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Tuesday, March 7, 2000
Tradescape.com enters Japan
By TOMOKO OTAKE
In a move that could take the nation's online trading boom to another level, U.S. electronic trading broker Tradescape.com will join with Softbank Finance Corp. to launch Japan's first electronic communications network for securities trading as early as this summer.
The move signals the birth of the first U.S.-style ECN in Japan.
ECNs in the U.S. allow investors to trade securities within their networks instead of placing orders with traditional bourses. They have grown rapidly in the past few years, with experts saying ECNs now account for between 20 percent and 25 percent of all trading volume on Nasdaq.
The New York-based electronic trading system provider will form a joint venture with Softbank Finance, a wholly owned subsidiary of Softbank Corp., to give individual Japanese investors high-speed access to stock markets, the firm's top executive told The Japan Times in a recent interview.
Softbank Finance currently holds a minority stake in Tradescape.com.
Benefits of ECNs in Japan will include more trading choices for individual investors. They will be able to trade stocks listed on Nasdaq and the New York Stock Exchange through online trading networks, which sometimes offer better deals than stock exchanges do.
Yoshitaka Kitao, chief executive officer of Softbank Finance Corp., is expected to take the helm of the new joint venture.
However, the details of the venture -- such as the size of capitalization and the timing of the launch -- have yet to be decided.
"We are going to bring ECN technology and the concept of direct access to the markets to Japan," said Omar Amanat, chief executive officer of Tradescape.com, during a recent online trading expo in New York.
The Softbank-Tradescape plan comes at a time when Japan's online trading is just taking off. Major trading house Mitsui & Co. has recently announced it will set up a joint venture with 11 brokerages to establish a Japanese version of the ECN as early as November.
While the plan is still in the preliminary stages, Amanat said the joint venture is part of Softbank's strategy to expand into all areas of Internet finance.
Tradescape.com, founded by Amanat in May 1997 and with a staff of 115, is growing fast with the proliferation of day trading in the U.S.
The firm's annual revenues grew from $2 million in 1997 to $75 million in 1999. The firm, which is privately held, is projecting revenues of $180 million this year.
The Mitsui-led venture plans to offer online trading after bourses close -- at night and on weekends.
Amanat's firm, however, will offer individual investors trading opportunities 24 hours a day.