London Market Expands, but Not With a Bang

LONDON — The much-heralded Big Bang deregulation of the London Stock Exchange began with a whimper today as a 70-minute computer snarl at the start of trading marred the historic change.

A half-hour before the 9 a.m. start of official business, computers vital to the new high-technology system of price quotations went down. They came back up briefly and went down again until they were restored just before 10 a.m.

During the breakdown, dealers--some banging on their new computer screens in frustration--were unable to enter prices or register deals.

But despite the problems, the market moved ahead, with the Financial Times 500-share Index up 8.4 points by mid-morning.

Trading Extended

With the Big Bang, trading in the City of London, the capital’s one-square-mile financial district, was extended beyond the floor of the Stock Exchange on Old Broad Street to hundreds of computer screens in the offices of dealers.

When working, the screens carried instant information about stock price movements for brokers and financial institutions to deal in by telephone.

During a year of preparation, the Big Bang has drawn American and other foreign securities companies into the new era of competition in the City.

“The Big Bang is definitely a whimper to start with,” said Jeff Preen, a senior dealer with brokers L. Messel & Co., a wholly owned subsidiary of the American securities giant, Shearson Lehman Brothers International.

Millions in Equipment

He spoke as he surveyed his company’s packed dealing room filled with the multimillion-dollar equipment Messel bought to join the inauguration.

Fixed commission rules were scrapped and many brokers were ready to cut charges to clients from the previously fixed 1.65% commission to 1%.

The millions of dollars invested in buying up British brokerage and jobbing firms and installing the new technology to speed securities trading is largely designed to keep London ahead in dealing in British stocks that have global attraction--business that might otherwise have slipped to New York and Tokyo.

Clubby era ends, Part IV, Page 1.