Mechanics of Change

Abstract

In September 1983 the Senior Partners of all Member Firms were approached by the Chairman and asked to comment on the way in which fixed rates of commissions might be removed. He suggested a number of alternatives:

• to introduce negotiated rates by class of security (e.g. overseas securities, traded options, gilts etc.)

• to follow the US example, where commissions on larger bargains were reduced in stages, phased by the size of the transaction, until all commissions were at discretion

• to introduce upper and lower bands of negotiated commission, leaving a central band of fixed rates, and increasing the band widths in stages until they met.

• a gradual annual reduction of scales throughout the period to December 1986.

• permission to offer discounts against the present rate, the percent-age discounts increasing in three stages to full discretion.

• a single specific date on which negotiated rates of commission ‘across the board’ would take place, now colloquially called the ‘Big Bang’.