Online trading company expands interest in UK

Online trading company E*Trade Group Inc has stepped up its acquisition activity through total ownership of E*Trade UK. The UK-based company, formed in July last year, was previously a partnership between Electronic Share Information (ESI) and the E*Trade Group. Under the new ownership arrangement, E*Trade UK will operate as a wholly owned subsidiary providing personalised online financial services to the UK market.

Chief international officer of E*Trade Group, Ms Judy Balint said "This acquisition is a critical step toward our goal of building the first global cross-border trading network for online investors."

The strategic move follows its acquisition of the E*Trade @ NetBourse S.A., the licensee for Belgium, the Netherlands, Luxembourg, Austria, Italy and France. Prior to that, it obtained ownership of E*Trade Nordic AB, the licensee for the Nordic Countries. In the past few months, the company has formed strategic joint ventures in Germany, Denmark, Norway and South Africa.

E*Trade plans to enter the Irish market sometime during the next 12 months. Domestic investment operations currently allow electronic trading by e-mail only and will face stiff competition from companies like E*Trade and Charles Schwab when such services become available here.

E*Trade operates an instantaneous service on which investors can trade their account 24 hours a day seven days a week using `straight through processing' and deferred trading. When the market is open, a customer's trade is passed electronically to the market maker, bypassing the broker, and the trade is executed within a few seconds. After market hours, the orders are held and transferred the moment the market opens.

E-mail based trading involves a broker and takes longer than "straight through processing". It also tends to be more expensive per transaction than instantaneous trading.

The introduction of online trading services here is likely to coincide with the Irish Stock Exchange's completion of the new electronic trading system in the next six months.