Goodbye, cosy world Big Bang's impact on that most hallowed of City institutions -- British gilts -- is set to be as dramatic as on any of London's financial markets. To a market dominated by two jobbing firms and in which deals are still handwritten into the jobbers' ledgers and prices altered by pencil, the new rules to be introduced on October 27 will totally transform this cosiest of worlds.
On that day, the traditional practice of single capacity dealing by jobbers and brokers will vanish and be replaced by a system in which both functions are merged into what is known as the dual capacity method. With it goes the much vaunted principle of separating the two functions plus that of fixed commissions to brokers which, it is said, has kept the market "gentlemanly and uncompetitive".
In its place, the Bank of England, which oversees the government bond market, has authorised 27 well capitalised primary dealers and six interbroker dealers to compete for this 15 billion pounds sterling a year business. Of the new line-up, half the gilts dealers will be British owned while the remainder are now in the hands of notable commercial banks and securities houses from the US, Canada and Switzerland (see page 28).