The 1720 bubble targeted by Parliament’s Bubble Act was the South Sea Bubble.
The South Sea Company was founded in England in 1711 and received a monopoly over British trade with Spanish South America, although its actual trading opportunities were limited. In 1720, the company proposed converting part of the national debt into shares, helping drive its price dramatically upward. Investors included prominent politicians, aristocrats, and ordinary members of the public.
The Bubble Act became law in June 1720. It prohibited joint-stock companies from operating without a royal charter or parliamentary authorization, and it was widely used against unapproved competitors. Confidence collapsed later that year as South Sea shares fell, ruining many investors. The South Sea Bubble is often discussed alongside France’s Mississippi Bubble, but they were separate schemes that collapsed during the same year.