Broker charges £14.95 for trades up to £1,500 and is set to pay interest rate on cash balances By Ki...
Broker charges £14.95 for trades up to £1,500 and is set to pay interest rate on cash balances
By Kira Nickerson
E*Trade UK is charging investors a flat rate fee for stock transactions conducted on its electronic service.
E*Trade UK, which launched on 29 July, is an internet-only stockbroker aiming to offer a fully electronic service to UK investors including free research and news.
Created as a joint venture with Electronic Share Information (ESI), the group is offering a flat rate of £14.95 a trade up to £1,500. For active investors and for trades above £1,500 the group is charging £24.95 a trade but only on the first 10 transactions. After 15 trades the user is charged £19.95 and other trades will cost the user £14.95. All prices include the free research facility.
There is an additional account management charge of £12.50 a quarter, which covers administration such as the collecting and redeeming of dividends.
Investors must have £1,000 in cash or stock to open a trading account, which will then be held in a pooled nominee account with the Royal Bank of Scotland.
Julian Costley, chief executive of E*Trade UK, said: "We are also offering a competitive interest on cash balances. We think it is unreasonable to have low interest on the balances and want to further reduce the barriers for smaller investors. One of the key features of E*Trade is that it has paperless account administration with everything done online. Accounts can be opened, and trades and contract notes will all be dealt with electronically."
Through the research information provided by ESI investors will have access to stock quotes, summary charts, news, core fundamental data, annual reports and a stockwatch option.
It also includes an online investors forum where users can share information or questions. Detailed historical information on stocks, provided by Hemmington Scott, is also available on the site.
Investors who wish to have access to the research portion of E*Trade but not transact can register for free and will be given access to company, technical and fundamental investing information for £5 a month.
The service, which provides access to London's equities
markets, will eventually be expanded to enable cross border trading as part of the group's global strategy. E*Trade UK is the fifth branded site outside the US and is part of E*Trade Global, a planned global trading network.
July Balint, president of E*Trade International, said: "Cross border trading is complex and we are conscious of the varying regulatory environments in each country. It is not a simple thing to do and it will take a good three to five years to build the network but then we believe in testing things very thoroughly. It is not speed to market that is important, it is reliability."
As part of its international strategy, last month E*Trade acquired TIR Holdings which offers global, multi-currency securities execution and settlement services.
In addition to its services in the US, Canada, France, Sweden and Australia the group is in final testing of its Japanese
service and has signed
licensing agreements for online financial services across most of Europe.
100 new clients
Achievements, charity work and other happy snippets
Square Mile’s series of informal interviews
Partner Insight: The rise in demand for DFM and multi manager solutions has been largely driven by new mandates from the regulator, says James Bampton, head of UK intermediary distribution at Architas