a combined market capitalisation of £37bn. Professional Securities Market (PSM) - for listed debt and depository receipt securities Specialist Fund Market (SFM) - which is dedicated to specialised investment entities -> Trading services The Exchange provides a highly active and efficient market for trading in a wide range of securities, including UK and international equities, debt, covered warrants, exchange traded funds (ETFs), reits, fixed interest, contracts for difference (CFDs) and depositary receipts. -> Market data information Thanks to the most modern technology, the LSE provides high-quality, real-time prices, news and other financial information to the global financial community  -> Derivatives The derivatives business is a pioneering diversification beyond the core equity markets. A major contributor to the derivatives business is EDX London, created in 2003 to bring the cash equity and derivatives markets closer together.

Indices (indexes) and main companies

The most prominent index is FTSE (Financial Times Stock Exchange)100 Index. It is a

share index of the 100 most highly capitalised companies listed on the LSE, which are also known as “blue chips”. The companies with a market capitalization over Ł10 billion are, among others: Royal Dutch Shell, BP, HSBC, Vodafone Group, Glaxo Smith Kline, British American Tobacco, Tesco, Barclays plc, Lloyds TSB, Unilever and Cadbury Shweppes. In general, FTSE 100 is dominated by three major sectors: banks, oils and pharmaceuticals.

Subsequent index is FTSE 250 Index which lists the mid-sized companies, from 101^st to 350^th according to the criterion of capitalisation, mainly in the areas of technology, building and construction and media.

FTSE 350 Index combines FTSE 100 and FTSE 250, listing together all 350 of the largest companies.

There is also FTSE All-Share Index which measures the performance of all the shares listed on the London Stock Exchange's main market. So it includes the FTSE 100 companies and other smaller companies in a variety of industries.

There are also a wide variety of other indices that measure the performance of specific sectors.

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