Historical Stages

1808 - 1814
The foundation of the Milan Securities Exchange

The vice-royal decree promulgated by Eugenio Napoleone on 16^th January 1808 inaugurated Milan’s Borsa di Commercio (Commodities Exchange), which opened at the Monte di Pietà.

A year later, the head office was transferred to Palazzo dei Giureconsulti in Piazza Mercanti.

Before the foundation of the institution under Napoleonic law, public securities had already been exchanged and sold in Milan, just as in other major Italian cities.

The innovation that the Napoleonic Code of Trade brought to Italy was the public nature of the Exchange, which remained a feature of the Italian financial market up until 1998.

This set it apart from the “Anglo-Saxon” system in which stock exchanges are formed by the association of independent brokers.

In June 1813, the number of brokers was established by decree, and likewise their commissions for each operation.

1815 - 1859

The Austrian Restoration

When the Austrians returned, the institution of the Securities Exchange was confirmed by an imperial decree in May 1816.

The Chamber of Commerce retained the powers that had been attributed to it by the institutional decrees of 1808, while the direct election of the Exchange President by the brokers never took place.

The figure continued to be nominated directly by the chamber of Commerce, often from outside the category of brokers.

In 1859, the first company share was listed, for the Società Ferroviaria del Lombardo Veneto (Lombardy-Veneto Railway Company).

1860 - 1913
The Stock Exchange in the new kingdom of Italy

In 1861, the volume of securities traded at Milan’s stock exchange increased greatly, above all because of the enormous volume of public debt securities issued by the Italian Government to finance the unification of the country.

In the 1870s, shares for the earliest railway companies and many banking institutions appeared. Manufacturing companies, on the other hand, remained absent from the exchange for several decades. Their relatively small size enabled them to plan their growth utilizing purely their own financial resources. Only towards the end of the century did the country’s rapid industrial development induce the manufacturing sector to locate financial resources on the Stock Exchange. The number of shares listed in Milan increased from 23 to 54 between 1895 and 1900, reaching 160 in 1913.

In 1901, the construction of Palazzo Broggi in Piazza Cordusio was completed. For 30 years, this was the location of the Stock Exchange.

In 1913, Law n° 272 of 30^th March was passed, regulating the functioning of the Stock Exchange. The legislation specified rules regarding supervision, control and management, subdividing the responsibilities amongst the respective Ministries, Chambers of Commerce, Brokers’ Associations and Exchange Representatives.

In the 19^th century, Stock Exchange institutions appeared in many locations throughout the country, in a number of trading cities. The major exchanges were those of Genoa, Milan, Turin, Florence and Rome. In the early years of the 20^th century, the geographical structure of Italian finance changed radically. Rome acquired importance to the detriment of Florence, while Milan overtook Genoa as the principal market for the country, in part due to the relatively high number of industrial shares listed.

1914 - 1945
Piazza degli Affari is built

During the 1920s, the ever-increasing volumes of trade meant that Palazzo Broggi became too small for its purpose. In 1928, architect Paolo Mezzanotte was given the commission to design a new stock exchange building. It was inaugurated four years later, in a new, completely refurbished square: Piazza degli Affari (literally, ‘Business Square’) thus came into existence. The Palazzo comprised furnishings also designed by Mezzanotte, majolica ceramics decorated by Gio Ponti, and all the latest technology of the time (telephone booths, and a mechanical trading board).

In the years between the two World Wars, the Italian stock markets, like their international counterparts, went through violent oscillations, with euphoric upswings and dramatic downturns.

After the end of the First World War, the volumes of securities traded increased strongly, a situation that continued up until the 1929 crash. In the early 1930s, state intervention launched to save the bank system led to the cancellation of bank shares from the exchange.

In the late 1930s, the regime’s urgent financial necessities caused by military expenses caused a massive drain of resources from the stock market. The country’s entry into the War and the state of emergency led to the provision of solely nominal shares. From 1942 to 1945, Piazza degli Affari continued to operate at drastically reduced rates, even during the air-raids.

1946 - 1962
Reconstruction and recovery in trading

After post-war reconstruction, trading activities recovered in the space of just a few years, and the 1950s saw a long period of expansion, during which the total number of listed shares grew strongly, accompanying the generalized boom in the Italian economy.

The number of listed companies remained substantially constant, with an increasing proportion of insurance, financial and electrical companies. In 1954, during a marked rise in share prices, the general share index passed the 4,000 mark.

During the frenetic boom of the 1950s, back office functions were still performed basically by hand, a system that was no longer viable considering the volumes of business. Trading, the verification of contracts made during the day, the recording of prices attained and the compilation of official price indices were all performed manually, a very laborious process. In 1961, a number of Milan exchange agents backed the creation of the CEB, Centro Elettronico Borsa (Electronic stock exchange centre), the first step towards automatic data handling and processing.

1963 - 1974
Milan, financial capital of Italy

In the early 1960s, expansion of the Italian economy slowed down. The rise in inflation and the negative trend in the balance of payments reversed the growth cycle, while the State’s growing intervention in the economy tended to depress business at the Stock Exchange. In this period, safe assets such as state securities and gilts became more important with respect to the share market.

In 1964, the earliest investment funds, established in Luxembourg, appeared in Italy.

In 1967 the Professional Guild of Exchange Agents was instituted, and, seven years later, Law n° 216 came into effect, which instituted Consob (National commission for companies and the stock exchange) and introduced company law reform.

During the 1970s, Milan became increasingly dominant amongst the national network of securities exchanges. Banks adopted the technical equipment necessary for centralized order management, and they began channelling all operations to a single exchange, which in most cases was that of Milan.

1975 - 1991
The creation of the restricted stock system and the enhancement of service structures

In the late 1970s, considerable efforts were made to counteract the unfavourable Italian and international economic climate. In 1977, after the share index had dropped to its lowest value since the end of the Second World War, the tax credit system was adopted in order to encourage trading. This ended the dual taxation on revenue. The Restricted stock system was formed to extend the range of listed shares.

Trading volumes began to grow considerably once again from 1983, the year in which mutual investment funds were introduced, which had a doubly beneficial effect on the Stock Exchange. In first place, in order to constitute their own securities portfolios, the funds conducted massive purchasing operations, which pushed up share prices. In second place, the availability of these new financial instruments began to reach a far wider sector of investors with respect to those who had been operating directly on the share market.

In 1985, the mechanical trading board that had been used to display prices since 1932 was replaced by a modern electronic board. In 1978, Montetitoli was founded, a company for the centralized custody and administration of securities. These two structures paved the way towards the dematerialization of securities and the adoption of electronic trading.

1992 - 1997
Telematic technology and dematerialized trading

Law n° 1 of 2/1/1991 initiated an intense process of reorganization and development in financial markets. Exchange agents lost their monopoly for stock exchange contracting, and Securities trading companies (Società di intermediazione mobiliare, SIM) were formed. The management committees for the various stock exchanges in Italy were dissolved, and a Stock Exchange Board was formed in Milan. The Board, which represented all players on the market (Bank of Italy, securities trading companies, banks, Chambers of Commerce), had the role of unifying trading at a national level and launching the privatisation of the securities market.

From 1992, the privatisation of state companies injected massive financial resources into the Italian market, contributing to an increase in capitalization. During this period, the State sold sizeable quotas of companies already listed, such as the principal national banks (Banca Commerciale Italiana, Credito Italiano), and a number of previously unlisted State organizations, such as INA and ENI, were floated.

In 1992, the Cassa di Compensazione e Garanzia (“Compensation and Guarantee Fund”) was created with the objective of protecting share markets.

In 1994, the transition to electronic trading, initiated in 1991, was completed.

1998 - Today
Borsa Italiana at the heart of European finance

In 1998, the process of privatisation – the transition from the Stock Exchange Board, still public, to a private capital stock company – was completed: Borsa Italiana S.p.A. was founded.

Privatisation gave Borsa Italiana all the instruments necessary to develop the markets under its responsibility, in order to acquire the appropriate competitive positioning and face the challenges of globalization. Over the following years, Borsa Italiana began expanding its business operations, providing a wider range of services for the Italian and international financial community. This led Borsa Italiana to cover the entire value chain in the exchange industry: listing, post-trading, information services, training, facility and property management services, and high technology services.

In 2007, Borsa Italiana and London Stock Exchange signed an agreement for the merger of the two companies, creating the largest exchange group in Europe, and laying the foundations for powerful future growth on both a European and an international scale.