Welcome, noble reader, to the enthralling and eye-popping world of the dual-capacity system! If you’ve ever pondered about who holds the power—the stockbroker who buys and sells or the stockjobber who makes it all possible—get ready to dive into an epic tale of financial legend!
Once Upon a Time in the Financial Kingdom
Our story begins in Ye Olde London Stock Exchange, a bustling medieval marketplace of modern financial wizards and witches. In this magical land, until October 1986 (aka D-Day… or Big Bang), two guilds ruled the kingdom: the Stockbrokers and the Stockjobbers.
The Brave Stockbroker 🦸
The stockbroker was like the valiant knight, loyal only to the client. They darted through the front lines, buying and selling stocks while shouting, “Buy low, sell high!” They wielded the holy grail of client interests and commission fees!
The Enigmatic Stockjobber 🧙
Ah, the stockjobber (picture a mysterious financial Merlin). This wise sage stood at the center of the action, influencing the stock prices with their magical powers of supply and demand. Transacting with stockbrokers, these wizards ensured liquidity through their intimate knowledge of market spells!
Enter the Two Realms: Dual-Capacity vs. Single-Capacity
Through the ages, the financial kingdom split into two dimensions—the dual-capacity system and the single-capacity system. Let’s conjure up some wisdom to break this down:
Dual-Capacity System 👯: Think of it as the classic “division of powers.” Here, the stockbroker and the stockjobber remain independent entities living in harmony. The broker serves the client, while the jobber handles the greasy inner workings of trades.
Single-Capacity System 🦸♂️🧙: The financial Big Bang of 1986 saw the fusion of stockbroker and stockjobber roles into one mega-firm universe known as market makers! Shock! And awe!
graph TD;
A(Stockbroker) --> B((Client));
B --> C((Stockjobber));
C --> D((Market Trades));
A -.-> D
Big Bang: The Legendary Fusion
October 1986: The Shake-up
Picture an epic battle scene. The London Stock Exchange decided: “Enough with the split personality!” And WHOOSH—it merged the stockbroker and jobber into composite entities: the market makers.
Now, our brave broker-knight and wise jobber-sage became superheroes united! Firms could now blend both roles, championing both order-book trading and client interest in One.
The Moral: Know Thy Capacity
For you, ambitious reader, grasping these concepts is sculpting your financial Excalibur! Whether ye be stockbroking or market making, the history of your trade holds precious lessons.
Did You Know?
- 🌟 Pre-1986: Brokers could only shout trade prices. Post-1986, words became golden whispers!
- 💼 Stockjobbers were rare beings of pure trading mystique, akin to the legendary Phoenix.
- 📈 Market makers transformed the trade realm into marvelous efficiency!
Over to Ye: Test Chapter
To test your mettle, we present you with challenges decreed ‘QUIZZES’—may you master them with honor! 🏆
