ETrade, a US online stockbroker, has formed a joint venture with UK based Internet financial services provider, Electronic Share Information (ESI).
The deal will establish a new company, ETrade UK Holdings, the first to offer online real time trading in the country.
The ETrade Group has taken a 27.7 per cent share in the new company with ESI bringing its customer base of 175,000 private investors, plus its equity market information services and back office systems to the deal.
ESI has been offering share price data on the Internet since 1995 and saw huge customer demand for an online trading system.
?Our customers kept telling us ?we want to trade online',? said Tami Bourke, head of marketing at ESI. ?At the moment we are just an information company. Turning into an online investment company is a huge step for us and for private investors."
Once the system is up and running, customers will be able to trade online with their requests going direct to the market maker - the person who actually buys the stocks. This reduces time and paperwork as well as eliminating one problem associated with non-real time electronic trading. ?The customer can be confident they are actually buying at the price they see on-screen, at that precise moment in time,? said Bourke.
The company has not yet finalised the date when customers can start trading online and it may take six months for the system to go live. ?We still have a lot to do,? admitted Bourke.
A large part of that work is to determine the type of payment system to be used. Bourke said the service is likely to operate in the same way as a traditional broker, by opening bank accounts to hold investors' money, but that has not been finally decided yet.
ETrade UK will be headed by the well known IT company backer and chairman of ESI, Hermann Hauser, who said of the announcement: ?From the beginning, our mission at ESI has been to revolutionise the online investing market, initially by giving the private investor market information previously only available to City institutions. Through this relationship with ETrade, one of the premier online investing companies in the industry, we can now complete the mission.?
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