Wells Fargo & Co. Launches New Online Investment Service

Mandy Robinson, Tax-news.com, London

15 January 2001

Tradepoint announced on Friday that its re-branded virt-x pan-European electronic stock market will finally open for business on June 25th. The joint venture between Tradepoint, a consortium of leading international investment banks, and the Swiss exchange SWX (which will stop separate dealing in Swiss blue-chip equities) will list the top stocks from most of Europe’s largest bourses on a single screen, will operate with a counterparty facility provided by the London Clearing House, will offer a seamless back office with clearing through Euroclear and will have a single rulebook for all stocks regardless of listing location. The exchange will operate under UK regulatory standards.

Tradepoint said that it expects the exchange to generate annual revenues in excess of £37 million. The addition of trading in Swiss blue chips is expected to boost existing average daily volumes of about £70 million to more than £1.65 billion. Virt-x will offer full dealing services in all the main index stocks in France, German and Italy as well as the FTSE Eurotop 300, Stoxx and MCI indices which cover smaller European markets as well.

The consortium controlling Tradepoint includes Instinet, the financial markets arm of Reuters, the investment banks ABN Amro, Credit Suisse First Boston, Deutsche Bank, Dresdner Kleinwort Benson, JP Morgan, Merrill Lynch, Morgan Stanley Dean Witter and UBS Warburg, the fund manager American Century, and Archipelago, an electronic trading system. The launch of virt-x has been twice delayed, after being originally announced for 'early 2001' in mid-2000, and postponed to March, last October.

Tradepoint is a 'professional' exchange at present, and this won't immediately change when virt-x is launched. To be successful in the end, virt-x either has to accept individual investors, and compete against the already over-crowded on-line brokerage market in Europe, or it has to attract more of the existing brokerages to become members. There could be conflicts between those two goals. The 150 existing members of the tradepoint exchange are quite heavily weighted towards the UK, and include no e-brokerages as such, although some of the individual members have their own web-sites.

Virt-x will be entering the market as a significant player at an interesting moment in the development of European electronic share trading. Online brokers in Europe seem to be weathering the stock-market downturn better than their US counterparts, but this may just be a cyclical phenomenon. On-line trading came to Europe later than in the US, and it may

Wells Fargo & Co. launched a new investing service last week enabling customers to purchase fractional shares online.

Through the new Wells Share Builder service, investors can set up an account online and make automatic, regular investments. Wells Fargo says the system is easy to use as customers can simply choose their stock and how often they would like to invest (either on a monthly, weekly or on a one time basis) with a set amount of cash of their own choosing. There are no minimum level requirements for the account or the amount invested, but a fee of US$2 is charged for each transaction.

The service is the latest addition to Wells' discount brokerage and two full-service brokerages, Seattle-based Ragen McKenzie and California-based Van Kasper. Wells began online trading in 1998 and can now boast a data base of approximately 150,000 clients.

As one of the first major US banks to introduce such a service, Wells Fargo also offers a choice of over 4,100 of the largest market-cap companies and 68 index products on the NYSE and Nasdaq. In its endeavours to sign-up new investors Wells Fargo is offering a $50 account credit for customers if they join before the end of February, 2001.

More information can be obtained from Wells Fargo's website at http://www.wellsfargo.com

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