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E*Trade Sets Up In Bermuda To Offer International Equities

Mike Godfrey, Tax-news.com, New York

18 September 2000

E*Trade plans to expand investors' access to international equities, initially by offering US stocks through a new offshore stock-matching and order-routing operation in Bermuda.

E*Trade, which is operating in nine countries either through wholly owned subsidiaries or through companies in which it has minority interests, already offers its Swedish customers access to US securities. They can make the purchases in any currency they chose by pulling up a foreign currency transaction function on the screen.

Announcing the news, Bill Johnson, managing director of E*Trade Global, said that Bermuda was an ideal site because of its proximity to New York, the headquarters of E*Trade international stock trading operations, and because of a favourable tax climate. The company had considered Ireland and the UK as possible locations, but longer flight times from New York had ruled them out.

E*Trade has become a member of the Bermuda Stock Exchange, and anticipates having 10 staff on the island. Although initially the Bermuda operation will deal only with inbound trades in US stocks from foreign investors, it will later be extended to outbound trades in international equities for US investors. Bill Johnson also said that the company is considering adding fixed income trading to its offer.

Bermuda is already host to two electronic hedge-fund exchanges, and one other e-brokerage which offers access to international equities. All of these trading operations are supported with infrastructure by the Bermuda Stock Exchange, which is therefore developing considerable expertise in international electronic brokerage.

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