Although the broker may, by the circulation of prospectuses, give a
gentle hint to his clients that there is business afoot; although,
indeed, he may, and in many cases does, send them circulars, and price
lists, and newspapers every night; it is only amongst his own clients
that he is allowed to advertise in this or any other way. He usually
keeps this rule most rigidly, in the spirit as well as in the letter,
and he is aided in so doing by the watchfulness of the Committee. For
this reason, some members of the Stock Exchange--for the rule against
advertising applies to the jobber as well as to the broker, although the
jobber has naturally less temptation to advertise--show much repugnance
even to their names appearing in the newspapers in any connection
whatever, though it may be quite apart from business, and some are even
chary of announcing a mere change of partnership, or a removal of
offices, lest it might be construed as an advertisement.
Meantime, brokers who are not members of the Stock Exchange--outside
brokers, they are called--flood the newspapers with advertisements of a
description so flaring as to rival or surpass those of the patent
medicine vendors; and partly to counteract the competition thus arising,
the Committee of the Stock Exchange has a standing advertisement in all
the principal papers announcing that members of the Stock Exchange are
not allowed to advertise, that those who do advertise are not members of
the Stock Exchange, and that lists of those members who are brokers--it
is no use furnishing the public with the names of the jobbers--may be
obtained from the Secretary on application. A list may also be seen at
one of the entrances of the Bank of England--a relic, perhaps, of the
time, when the Rotunda of the Bank of England was practically a Stock
Exchange. There are a few firms of outside brokers of the highest
standing, possessing businesses superior in magnitude and status to
those of the great majority of Stock Exchange firms. Such firms as these
in former years brought a considerable volume of business to the Stock
Exchange itself, obtaining orders from their clients by more
enterprising methods than the members themselves were permitted to
employ under their rules, and passing the business on to brokers who
were members. In its stringent rules regarding brokers' commissions,
however, the Stock Exchange Committee has now practically abolished this
practice by specifically penalising outside brokers.
Public-domain text, read in full here on John Shaqi.
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