Britain passed the Bubble Act in 1720 in response to speculative companies after the South Sea Bubble.
The act, formally titled the Royal Exchange and London Assurance Corporation Act 1719, received royal assent in June 1720. It prohibited companies from operating as joint-stock corporations without a royal charter or an act of Parliament. The measure targeted unauthorized enterprises that had attracted speculative investment during the South Sea boom.
The law was associated with efforts to protect the South Sea Company from competition, so it was not simply a neutral investor-protection measure. It also helped suppress many smaller ventures that had appeared during the speculative frenzy.
The Bubble Act remained on the statute book for more than a century and was repealed in 1825. Historians debate how effectively it restrained speculation, because the South Sea Company itself was central to the bubble. The act’s name became a lasting reference to the dangers of promotional finance and market mania.