What Is a Jobber?
A jobber is a slang term for a market maker on the London Stock Exchange prior to October 1986. Jobbers, also called "stockjobbers," acted as market makers. They held shares on their own books and created market liquidity by buying and selling securities, and matching investors' buy and sell orders through their brokers, who were not allowed to make markets. The term "jobber" is also used to describe a small-scale wholesaler or middleman in the retail goods trade.
Little is known about jobbers' activities because they kept few records, but in the early 19th century, London had hundreds of jobbing firms. Jobbers' numbers declined dramatically over the course of the 20th century until they ceased to exist in October 1986. This month was when the "Big Bang," a major shift in the London Stock Exchange's operations, occurred. London's financial sector was suddenly deregulated, fixed commissions were replaced by negotiated commissions, and electronic trading was implemented.
This jobber system evolved into a recognizably modern form during the course of the 19th century, as the range of securities types broadened. At least half the members of the London Stock Exchange began to specialize in making a continuous market in one of the leading types of these securities. The distinction between these market-makers, or jobbers, and the brokers who dealt with them on behalf of the public was a clear-cut one, but was essentially based on custom and tradition until 1909, when single capacity was formally embodied in the London Stock Exchange rules. By 1914, over 600 jobbing firms were in existence, along with many one-man jobbing operations.
Those numbers steadily declined as the institutional investor supplanted the private one, and the scale of required jobbing capital increased dramatically. By the eve of "Big Bang," there were only five major jobbing firms on the floor of the London Stock Exchange, though this numerical decline did not necessarily denote a decline in the marketability provided by the system.
History of Jobbers
Jobbers left few records of their affairs. Neither journalists nor other observers retained much in the way of detailed accountings of their work. Histories of banks, stockbroking firms, and other concerns have been and will continue to be the basis of any historical record relating to jobbers. The Centre for Metropolitan History has compiled an archive of interviews with former jobbers which serves as a permanent record of the last half-century of a distinctive part of the financial life of London.