E*Trade Making It Easier For Americans To Invest Overseas

E*Trade Financial Corp. is upgrading its website to make it easier for Americans to buy and sell non-U.S. shares online, taking advantage of the growing of interest of investors in foreign stocks, according to the Wall Street Journal.

Now a pilot program, company plans to make the trading platform widely available in the second quarter. 

The new Global Trading Platform will allow individual-investor clients in the U.S. to buy, hold and sell foreign shares in their local currency in six key markets, the New York-based company stated.

Countries such as Canada, France, Germany, Hong Kong , Japan and the U.K will be available for online trading stocks. Broker-assisted trading in additional countries will be added and E*Trade hopes to eventually include as many as 42 international markets and related currencies in the online system.

Trading commissions will be charged in the local currency. In France and Germany, online trades will cost 15.84 euros, higher than the commission of $6.00 to $12.99 E*Trade advertises online for trading U.S. stocks.

R. Jarrett Lilien, E*Trades’s president, said the company is seeing increased demand from investors to access foreign stocks directly for reasons such as portfolio diversification. He thinks this will prove appealing to two groups of investors that are important to the company, including active traders and wealth investors with $50,000 to $500,000 in investing assets.

“This is a big opportunity,” said Lilien, adding that recent survey of the company’s brokerage customers that found two-thirds of those polled are interested in trading stocks on exchanges outside the U.S.  

However, the expanded access does raise questions about the suitability of foreign stocks for U.S. investors. Americans may find that countries have different standards in areas such as corporate disclosure, accounting and regulation.

The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.