London Stock Exchange
|London Stock Exchange|
|Location||London, England, United Kingdom|
|Owner||London Stock Exchange Group|
|Key people||Christopher S. Gibson-Smith, (Chairman)
Xavier Rolet, (CEO)
|No. of listings||2,864 (as of December 2011)|
|MarketCap||US$3.2 trillion (Dec 2011)|
|Volume||US$1.7 trillion (Dec 2009)|
|Indexes|| FTSE 100 Index
FTSE 250 Index
FTSE 350 Index
FTSE SmallCap Index
FTSE All-Share Index
The London Stock Exchange is a stock exchange located in the City of London in the United Kingdom. As of December 2011, the Exchange had a market capitalisation of US$3.266 trillion ( short scale), making it the third-largest stock exchange in the world by this measurement (and the largest in Europe). The Exchange was founded in 1801 and its current premises are situated in Paternoster Square close to St Paul's Cathedral in the City of London. The Exchange is part of the London Stock Exchange Group.
The Royal Exchange had been founded by Thomas Gresham on the model of the Antwerp Bourse, as a stock exchange. It was opened by Elizabeth I in 1571.
During the 17th century, stockbrokers were not allowed in the Royal Exchange due to their rude manners. They had to operate from other establishments in the vicinity, notably Jonathan's Coffee-House. At that coffee house, a broker named John Casting started listing the prices of a few commodities, exchange rates and certain key provisions such as salt, coal and paper in 1698. Originally, this was not a daily list and was only published a few days of the week.
This list and activity was later moved to Garraway’s coffee house. Public auctions during this period were conducted for the duration that a length of tallow candle could burn; these were known as "by inch of candle" auctions. As stocks grew, with new companies joining to raise capital, the royal court also raised some monies. These are the earliest evidence of organised trading in marketable securities in London.
After Gresham's Royal Exchange building was destroyed in the Great Fire of London, it was rebuilt and re-established in 1669. This was a move away from coffee houses and a step towards the modern model of stock exchange.
The Royal Exchange not only housed brokers but also merchants and merchandise. This was the birth of a regulated stock market, which had teething problems in the shape of unlicensed brokers. In order to regulate these, Parliament brought out an act in 1697 that levied heavy penalties, both financial and physical to those brokering without a licence. It also set a fixed number of brokers (at 100), which was later increased as the size of the trade grew. This invariably led to several problems of its own, one of which was that the traders had started leaving the Royal Exchange, either by their own virtues or through expulsion and had started dealing in the streets of London. The street in which they were now dealing was known as Change or Exchange Alley which was suitably placed close to the Bank of England. Parliament tried to regulate this and ban the unofficial traders from the Change streets.
Companies became weary of "bubbles" when companies rose quickly and fell, so they persuaded Parliament to pass a clause preventing "unchartered" companies from forming.
After the Seven Years War (1756–1763), trade at Jonathan's coffee house boomed again. In 1773, Jonathan, together with 150 other brokers, formed a club and opened a new and more formal "Stock Exchange" in Sweeting's Alley. This now had a set entrance fee, through which traders could enter the stock room and trade securities. It was, however, not an exclusive location for trading, as trading also occurred in the Rotunda of the Bank of England. Fraud was also rife during these times and in order to deter such dealings, it was suggested that users of the stock room pay an increased fee. This was not met well and ultimately, the solution came in the form of annual fees and turning the Exchange into a Stock Subscription room.
The Subscription room created in 1801 was the first regulated exchange in London, but the transformation was not welcomed by all parties. On the first day of trading, non-members had to be expelled by a constable. In spite of the disorder, a new and bigger building was planned, at Capel Court.
William Hammond laid the first foundation stone for the new building on 18 May. It was finished on 30 December when "The Stock Exchange" was incised on the entrance.
First Rule Book
In the Exchange's first operating years, on several occasions there was a clear set of regulations or fundamental laws missing for the Capel Court trading. In February 1812, the General Purpose Committee confirmed a set of recommendations, which later became the foundation of the first codified rule book of the Exchange. Even though the document was not a complex one, topics as settlement and default were, in fact, quite comprehensive.
With its new governmental commandments and increasing trading volume in place, the Exchange was progressively becoming an accepted part of the financial life in the City. In spite of continuous criticism from newspapers and the public, the government used the Exchange's organised market (and would most likely not have managed without) to raise the enormous amount of money in the wars against Napoleon.
Foreign and regional exchanges
After the war and facing a booming world economy, foreign lending to countries such as Brazil, Peru and Chile were a growing market. Notably, the Foreign Market at the Exchange allowed for merchants and traders to participate as well and The Royal Exchange hosted all transactions where foreign parties were involved. The ever-increasing of overseas business meant eventually the dealing in foreign securities had to be allowed within all of the Exchange's premises.
Just as London enjoyed its international growth forthcoming, the domestic Great Britain also benefited from the economic boom. Two other cities were particularly showing great business development, namely Liverpool and Manchester. Consequently, in 1836, both the Manchester and Liverpool Stock Exchanges were opened. These were also times when stockbroking was considered a real business profession and such attracted many entrepreneurs. Nevertheless, with booms came busts, and in 1835 the “Spanish panic” hit the markets, also followed by a second one two years later. Some stocks soared by some 10, 20 and 30 pct, a week.
The Exchange before the World Wars
By June 1853, both participating members and brokers were taking up so much space that the Exchange was now uncomfortably crowded and continual expansion plans were taking place. Being already extended west, east and northwards, it was then decided the Exchange needed an entire new establishment. Thomas Allason was appointed as the main architect, and in March 1854 the new brick building inspired from the Great Exhibition stood ready. This was a huge improvement of both surroundings and space, with twice the floor space available.
By the late 1800s, the telephone, ticker tape and the telegraph had been invented. Those new technologies led to a revolution in the work of the Exchange.
First World War
Being the financial centre of the world, both the City and the Stock Exchange were hit hard by the outbreak of the First World War in 1914. At first, prices surged due to a rising fear that both borrowed money was to be called back and foreign banks would demand their loans or raise interest. The decision of closing the Exchange for improved breathing space and extension of the August Bank Holiday to prohibit a run on banks, was hurried through by the Committee and Parliament, respectively. The Stock Exchange ended up being closed from the end of July until the New Year, introducing again street business as well as on the “challenge system”.
The Exchange was set to open again on 4 January 1915 under tedious restrictions, as transactions were to be in cash only. Due to the limitations and challenges on trading brought by the war, almost a thousand members quit the Exchange between 1914 - 18. When peace time finally returned in November 1918, the post-war mood on the trading floor was generally cowed.
In 1923 the Exchange received its own Coat of Arms, with the motto “Dictum Meum Pactum”, My Word is My Bond.
Second World War
In 1937, experiences from the First World War made officials at the Exchange draw up plans on how to handle a new war situation. One of the main concerns were air-raids and the subsequent bombing of the Exchange's perimeters, and one suggestion was a move to Denham. This however, never took place. On the first day of September 1939, the Exchange closed its doors “until further notice” and two days later, the declaration of war was signed. Unlike from the prior war, the Exchange opened its doors again six days later, on the 7th of September.
As the war escalated into its second year, the concerns for air raids were greater than ever. Eventually, on the night of 29 December 1940 one of the greatest fires in London’s history took place. The Exchange’s floor was hit by a clutch of incendiary bombs, which fortunately were extinguished quickly. Trading on the floor was now drastically low and most was done over the phone to reduce the possibility of injuries.
The Exchange was only closed for one more day during wartime, in 1945 due to damage from a V-2 rocket, where trading continued in the house’s basement.
After some turbulent times, the stock market enjoyed some remarkable years in the late 1950s and business was indeed booming. This pushed the officials to find a more suitable space for its new accommodation. The work on the new Stock Exchange Tower began in 1967. The Exchange’s new 321 feet high house had 26 storeys with Council and Administration at the top, and middle floors let out to affiliate companies. Queen Elizabeth II opened the building on 8 November 1972, and the finalised building was now a new City landmark, with its 23,000 sq ft trading floor.
1973 marked the year of changes for the Stock Exchange. Firstly, two trading prohibitions were to be abolished. A report from the Monopolies and Mergers Commission recommended the admittance of both women and foreign-born members on the floor. And secondly, in March the London Stock Exchange was to (formally) amalgamate with the 11 British and Irish regional exchanges. This expansion led to the creation of a new position of Chief Executive Officer, who after extensive search, was given to Robert Fell. Governmental changes also continued in 1991, when the governing Council of the Exchange was replaced with a Board of Directors drawn from the Exchange’s executive, customer and user base. This also marked the first time the trading name became 'The London Stock Exchange'.
FTSE 100 Index (Footsie 100) was launched by the Financial Times and Stock Exchange partnership in February 1984. This turned out to be one of the most useful indices of all and tracked the movements of the 100 leading companies listed on the Exchange.
The biggest happening of the 1980s was the sudden deregulation of the financial markets in the UK in 1986. The phrase Big Bang was coined to describe measures including abolition of fixed commission charges and of the distinction between stockjobbers and stockbrokers on the London Stock Exchange, as well as change from an open-outcry to electronic, screen-based trading.
In 1995 The Exchange launched the Alternative Investment Market, the AIM, to allow growing companies to expand to international markets. Two years later the Electronic Trading Service (SETS) was launched, bringing greater speed and efficiency to the market. Following this, the CREST settlement service was also launched. On the year of the new millennium, 2000, the Exchange's shareholders voted to become a public limited company: London Stock Exchange plc. The LSE also transferred its role as UK Listing Authority to the Financial Services Authority (FSA- UKLA)
EDX London, a new international equity derivatives business, was created in 2003 in partnership with OM Group. The Exchange also acquired Proquote Limited, a new generation supplier of real-time market data and trading systems.
The old Stock Exchange Tower became largely redundant with the advent of the Big Bang, which deregulated many of the Stock Exchange's activities as it enabled an increased use of computerised systems that allowed dealing rooms to take precedence over face to face trading. Thus, in 2004, the House moved to a brand new headquarters in Paternoster Square, close to St Paul's Cathedral.
In 2007 The London Stock Exchange merged with Borsa Italiana, creating the London Stock Exchange Group (LSEG). The Group operates out of the Stock Exchange's headquarters in Paternoster Square.
Issuer services help companies from around the world to join the London equity market in order to gain access to capital. The LSE allows company to raise money, increase their profile and obtain a market valuation through a variety of routes, thus following the firms throughout the whole IPO process.
The London Stock Exchange runs several markets for listing, giving an opportunity for different sized companies to list. International companies can list a number of products in London including shares, depositary receipts and debt, offering different and cost-effective ways to raise capital. In 2004 the Exchange opened a Hong Kong Office and has attracted more than 200 companies from the Asia-Pacific region.
For the biggest companies exists the Premium Listed Main Market. This operates a Super Equivalence method where conditions of both the UK Listing Authority as well as London Stock Exchange’s own criteria have to be met. The largest IPO (Initial Publical Offering) on the Exchange was completed in May 2011 by Glencore International plc. The company raised $10bn at admission, making it one of the largest IPO ever.
In terms of smaller SME’s the Stock Exchange operates the Alternative Investment Market (AIM). For international companies that fall outside of the EU, it operates the Depository Receipt (DR) scheme as a way of listing and raising capital.
Amongst the benefits of joining one of the Exchanges markets are:
- Providing access to capital for growth and raise finance for further development
- Both broadening the shareholder base and creating a market for the company’s share
- Placing an objective market value on the company’s business
There are also two specialised markets:
Professional Securities Market This market facilitates the raising of capital through the issue of specialist debt securities or depositary receipts (DRs) to professional investors. The market operates under the status as a Recognised Investment Exchange, and by July 2011 it had 32 DRs, 108 Eurobonds and over 350 Medium Term Notes.
Specialist Fund Market Is the London Stock Exchange dedicated market, designed to accept more sophisticated fund vehicles, governance models and security. It is suitable only for institutional, professional and highly knowledgeable investors. The Specialist Fund Market is an EU Regulated Market and thus securities admitted to the market are eligible for most investor mandates providing a pool of liquidity for issuers admitted to the market
The securities available for trading on the London Stock Exchange are:
- Ordinary Shares
- Exchange-traded funds
- Exchange Traded Commodities
- Covered Warrants
- Structured Products
- Retail Bonds
- Global Depositary Receipts (GDRs)
There are two main markets on which companies trade on the LSE:
- Main Market
The home to some of the most well-established, largest and recognised companies in the world. Over 1,300 companies from 60 different countries enjoy the balanced and globally respected standards of regulation and corporate governance that the London Stock Exchange offers. Over the past 10 years over £366 billion has been raised through new and further issues by Main Market companies. The FTSE 100 Index (“footsie”) is the main share index of the 100 most highly capitalised UK companies listed on the Main Market.
- Alternative Investment Market (“AIM”)
The London Stock Exchange’s international market for smaller growing companies. A wide range of businesses including early stage, venture capital backed as well as more established companies join AIM seeking access to growth capital. The AIM falls within the classification of a Multilateral Trading Facility (MTF) as defined under the MiFID directive in 2004, and such is a flexible market with a simpler admission process for companies wanting to be publicly listed.
There are also several electronic platforms on which the different products trade.
- SETS (Stock Exchange electronic Trading Service) SETS is the London Stock Exchange’s flagship electronic order book, trading indexed securities (FTSE100, FTSE250, FTSE Small Cap Index constituents, Exchange Traded Funds, Exchange Trading Products as well as other liquid AIM, Irish and London Standard listed securities)
- SETSqx (Stock Exchange electronic Trading Services – quotes and crosses) SETSqx is a trading platform for securities less liquid than those traded on SETS. This platform combines a periodic electronic auction book four times a day with standalone non-electronic quote driven market making.
- SEAQ SEAQ is the London Stock Exchange’s non-electronically executable quotation service that allows market makers to quote prices in AIM securities and the Fixed Interest market.
- International Trading Service
- IOB: The International Order Book offers easy and cost efficient access for traders looking to invest in fast growing economies; for example, in Central and Eastern Europe, Asia and the Middle East via depositary receipts (DRs). It is based on an electronic order book similar to SETS.
- European Quoting Service: the European Quoting Service is a service that enables clients to meet their pre-trade pan-European transparency obligations.
- A pan-European trade reporting service that enables clients to meet their post-trade reporting obligations whether trading on or off Exchange.
The trading of derivatives products is also available on the Turquoise platform (ex EDX London). The available products are Norwegian Futures and options on Norwegian single stocks and indices, Russian futures and options on the most liquid IOB Depositary Receipts, Futures and options on the FTSE RIOB index as well as futures on the FTSE 100. Futures and options on the most liquid European stock underlyings as well as on European benchmark indices are expected to be launched in Q4 2011 and Q1 2012 subject to FSA approval.
- Fixed Income
MTS (Mercato Telematico di Stato)
MTS is a fixed income trading electronic platform, trading European government bonds, quasi-government bonds, corporate bonds, covered bonds and repo. MTS provides access to both cash and repo markets as well as fixed income market data and fixed income indices. It is majority owned by the London Stock Exchange Group. Shareholding firms also include large international banks such as J.P. Morgan, Deutsche Bank and BNP Paribas.
The largest products offered are:
- MTS Cash - MTS BondVision (Dealer to Client electronic market) - MTS Repo - MTS Credit (for euro-denominated non government bonds) - MTS Data - MTS Indices
ORB Launched on 1 February 2010, the Order book for Retail Bonds (ORB) offers continuous two-way pricing for trading in UK gilts and retail-size corporate bonds on-exchange. ORB acts as an electronic secondary market for retail investors. 2009 saw highest ever inflow into bond funds, net total of £10.7bn, this inflow driven almost entirely by retail investors (90% of total), with corporate bonds being the best-selling sector.
ORB offers an open and transparent market model for trading in retail-size. Currently there are five dedicated market makers committed to quoting two-way prices in a range of retail bonds throughout the trading day. New market models means private investors will be able to see prices on-screen and trade in bonds in a similar way as they currently do for shares. This creates a greater efficiency of electronic on-book execution and option to use straight-through-processing to settlement system.
The drive in Retail Bonds is being driven by cost-effectiveness, simplicity of transaction charging and standardisation of market structure. The key aim of ORB is to increase distribution for bonds by opening up these markets to private investors who may have previously felt excluded from this market. This is by increasing the availability of publication on offer, detailing the risks and benefits involved in Retail Bonds, such as taxation.
New entrants into ORB have been able to raise sufficient funds, such as Places for People who were able to raise capital of £140 million. This portrays the advantage using ORB can have, even for non-bank smaller firms seeking to raise capital.
The LSE supply its participants with real time prices and trading data creating the transparency and liquidity through several services. Feeds are also available through providers such as Bloomberg and Thomson Reuters. Some of the products and references provided by the London Stock Exchange are:
- Unavista – LSE’s business solution for Post-Trade Services, Data Solutions and Reconciliations. It offers customers a global hosted platform for integrating matching, validation and reconciliations.
- RNS – Regulatory News Service is both a regulatory and financial communications channel for companies to communicate with the professional investor. Around 175,000 announcements are processed by RNS each year.
- Proquote – the London Stock Exchange’s data provider and information display system. It offers both Pre and Post trade Execution Monitoring and Analysis tools.
The trades conducted on the LSE are cleared on LCH.Clearnet, which is mutually owned by some banks, Euronext as well as the London Metal Exchange.
Through the Exchange's Italian arm, Borsa Italiana, the London Stock Exchange Group as a whole offers clearing and settlement services for trades through CC&G (Cassa di Compensazione e Garanzia) and Monte Titoli. CC&G is the Groups Central Counterparty (CCP) and covers multiple asset classes throughout the Italian equity, derivatives and bond markets. CC&G also clears Turquoise derivatives. Monte Titoli (MT) is the pre-settlement, settlement, custody and asset services provider of the Group. MT operates both on-exchange and OTC trades with over 400 banks and brokers.
The LSE's current trading platform is its own Linux-based edition named "Millennium Exchange".
The old trading platform TradElect was based on Microsoft's .NET Framework, was developed by Microsoft and Accenture. Microsoft used the LSE software as an example of the supposed superiority of Windows over Linux in the " Get the Facts" campaign, claiming that the LSE system provided " five nines" reliability, and a processing speed of 3-4 milliseconds. For Microsoft, LSE was a good combination of a highly visible exchange and yet a relatively modest IT problem.
After suffering extended downtime and unreliability the LSE announced in 2009 that it was planning to switch to Linux in 2010.
In October 2010, the London Stock Exchange announced that the new Linux based trading system named Millennium Exchange, had smashed the world record for trade speed, with 126 microsecond trading times being recorded on the Turquoise dark pool trading venue and would go live on 1 November. The system, which was developed by Millennium IT, a Sri Lankan IT company bought by the LSE in 2009, was taken out of service following a 2-hour outage of the Turquoise venue on 2 November. The incident was according to LSE officials caused by human error that "may have occurred in suspicious circumstances."
Plans were to introduce Millennium Exchange also on the main share trading platform in December. The LSE stated it was hoping the software would be ready for use again early in 2011.
In February 2011, the London Stock Exchange finished the switch to Linux. LSE chief executive Xavier Rolet insisted that the exchange, once a monopoly, would deliver record speed and stable trading in order to fight back against the fast erosion of its dominant marketshare by specialist electronic rivals.
On 23 June 2007, the London Stock Exchange announced that it had agreed on the terms of a recommended offer to the shareholders of the Borsa Italiana S.p.A. The merger of the two companies created a leading diversified exchange group in Europe. The combined group was named the London Stock Exchange Group, but still remained two separate legal and regulatory entities. One of the long-term strategies of the joint company is to expand Borsa Italiana’s efficient clearing services to other European markets.
In 2007, after Borsa Italiana announced its call option exercise right to acquire full control of MBE Holdings, the combined Group would now control Mercato del Titoli di Stato, or MTS. This merger of Borsa Italiana and MTS with the London Stock Exchange’s existing bond listing business, enhanced the range of covered European fixed income markets.
The London Stock Exchange acquired Turquoise (TQ), a Pan-European MTF, in 2009 and since coupling with MillenniumIT’s software, it currently offers the fastest latency bar none in Europe. Currently the speed of latency on Turquoise (as measured at the end of August 2011) is 97 micro seconds on average for 99.9% of trades. Initially founded by a consortium of nine banks, it is now majority owned by the London Stock Exchange Group. Currently shareholders include twelve of the leading Investment Banks.
Turquoise operates a Maker-taker fee scheme, 0.30 basis points for Aggressive traders and 0.20 rebates for Passive traders, providing liquidity. The market share of Turquoise as an MTF has doubled over the past twelve months, from 3% to 6%. There are currently 2000 securities, across nineteen countries on Turquoise. Unlike Broker-Dealer Crossing Networks, TQ does not discriminate as to who can trade on their platform.
In December 2005, the London Stock Exchange rejected a £1.6 billion takeover offer from Macquarie Bank. The London Stock Exchange described the offer as "derisory", a sentiment echoed by shareholders in the Exchange. Shortly after Macquarie withdrew its offer, the LSE received an unsolicited approach from NASDAQ valuing the company at £2.4 billion. This too it rejected. NASDAQ later pulled its bid, and less than two weeks later on 11 April 2006, struck a deal with LSE's largest shareholder, Ameriprise Financial's Threadneedle Asset Management unit, to acquire all of that firm's stake, consisting of 35.4 million shares, at £11.75 per share. NASDAQ also purchased 2.69 million additional shares, resulting in a total stake of 15%. While the seller of those shares was undisclosed, it occurred simultaneously with a sale by Scottish Widows of 2.69 million shares. The move was seen as an effort to force LSE to the negotiating table, as well as to limit the Exchange's strategic flexibility.
Subsequent purchases increased NASDAQ's stake to 25.1%, holding off competing bids for several months. United Kingdom financial rules required that NASDAQ wait for a period of time before renewing its effort. On 20 November 2006, within a month or two of the expiration of this period, NASDAQ increased its stake to 28.75% and launched a hostile offer at the minimum permitted bid of £12.43 per share, which was the highest NASDAQ had paid on the open market for its existing shares. The LSE immediately rejected this bid, stating that it "substantially undervalues" the company.
NASDAQ revised its offer (characterized as an "unsolicited" bid, rather than a "hostile takeover attempt") on 12 December 2006, indicating that it would be able to complete the deal with 50% (plus one share) of LSE's stock, rather than the 90% it had been seeking. The U.S. exchange did not, however, raise its bid. Many hedge funds had accumulated large positions within the LSE, and many managers of those funds, as well as Furse, indicated that the bid was still not satisfactory. NASDAQ's bid was made more difficult because it had described its offer as "final", which, under British bidding rules, restricted their ability to raise its offer except under certain circumstances.
In the end, NASDAQ's offer was roundly rejected by LSE shareholders. Having received acceptances of only 0.41% of rest of the register by the deadline on 10 February 2007, Nasdaq's offer duly lapsed. Responding to the news, Chris Gibson-Smith, the LSE's chairman, said: "The Exchange’s strategy has produced outstanding results for shareholders by facilitating a structural shift in volume growth in an increasingly international market at the centre of the world’s equity flows. The Exchange intends to build on its exceptionally valuable brand by progressing various competitive, collaborative and strategic opportunities, thereby reinforcing its uniquely powerful position in a fast evolving global sector."
On 20 August 2007, NASDAQ announced that it was abandoning its plan to take over the LSE and subsequently look for options to divest its 31% (61.3 million shares) shareholding in the company in light of its failed takeover attempt. In September 2007, NASDAQ agreed to sell the majority of its shares to Borse Dubai, leaving the United Arab Emirates-based exchange with 28% of the LSE.
Proposed merger with TMX Group
On 9 February 2011, the London Stock Exchange Group announced they had agreed to merge with the Toronto-based TMX Group, the owners of the Toronto Stock Exchange, creating a combined entity with a market capitalization of listed companies equal to £3.7 trillion. Xavier Rolet, who currently is CEO of the LSE Group, would have head the new enlarged company, while TMX Chief Executive Thomas Kloet would have become the new firm president. The London Stock Exchange however announced it was terminating the merger with TMX on 29 June 2011 citing that "LSEG and TMX Group believe that the merger is highly unlikely to achieve the required two-thirds majority approval at the TMX Group shareholder meeting". Even though the LSE obtained the necessary support from its shareholders, it failed to obtain the required support from TMX's shareholders.
Normal trading sessions on the main orderbook (SETS) are from 08:00 to 16:30 every day of the week except Saturdays, Sundays and holidays declared by the Exchange in advance. The detailed schedule is as follows:
- Trade Reporting 07:15 - 07:50
- Opening Auction 07:50 - 08:00
- Continuous Trading 08:00 - 16:20
- Closing Auction 16:30 - 16:35
- Order Maintenance 16:35 - 17:00
- Trade Reporting Only 17:00 - 17:15
Holidays are currently: New Year's Day, Easter, May Bank Holiday, Spring Bank Holiday, Summer Bank Holiday, and Christmas Day. Note that UK Time is Greenwich Mean Time (GMT), with daylight-saving time observed.