Charles Schwab, the world's largest online broker, will launch an online Hong Kong stock trading service in the fourth quarter, putting pressure on other international houses in the SAR. Christina Hui, regional general manager of Asia, said the United States-based brokerage had about 35 per cent market share of online stock trading in the US, and aimed to secure a significant market share in Hong Kong. 'With our technology and international background, I am quite positive we could secure a prominent market share in Hong Kong,' she said. Local brokers expressed a lack of concern about the arrival of the on-line broking giant. Choi Chen Po-sum, chairman of local broker industry body, the Institute of Securities Dealers, said: 'I don't think Charles Schwab will put much pressure to the small local player as it will not like to target the small retail investors. 'It will more likely compete with the big players, just as Merrill Lynch or Goldman Sachs in Hong Kong.' Ms Hui, confirming this point of view, said the broker would like to target local customers with accounts ranging from about US$150,000 to US$200,000. The online broker has 6.9 million customers worldwide, and its average account size is US$200,000. The US-based brokerage would allow clients to trade local shares on the Internet, mobile phone, fixed-line phone, or at its own branch, she said. 'According to our survey, Asian customers like to have personal contact, so we decided to expand our branch services while offering the online services,' she said. The firm would open a street-level branch in the fourth quarter to attract more retail public. In the US, the online broker has 364 branches, although 70 per cent of its transactions are carried out on the Internet or by mobile phone. 'The clients like to do trading on the Internet, but they also like to visit the branches to contact our analysts to discuss their portfolio,' she said. 'The Internet will never replace the branch network of securities houses, but the branch will become more like a services centre, rather than a trading place.' Since setting up in Hong Kong in 1997, the broker has offered online trading for US securities, mutual funds and debt securities in the SAR. Ms Hui said the firm had not launched local stock trading services as it was waiting for the Hong Kong Exchanges and Clearing to introduce its new trading system - the third generation of Automatic Order Matching and Execution System (AMS/3) - this quarter. Only after the launch of the AMS/3 could brokers launch US style on-line trading services, in which investors can input trading orders into the exchange directly via Internet or mobile phones, she said. The world's second-largest online broker, TD Waterhouse, started trading local stock earlier this year. Local brokerages such as Celestial Asia, KGI, Boom and Tai Fook also receive Internet trading orders. They also wish to introduce US-style online trading after the introduction of AMS/3. Ms Hui believed on-line trading would develop rapidly in Hong Kong in the next few years. 'At present, 40 per cent of all retail stock trading in the US is done through Internet. We expect the same trend in Hong Kong.' Ms Hui said Charles Schwab would not compete by offering low prices in Hong Kong. 'In the US, we have found that clients are not that concerned about price, but more on the speed of execution of trades and services quality,' she said.