UK Stock Exchange Explained: How the London Market Really Works in 2026

A 300-year history that still shapes today’s market

The London Stock Exchange did not begin with a government act or royal charter.

It began with coffee.

In 1698, stockbroker John Castaing started publishing prices for shares and commodities at Jonathan’s Coffee House in the City of London. This informal price list created trust – and trust created a market.

By 1773, brokers had formed a more organised club. In 1801, they moved into a purpose-built exchange at Capel Court and published the first rule book.

Key moments that still echo today:

• 1830–1870: Telegraphs and ticker tape revolutionised price speed
• 1940–1945: The Exchange survived bombings during WWII
• 1972: Move to the 26‑floor Stock Exchange Tower at 125 Old Broad Street
• 1986: The “Big Bang” deregulation replaced floor trading with screens
• 2007: Merger with Borsa Italiana created London Stock Exchange Group
• 2021: Completion of the £27bn all‑share acquisition of Refinitiv

That last point explains why today’s LSE looks less like a shouting trading floor and more like a technology company.

UK stock exchange rules and regulation in 2026

Every firm trading on the London Stock Exchange must follow the Rules of the London Stock Exchange, enforced alongside UK regulators such as the Financial Conduct Authority (FCA).

Since Brexit, the UK has retained much of the MiFID framework but now adapts rules domestically. In practice, this means:

• Strict requirements for market abuse and price manipulation
• Mandatory reporting and record‑keeping of trades
• System resilience testing for member firms
• Clear rules on halts, auctions, and exceptional volatility

The rulebook is structured around membership, conduct, systems, fees, and enforcement. For most retail investors, these rules operate invisibly – but they are the reason UK markets remain trusted globally.

London Stock Exchange trading hours (2026)

The London Stock Exchange is fully electronic. There is no public trading floor.

Standard trading hours:

• Monday to Friday: 8:00am – 4:30pm (London time)
• Opening auction: 7:50am – 8:00am
• Closing auction: 4:30pm – 4:35pm

The exchange is closed on UK bank holidays, including Good Friday (3 April 2026) and Easter Monday (6 April 2026). On Christmas Eve and New Year’s Eve, markets close early at 12:30pm.

What the FTSE 100 actually measures

The FTSE 100 is often treated as “the UK economy”. That’s misleading.

Launched in 1984, the FTSE 100 tracks the 100 largest companies listed in London by market capitalisation. As of January 2026, it represents roughly 80% of the total market value of the LSE.

But here’s the twist:

More than two‑thirds of FTSE 100 company revenues are earned outside the UK. Energy, mining, pharmaceuticals, and global banks dominate the index.

That’s why the FTSE can rise when the UK economy struggles – and fall when Britain is doing fine.

The index is reviewed quarterly in March, June, September, and December. Larger companies carry more weight, meaning a handful of giants can move the entire index.

Other UK stock market indices you should know

The FTSE 100 is only the surface layer.

• FTSE 250: Mid‑sized UK‑focused companies (often more tied to the domestic economy)
• FTSE 350: FTSE 100 + FTSE 250 combined
• FTSE All‑Share: Around 98–99% of UK market capitalisation
• FTSE SmallCap: Smaller established companies
• AIM indices: FTSE AIM UK 50, AIM 100, AIM All‑Share

If you want a snapshot of how UK‑focused businesses are doing, the FTSE 250 often tells a more honest story than the FTSE 100.

Why the UK stock exchange still matters in 2026

London no longer dominates global equities the way it once did.

Yet the UK stock exchange remains critical because it specialises in:

• International capital raising
• Energy, mining, and financial services listings
• Global clearing and risk management via LCH
• Market data used by governments and banks worldwide

In other words, the LSE is less about excitement – and more about reliability.

And that reliability quietly underpins everything from UK pensions to mortgage rates.

The next time you hear that “the FTSE closed up 50 points”, remember: you’re not hearing about a scoreboard.

You’re hearing about the pulse of a system that’s been refining trust for more than three centuries – and is still adapting in 2026.