It comes hard on reports that the New York Stock Exchange is going the same way.
This week's Economist:
+ The NEW YORK STOCK EXCHANGE, a non-profit concern owned by its members,
is considering floating itself on its own exchange by the end of this
year. Its antiquated structure makes it less able to respond to
regulatory and technical changes, and it risks losing out to smaller
profit-making exchanges.
Doug, I trust, will clarify the technicalities, but presumably this marks the victory of global finance capital over concentrations of cooperative national capital.
This is a further step in posing the question of how the social aspect of finance capital must express itself and be managed socially. Onto the world regulation of finance capital!
Here follows the FT report on London. This could be the end of the gentleman's capitalist club as we have known it. Perhaps it will become a mere tourist site. Shed a tear if you can.
Chris Burford
London
______________________________
FT 30 July 99
London exchange plans to scrap mutual status
By Edward Luce in London and Uta Harnischfeger in
Frankfurt
The London Stock Exchange will
today reveal plans to scrap its
mutual status and turn itself into
a shareholder-owned company -
in response to the technological
revolution sweeping through the
world's equity markets.
The announcement, which will
surprise many of the exchange's 294 member firms,
follows similar statements last week by the New York
Stock Exchange and Nasdaq, the screen-based US
exchange.
The LSE decision ends more than 200 years of mutual
status and is the biggest change at the exchange since
the "big bang" of 1986, which scrapped minimum
commissions for stockbrokers.
It coincides with mounting concerns about the slow
progress of talks between the LSE and the Deutsche
Börse in Frankfurt towards the creation of a European
super-exchange.
The pan-European alliance, which would be led by the
LSE and the Deutsche Börse, was launched last July
and encompasses eight European exchanges.
Gavin Casey, chief executive of the LSE, said yesterday
that the plan to demutualise the exchange would require
approval from at least 75 per cent of members. It would
not directly affect the talks with Frankfurt.
The move comes in the wake of growing competitive
pressure from electronic quasi-exchanges, known as
electronic communications networks (ECNs).
The ECNs have aggressively undercut the costs of
traditional exchanges and won a large share of the
market in the US. They are planning to launch an assault
on the European equity market.
Unlike the NYSE, London does not plan a full public
offering. Shares will be distributed to members and will
be privately traded. "The move will enable us to compete
more aggressively with the ECNs," said Mr Casey. "It will
also enable us to take decisions more quickly and
efficiently."
Mr Casey added that the move, which could take several
months to push through, could even enhance the LSE's
ability to co-operate with the Deutsche Börse on building
a pan-European equity platform.
However, officials in Frankfurt and bankers in London
said that progress in the talks had almost ground to a
halt - even though both exchanges yesterday denied
reports that the alliance had fallen apart.