Instinet has already completed the development of a new system for direct online retail brokerage. Elements of the service will be combined with Instinet's existing ability to serve retail investors through other firms who use the agency broker for executing and clearing trades.

Reuters originally expected to launch Instinet.com in May 2000, but said at the beginning of June that the starting date had been postponed until the fourth quarter. In October, Reuters disclosed plans for an initial public offering of the company's Instinet operation.

Reuters has already signed its first major wholesale customer to the share trading service, and says that, in its early stages, more than 30,000 trades a day are being processed. The major customer is apparently Terranova, the US online share trader.

The fear was that the launch of a new retail product under the Instinet name could have damaged both Instinet and Reuters given the “challenging” market circumstances. In the past two weeks a number of online stockbrokers, including America’s Charles Schwab, have signalled a sharp fall in trading volumes, with private investors quitting the market because of the plummeting value of technology stocks.