London's stockbrokers were once banned from the exchange for bad manners
In the 17th century, London's stockbrokers were considered too rude to trade inside the Royal Exchange. So they set up in coffee houses nearby, and at one of them a broker began pinning up prices for salt, coal and paper. From that scrappy start grew one of the oldest continuously operating stock exchanges on Earth.
The story begins with the Royal Exchange, created by financier Thomas Gresham and Sir Richard Clough on the pattern of Antwerp's bourse and opened by Queen Elizabeth I in 1571. Barred from it, brokers gathered at Jonathan's Coffee-House, where in 1698 John Castaing started publishing a list of commodity prices and exchange rates a few days each week. The list later moved to Garraway's, where auctions lasted only as long as a stub of tallow candle burned, sales said to be by inch of candle.
After the Great Fire destroyed Gresham's building, it was rebuilt and reopened in 1669, drawing trading back from coffee houses towards a more regulated market. Unlicensed dealers were a headache, so a 1697 Act of Parliament imposed harsh financial and physical penalties on anyone broking without permission and capped licensed brokers at 100, later raised. The cap pushed many traders out into Exchange Alley near the Bank of England, which Parliament tried to clear. Wary of speculative bubbles that soared and burst, traders also lobbied for a ban on unchartered companies.
Business surged again after the Seven Years' War ended in 1763. In 1773 Jonathan and 150 other brokers formed a club and opened a more formal Stock Exchange in Sweeting's Alley, charging an entrance fee. Trading also continued in the Bank of England's Rotunda, and fraud remained common. Proposals for higher fees met resistance, so the exchange eventually became a subscription room with annual dues. The modern institution dates its founding to 1801.
Today the exchange sits in Paternoster Square in the City of London and has been run since 2007 by the London Stock Exchange Group. It lists over 1,900 companies from more than 60 countries, with a Main Market for established firms and the Alternative Investment Market for smaller growing ones. It is a major hub for depositary receipts from India, China and the Middle East, and holds the world's largest concentration of mining capital, about 13 percent of the global sector.
Source: London Stock Exchange
