A frank exchange Article icon


When the Occupy London movement wanted to demonstrate against rising economic inequalities, it initially chose the London Stock Exchange in Paternoster Square, in the shadow of St Paul's Cathedral, as the location for its protest against the City. Victoria Brough, director of communications at the exchange, was unsurprised.

'Wall Street is an iconic brand but in London we don't have a brand that symbolises the City. The London Stock Exchange is the default position,' she says. 'We're not a bank but we're part of the financial sector. And we're a high profile business. There is not a single day when we are not in the news.'

Brough was unperturbed by the Occupy London movement, arguing that the protestors have the right to demonstrate, but, as they arrived shortly after the London riots, her main focus was on staff safety and contingency plans in case employees couldn't get to the office.

But Occupy London is not alone in considering the London Stock Exchange as the heart of the City. Indeed, last month it emerged at the High Court that plans by Islamic militants to place a bomb in the toilets of the London Stock Exchange had been thwarted by counter terrorist intelligence: other targets included the London Eye, American Embassy and other prime London tourist sites. 'Whether it is Occupy London or other security issues, it is always staff that is front of mind,' she adds.

And every day Brough and her colleagues receive at least one request from a journalist or photographer keen to see the cut and thrust of a trading floor. But the reality is that the traders departed with the advent of Big  Bang in the late 1980s, which deregulated financial markets and led to electronic, screen based trading. There is no loud bell that sounds the start of trading hours, a la the New York Stock Exchange, although last May a new 'market open' ceremony was launched which involves the descent of a three foot wide illuminated globe with over 500 high definition LED screens. Money can't buy the chance to press the button. 'We're hoping to do things around the Olympics with the ceremony,' adds Brough.

Changing priorities

Today's exchange, on which more than 3,000 companies are listed, represents but 13 per cent of the business that makes up the London Stock Exchange. Following a series of acquisitions and a rejuvenated business plan over the past three years, developed in part to assuage clients who had complained about its lack of investment and dynamism and were looking to develop competing systems, the group now also offers electronic trading platforms, financial information and databases.

But obviously the role for which it is best known is the platform to allow companies to list their shares and raise finance to support their businesses. The London Stock Exchange is itself listed on its own exchange although it flirts with the margins of the premier FTSE 100 index of the 100 companies with the largest market capitalisations.

Still, it's premier in other ways. 'We're number six on the Business Superbrands list,' says Brough proudly. 'We're behind Apple and ahead of PricewaterhouseCoopers. It is a real privilege to work here. You can ring anywhere in the world and say It's the London Stock Exchange and nobody ever says Who?' In part, this global recognition is due to the heritage of the London Stock Exchange and the UK's historic role in international trade. For many chief executives around the world, it is a lifetime's ambition to list on the exchange. 'That recognition and appreciation doesn't happen overnight,' says Brough. 'London is at the centre of capital markets. It is a flagship exchange.'

It has been a baptism of fire for Brough since she joined in September 2010 from Thomson Reuters. Five months later the LSE announced a £2.3 billion merger with TMX Group, owners of its Toronto counterpart, to create the seventh biggest exchange in the world. 'They never said it, but I do wonder if my experience dealing with Canadian companies played a part in me getting the job,' she muses.

The move prompted NYSE Euronext to announce its planned merger with the Deutsche Bourse, sparking intense media debate about consolidation in the sector. Six months later the LSE/TMX deal collapsed due tolack of shareholder support, while the European Union has just vetoed Germany's transatlantic tie up.

Non stop action

But the London Stock Exchange was not about to relax. Last September, it entered exclusive talks to acquire clearing house LCH. Clearnet, described as the plumbing of the financial sector which ensures the successful completion of trades (in effect, making sure the buyers and sellers fulfil their obligations), which is now the largest part of its business. It then snapped up the Financial Services Authority's Transaction Reporting Service, which was swiftly followed by the acquisition of media group Pearson's 50 per cent stake in FTSE International to take full control of the index firm and provide a new platform to ramp up its fast-growing derivatives business.

'It's been non-stop. I've never been so busy,' concedes Brough, whose remit has expanded since her appointment to encompass internal communications, brand, sponsorship, public affairs and media relations. She also works closely with colleagues in Milan-based Borsa Italiana, which the exchange acquired in 2007, and Sri Lanka, where it owns a technology services company. 'The language of our business is English, but there has always been an assumption that the Anglo Saxon way is the right way and I am not sure that it is. We never take a bulldozer approach to our communications and are culturally sensitive wherever we operate,' she adds. There's also the perennial debate about financial regulation, the ongoing economic environment and the constant clamour for comments about the trading results of companies listed on its exchange - a request that is always declined.

'We act as a voice for the City,' says Brough. 'We have publicly lobbied for the rebalance of debt and equity. Equity is taxed four times but debt isn't, but while it may be cheaper to borrow debt it is not as flexible as a funding tool.'

Brough also works closely with chief executive Xavier Rolet who is passionate about making the capital markets accessible to small and medium enterprises (SMEs). 'He believes that the LSE has a valuable role to perform in this area,' she explains. 'It is essential that public capital markets support SMEs, who are innovators and drivers of economic growth.'

Key to this strategy was the launch of the Order Book for Retail Market (ORB) marketplace in February 2010, which allows SMEs to raise money through debt instruments targeted at retail investors. Housing association Places for People recently returned with its second £40 million bond, bringing the total raised by organisations on ORB to more than £1.4 billion since launch.

'If every SME took on one more person it would create 4.8 million jobs and cure unemployment,' says Brough. 'Each member of the FTSE 100 would have to take on 48,000 extra staff to have the same effect. If we succeeded in generating one new job in each SME then the effect would be transformative.'