Broker Seeks Retail Markets

Greenwich, Conn.-based The Timber Hill Group is a brokerage that primarily served institutional customers - until its online trading arm, Interactive Brokers LLC, opened up its proprietary trading platform to retail customers in 1998.

Unlike most online brokerages, which are browser-based, Interactive Brokers asks customers to download trading software, which works over the Internet or a leased line. This offers customers faster executions and continuous price updates, said David Friedland, managing director of the company's Asia Pacific region.

Interactive Brokers has customers in 71 countries and connections to 39 exchanges in 17 nations, according to Timber Hill Chairman Thomas Peterffy. Each customer can buy and trade stocks in his own country, he said. In addition, most customers can buy U.S. stocks, and European residents can buy stocks in European countries.

The reason everyone can't buy stocks everywhere isn't technological - it's regulatory. Peterffy said it probably won't ever be possible.

"The SEC and the Commodities Future Trading Commission want to make sure that customers are protected," he said. "There will probably always be certain rogue countries that come up with fake securities."

Analysts said they agree that technology isn't delaying global stock-market integration. "The main obstacle is regulations in various countries about who can buy and sell stock," said George Barto, an analyst at Stamford, Conn.-based Gartner Group Inc.

And Rosemary McFadden, director of global business development at DLJdirect Inc. in Jersey City, N.J., said her company will be ready to offer customers a greater variety of stocks when the laws change. "The technology is the easier part of this," she said. "But regulators, by definition, don't move all that quickly even though clearly the technology has created a global financial village."

Copyright © 2000 IDG Communications, Inc.

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