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TD Waterhouse To Launch Luxembourg Share Dealing Operation

Ulrika Lomas, Tax-news.com, Brussels

02 August 2000

TD Waterhouse Inc, the discount stock broker, is to make a foray into the European market in a move to capture wealthy investors. The New York-based brokerage, which also has an operation in the UK, will join with a Luxembourg bank , Banque Generale du Luxembourg (BGL), in a joint venture that will offer access to US and European stocks.

TD Waterhouse, which is controlled by Toronto-Dominion Bank, will own 51% of the new entity with BGL, which is part of the Fortis group, holding the remaining 49% stake. The precise size of TD Waterhouse's investment has not been disclosed, but according to one of its European executives, it amounts to "tens of millions of dollars."

The joint venture, which has yet to be named, will be set up as a bank in Luxembourg and will target high net worth customers wishing to invest internationally and who have portfolios of at least US$160,000. The ethos of a discount brokerage is to serve clients who wish to manage at least some of their wealth on their own, without paying fees for porfolio advice.

Clients of the new bank will be able to order trades on major European stock exchanges, the New York and Toronto stock exchanges and the Nasdaq market by a number of means - over the telephone, on the Internet and at walk-in locations around Europe. Investors will not only have access to all the major equity markets but also to a range of unit trusts and mutual funds. TD Waterhouse and BGL also plan to make it possible for clients to use data-capable cellular phones and interactive television in the near future. To add to the attraction, services will be delivered in English, German, Dutch and French.

TD Waterhouse CEO Stephen McDonald said of the venture, which is due to be operational by the end of 2000: 'This is further evidence of our real steps towards becoming a leading European player which is a key component of our global strategy.' TD Waterhouse is coming into the market at a good time, when the number of high net worth individuals (those with disposable funds of US$160,000 or more) in Europe is expected to top 3.1 million by the end of the year, representing a significant increase from the estimated 400,000 at the end of 1998.

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