Charles Schwab, the largest US discount broker, and Tokio Marine and Fire, Japan's largest property and casualty insurer, have announced they are to create an online brokerage business in Japan.
It marks a significant expansion of Schwab's international strategy. Foreign growth is increasingly important for US brokers, as fears grow of increased competition in the US after Merrill Lynch's announcement this week that it would offer online trading.
Schwab will take a 50 per cent stake in the new venture, and will control day-to-day operations. Tokio Marine will have a 30-35 per cent stake, while its fellow Mitsubishi keiretsu, or business group, members - the Bank of Tokyo-Mitsubishi, Mitsubishi Trust and Banking and Meiji Life - will take a joint 15-20 per cent stake.
The deal intensifies competition in Japan's lucrative securities sector, where companies are scrambling to prepare for the next stage of `Big Bang', the rolling programme of financial deregulation.
In the online brokerage sector, companies such as Sony, the electronics group, and Softbank, the computer software company, have already set up online trading companies, while big domestic houses such as Daiwa and Nomura have established online businesses aimed at individuals.
