Business, Legal & Accounting Glossary
Big Bang 2, on Monday, October 20, 1997, was the start of a switch from a quote-driven system of trading to an order-driven one.
The trading hours of the London Stock Exchange remain unchanged – 8.30 am to 4.30 pm.
The electronic order book ( SETS ) cuts out the middleman, in the shape of the market maker and replaces them with Retail Service Providers ( RSPs ).
The change has reduced the cost of transacting business on the London Stock Exchange with the average spread between prices typically having narrowed.
There could be other savings in the medium to long term. The fact that the new system is electronic should make it easier for stockbrokers to automate their operations, linking electronic dealing with electronic settlement, and reducing paperwork.
This should cut costs and, thus, the average dealing commission.
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This glossary post was last updated: 15th February, 2020 | 2 Views.