The Development of Exchanges around the World

The emergencce and development of exchanges come from demands for investment and trading.

The earliest stock market emerged in the Netherlands in 1602.Booming maritime trade attracted capital inflows and simulated investment demand. Due to lack of a complete stock market, local traders began to engage in stock broking business sporadically. In order to better finance and expand wealth, Netherlands and East India Company set up the world's first stock exchange, which is Amsterdam Stock Exchange. (AEX Amsterdam stock exchange)

Later in the 17th century, brokers separated from London Royal Exchange and traded in cafes in the city. In 1773, London stock brokers formally established an exchange in a café, which is the precursor of London Stock Exchange.

In 1792, 24 traders with highest trading volume in USA agreed to engage in security trading every day under a buttonwood tree and formulated a series of trading standards, which is known as buttonwood agreement. It was the earliest stock market in the United States and the predecessor of the New York Stock Exchange. The organization drafted its constitution in 1817 and named itself the "New York Stock & Exchange Board”. A concentrated stock market was basically formed.

At present, the following four exchanges have active trading and profound influence.

1. New York Stock Exchange, NYSE

New York stock exchange is the world's largest exchange by market capitalization and listed companies’ total market capitalization reached $21.3 trillion.

New York Stock Exchange is distinguished by its long history and mature market, listing requirements are strict. Currently, the world's top five hundred enterprises are mostly listed on the New York stock exchange.

2. National Association of Securities Dealers Automated Quotation, NASDAQ

Established on February 8th, 1971, NASDAQ is the world's first electronic trading global stock market and favored by many emerging small and medium-sized companies especially high-tech companies. NASDAQ adopts advanced electronic trading system (ECNs) to provide timely and accurate quotation information. NASDAQ implements a unique dual track system and a market maker system to ensure the interests of listed companies and investors.

3. London Stock ExchangeLSE

As the most international financial center in the world, London is not only the central place of European bonds and foreign exchanges, but also the ideal gateway for investors from all over the world to enter Europe. London Stock Exchange has a foreign stock trading volume well ahead of any other exchanges and accepts more than 2/3 of international stock underwriting business.

4. Tokyo Stock Exchange

The Tokyo Stock Exchange was established on May 15, 1878, as the Tokyo Kabushiki Torihikijo . Although Tokyo stock exchange doesn’t have a long history, it has the world’s third largest market capitalization. It is membership-based and listed companies are dominated by Japanese companies.


Jihua D, Mei C.(2007).Introduction to Securities Investment. Economic Science Press

(2007). History of Stocks. Financial Expo.10
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