The companies that launched on the back of the South Sea Company became known as “bubbles” as their share prices also rapidly inflated. They prompted the government to pass the Royal Exchange and London Assurance Corporation Act, which became known as the Bubble Act, in June. This required all joint stock companies to have a Royal Charter in order to be able to trade, effectively allowing the suppression of many of the smaller companies. The act was passed simply in order to prevent the capital that might be invested in the South Sea Company being diluted. However, the act was misguided insofar as many companies folded, with their investors losing everything. People started to realise that the rocketing share prices were based simply on consumer confidence and that external intervention could bring the whole thing to an end. Nevertheless, investment in the remaining companies proceeded apace.