P228 CJEFAX 228 Mon 27 Oct 21:13/26 1/6 THE BIG BANG Anzonj looking for pyrotechnics in the City today would do better to wait for Guy Fawkes Day. For the much-vaunted Big Bang, while an historic step, is only one event in a whole series of changes in the way the City's financial markets operate. It is, too, something that will bj of immediate concern only to the City and the people who work in it. Its impact on the small investor must be considerable in the long run. But what that will amount to is not clear. MONEYFILE Index 220P228 CJEFAX 228 Mon 27 Oct 21:14/27 2/6 THE BIG BANG Blame the Boffins The spark that will ignite the Big Bang - and the fuse has been burning more than three years - is technological. The agreement (to abolish fixed dealing rates* signed by the Stock Exchange's Sir Nicholas Goodison and the Trade Secretary, Mr Cecil Parkinson, in July 1983 was prompted by growing commercial pressures that were in turn the product of technological changes. Securities business around the world was becoming "globalisjd" and London was in danger of losing out. MoreP228 CEEFAX 228 Mon 27 Oct 21:17/27 3/6 ] THE BIG BANG Getting Globalisjd The trend towards a 24-hour trading day centred on the three great financial centres of New York, Tokyo, and London, makes a nonsense of national barriers. It also demands considerable resources on the part of dealing firms able (a) to afford the necessary electronics and (b) to compete with the foreign giants. It is to this end that today marks the abolition bz the Stock Exchange of both its minimum commissions structure and its long-running "single capacity" dealing system. MoreP228 CEEFAX 228 Mon 27 Oct 21:21/28 4/6 THE BIG BANG Streamlining the Dealers New York, where "djregularisation" had already become an article of capitalist faith, scrapped fixed commissions on May Day 1975. London had to follow suit if it was to compete on international business. The abolition of its "single capacity" system, which distinguished between brokers and jobbers, proved to bj more controversial. Again, economic considerations overrode worries about a conflict of interest. MoreP228 CEEFA( 228 Mon 27 Oct 21:13/20 5/6 THE BIG BANG Opjnjng the Doors Dual capacity will see Stock Exchange mjmbjr firms acting as broker/dealers (buying and selling shares on their own account) and in some cases as market- makers as well. Among them will be the foreign "anus and investment houses whose newly-won mjmbjrship of the Exchange represents the Big Bang's third major upheaval. Some have bought existing member firms, bringing the financial muscle needed in a "globalisjd" market. Others, such as Japan's Nomura, are going it alone. MoreP228 CEEFAX 228 Mon 27 Oct 21:11/57 6/6 THE BIG BANG Proof of the Pudding Most of the talk about the Big Bang is to do with the professionals. What of the small investor? Here, if the Wall Street example holds, commission rates may even increase. Only at the no-frills end should real benefits emerge, and then largely bz vjrtuj of the boffins. Next year sees the launch of SAEF, the computerisjd execution of small orders, promising a sharp drop in charges. More