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	Industry Timeline 1950s |  1960s |  1970s |  1980s |  1990s |  2000s Securities Finance, the Financial Markets and Technology: An Integrated History of Innovation We view this timeline as one way to illustrate our belief that securities finance activities are an integral part of modern financial markets, and have their root in some of the key financial and technological events of the second half of the 20th century. The three categories highlighted in the timeline - industry, technology and market benchmarks - reflect the concept that the evolution of the financial industry has been increasingly enabled by advances in technology, and the development of both has led to the growth of securities finance. NOTE: State Street Events, Milestones and Benchmarks are highlighted in blue. 1950s       1952 -   Key Industry Event Harry Markowitz, the father of modern portfolio theory, publishes his pioneering work in Portfolio Selection: Efficient Diversification of Investments 1958 -   Key Industry Event Welfare and Pension Disclosure Act mandates full disclosure of the operations of any private pension plan     Technology Milestone First integrated circuit is produced Back to top 1960s       1961 -   Market Benchmark Average daily volume on the New York Stock Exchange (NYSE) exceeds 4 million shares, nearly triple the level immediately following the war 1964 -   Key Industry Event The capital asset pricing model (CAPM) is introduced in an article by William Sharpe in the Journal of Finance     Technology Milestone The black box stock ticker is replaced by the 900 ticker, offering nearly twice the speed 1966 -   Key Industry Event Fortune Magazine profiles Alfred Winslow Jones, founder of the modern hedge fund     Technology Milestone Transmission of trade and quote data from the NYSE floor is fully automated 1968 -   Key Industry Events Euroclear founded by Morgan Guaranty Trust (Brussels) to clear international share transactions Approximately 200 hedge funds in U.S., including those formed by George Soros, Michael Steinhardt and Warren Buffett     Technology Milestone Intel founded — would become world's largest semiconductor company and revolutionize microprocessor industry     Market Benchmark NYSE establishes Central Certificate Service (CCS) to transfer securities electronically, eliminating their physical handling for settlement purposes 1969 -   Technology Milestone ARPANET, the first internet, is launched by the U.S. military; Unix operating system first developed Back to top 1970s       1971 -   Market Benchmark NASDAQ opens as world's first electronic stock market 1973 -   Key Industry Events "The Pricing of Options and Corporate Liabilities" by Fischer Black and Myron Scholes is published in the Journal of Political Economy SWIFT (Society for Worldwide Interbank Financial Telecommunication) founded in Belgium by 239 banks from 15 countries to "automate the telex"     Market Benchmark Depository Trust Company (now the Depository Trust & Clearing Corporation) assumes the operations of CCS; focuses on custodial services for banks, brokers and other institutions; provides centralized, automated post-trade processing 1974 -   Key Industry Events Passage of Employee Retirement Income Security Act (ERISA) overhauls federal pension law State Street begins providing securities lending services 1975 -   Key Industry Event Securities and Exchange Commission (SEC) bans fixed minimum commission rates, a cornerstone of the U.S. securities markets and all other organized exchanges throughout the world     Technology Milestone Microsoft founded by Bill Gates and Paul Allen 1976 -   Key Industry Events Vanguard index mutual fund launches National Securities Clearing Corporation formed     Technology Milestone The Apple computer is introduced     Market Benchmark National Securities Clearing Corporation formed 1978 -   Technology Milestone The Intermarket Trading System is established, linking seven exchanges via computers Back to top 1980s       1980 -   Key Industry Events Derivative products (like futures, options and warrants) become more plentiful throughout the decade The 1980s mark the rise of international hedge funds as market players     Market Benchmark Yearly trading volume on NYSE surpasses 10 billion shares 1981 -   Key Industry Event PTE 81–6 ERISA exemption, "Lending of Securities", permits plans to lend securities, leads to growth in securities lending     Technology Milestone Mike Bloomberg forms Innovative Market Systems, later Bloomberg L.P. 1982 -   Key Industry Event Drysdale Government Securities collapses, leading to significant collateralization reforms; PTE 82-63 ERISA exemption, "Compensation to Fiduciaries for Securities Lending Services," provides relief from certain ERISA restrictions     Market Benchmark The NYSE experiences its first 100 million share day 1984 -   Key Industry Event Less than 70 identifiable hedge funds exist in U.S. after losses sustained in 1970s 1985 -   Technology Milestone Microsoft Windows graphical user interface for personal computers launched 1986 -   Key Industry Event "Big Bang" regulatory reforms in U.K. have wide-reaching global impact 1987 -   Market Benchmark On October 19th ("Black Monday") the Dow Jones Industrial Average (DJIA) experiences its largest one-day percentage drop in history, 508 points or 22.61 percent. This drop causes volume to surge to an unprecedented 604 million shares 1988 -   Key Industry Event In the U.K., Maxwell Communications' pension funds begin to lend shares to provide collateral for bank loans to Maxwell's private companies 1989 -   Key Industry Event State Street establishes securities lending office in London Back to top 1990s       1990 -   Key Industry Events State Street begins using a risk equivalency system to more accurately measure borrower credit limits The Group of Thirty publishes a special report on clearance and settlement systems; Recommendation Eight encourages securities lending and calls for removal of barriers inhibiting its practice State Street establishes securities lending office in Tokyo.     Market Benchmark World's total capital market of stocks, bonds and cash exceeds $22 trillion, up from $2 trillion in 1969 1991 -   Key Industry Events Death of Maxwell Communications’ Robert Maxwell reveals he had lost £460 million of his employees’ pension fund assets Legislation in U.K. reinstates ability of British investors to lend non–U.K. assets; further regulatory changes permit British unit trusts to lend their securities Hong Kong liberalizes regulations on securities lending State Street establishes securities lending office in Sydney     Market Benchmark GovPX — a 24–hour, worldwide electronic reporting system — is formed to distribute real time quotes and transaction prices for U.S. Treasury and other government securities 1992 -   Technology Milestone The World Wide Web is launched     Market Benchmarks Pension funds, educational endowments and charitable foundations own more than 50% of the stock outstanding in the U.S. — over $2 trillion Daily trading of U.S. government bonds exceeds $100 billion; the average daily volume of the NYSE surpasses 200 million shares 1993 -   Key Industry Event State Street separates its securities lending arm from its custody business, viewing it instead as an asset management function. This distinction starts an industry trend     Technology Milestone Windows NT desktop operating system launches 1994 -   Key Industry Event Increased focus on risk management in securities lending due to Barings collapse in the U.K. and huge investment losses     Technology Milestone Financial Information Exchange (FIX) protocol committee established 1995 -   Key Industry Event New hedging tools and favorable publicity in early 1990s lead to resurgence of hedge funds     Market Benchmark The three-day settlement period (T+3) for listed equities is introduced 1996 -   Technology Milestone NYSE launches real-time stock tickers on CNBC and CNNfn. Previously, market data had been delayed 20 minutes 1997 -   Market Benchmark The DJIA plummets 554 points, triggering the NYSE's "circuit breaker" rule for the first time. Trading halts at 3:30 p.m. 1998 -   Key Industry Events Japan Securities Dealers Association (JSDA) legitimizes the lending of equities from pension plans with Handling of Stock Lending Transactions Long Term Capital Management hedge fund collapses Period of economic turmoil in several Asian markets — the "Asian Contagion" — begins State Street establishes securities lending offices in Toronto and Montreal     Technology Milestone State Street launches SL PerformanceAnalyzer®, the industry's first risk-adjusted performance measurement tool     Market Benchmark Total value of the bond market is over $10 trillion — up approximately 400 percent since 1980 1999 -   Key Industry Events The Euro is created — one result is the increase of cash collateral lending in the Eurozone. Some estimates place the number of hedge funds at close to 4,000     Market Benchmark DJIA tops 10,000 for the first time Back to top 2000s       2000 -   Key Industry Event The S&P Global 100 Index is launched — a collaboration of the NYSE, Standard & Poor's, the Tokyo Stock Exchange and the Deutsche Borse     Technology Milestone Financial service providers start to tackle the challenges of straight-through processing (STP). Wall Street survives Y2K     Market Benchmarks SEC implements plan to convert pricing of equities and options from fractions to decimals DJIA closes at its all-time high - 11,722.98 2001 -   Key Industry Events The Canadian government legalizes lending from mutual funds State Street establishes securities lending office in Hong Kong     Technology Milestone EquiLend Holdings LLC established; goal is to develop a global platform for the automation and negotiation of securities financing transactions between securities lenders and borrowers. State Street is one of the ten founding firms     Market Benchmarks On January 4th, volume of trading on NYSE exceeds 2 billion shares for the first time — this record-volume day followed the previous day's 1/2-percentage-point interest rate cut by the Fed Reserve, which lowered the fed funds rate to 6 percent Decimal pricing of stocks implemented, ending the 200+ year-old practice of trading in eighths and sixteenths of a dollar 2002 -   Key Industry Events Single stock futures begin trading in the U.S. Clearstream International (Luxembourg) acquired by Deutsche Börse AG     Market Benchmarks Over US$1 trillion in portfolio securities on loan in U.S. On July 24 the NYSE handles its largest single volume day - 2.81 billion shares 2003 -   Technology Milestone EquiLend offers its participants daily access to more than $1 trillion in lendable securities and has facilitated more than $400 billion in securities loans since the platform went live in late June 2002     Market Benchmarks Hedge funds manage more than US$600 billion worldwide, compared to $311 billion in 1998 U.S. institutions trade an average of US$ 7.4 billion in equity derivatives, an increase of 23% from 2001 Back to top		Securities Lending Resources Overview Transaction Basics Publications Market Perspectives Economic Perspectives Industry Timeline Glossary Click Here For About Us Find out more about Securities Finance at State Street Our Unique Approach Learn why State Street is the industry leader in securities lending. 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