TD Waterhouse Launches UK Online Brokerage

Discount brokerage TD Waterhouse (NYSE: TWE) announced Monday that it has continued its overseas expansion by launching an online service for the UK market.

The New York-based brokerage — the world’s second-largest in terms of trading volume — said that it will offer commission-free trades until January 8th, as it rolls out its inaugural service across the Atlantic.

The launch is part of a push by TD Waterhouse to introduce sites across Europe and into Asia, raising the stakes in a fierce competition among online brokers such as Charles Schwab and E*TRADE, and traditional brokers that are turning to the Internet.

Indian Venture

TD Waterhouse has earmarked $100 million (US$) to fuel its expansion. The company announced plans to launch a site in India last month, when it entered into a joint venture agreement with Indian conglomerate, Tata Group.

A steel, cement, information technology, automobile manufacturing and financial services company, Tata Group will take a 51 percent stake of the venture, while TD Waterhouse assumes the remaining 49 percent.

Overseas Competition Heats Up

TD Waterhouse already has an established traditional brokerage in the UK. The company will offer its new online users access to the FTSE 100, 250, 350 and small cap indices. It will send customer orders to four providers and choose the best price, the company said.

TD Waterhouse, which claims nearly three million customer accounts worldwide, said it will charge $21 for a regular transaction after the free offer runs out in January.

UK Lagging Behind

Despite an intense push by online brokers in the UK, some analysts say that the country lags behind such continental leaders as Germany. Blue Sky Marketing recently issued a report that was critical of imported sites in Europe, saying that domestic competitors are providing better service, features and functions than their more well-known American counterparts.

Blue Sky surveyed over 2,000 sites across Europe to determine that nearly 700 companies offer Internet stockbroker services on 1,379 retail investment Web sites. Those numbers appear to be growing daily

Just last week, TD Waterhouse announced that it was joining Charles Schwab, Ameritrade and a host of Internet venture capitalists in forming a yet-to-be-named online investment bank. The bank is expected to be operational by sometime next year.