In a bid to expand its discount brokerage business, Barclays Stockbrokers said it would pursue customer accounts from Fidelity Brokerage Services' British unit, which is set to close this month.

A unit of the United Kingdom's Barclays Group, Barclays Stockbrokers said it planned to initiate joint mailings with Fidelity's British division this week in an attempt to pick up some of Fidelity's British accounts.

Boston-based Fidelity last week announced plans to close the U.K. brokerage unit it established in 1987. The move came roughly a year after the firm ran into regulatory barriers in the U.K. following technical reporting problems.

Tom Sheridan, a managing director with Barclays Stockbrokers, described the deal with Fidelity as an "alternative supplier arrangement."

Barclays is "effectively the preferred supplier," in that it is the only broker putting an information packet in the Feb. 5 Fidelity mailing, Mr. Sheridan said. The mailing gives Fidelity customers three options: They can transfer their holdings to a Barclays account, liquidate their portfolio, or transfer to another broker.

Barclays plans to invite most of the 15,000 actively traded accounts in Fidelity's U.K. portfolio into its fold, Mr. Sheridan said. Barclays is restricted from pursuing U.K. accounts held by U.S. clients because the firm is not a registered broker in this country.

"If they call us on an unsolicited basis we could take them, but we're not able to take them unsolicited," Mr. Sheridan said.

With 600,000 accounts, Barclays boasts the biggest discount operation in Britain. The firm also offers full commission brokerage or advisory services.

Discount brokerage is taking off outside the United States, said Burton J. Greenwald, a mutual funds consultant based in Philadelphia. "There is recognition in the U.K. that this is a growing market," he said.

Although Fidelity's brush with regulators prompted it to pull up stakes on the brokerage front, the firm is still involved in the investment management business in Britain, Mr. Greenwald said.

Meanwhile, San Francisco-based Charles Schwab & Co., Fidelity's main rival in the discount brokerage arena, still has a presence in the United Kingdom. Barclays may well be more successful picking up where Fidelity leaves off, given its name recognition there, said Geoffrey H. Bobroff, an analyst in East Greenwich, R.I.

The discount brokerage business in the United Kingdom has traditionally focused on individual securities, rather than on mutual funds, Mr. Sheridan said. That is changing, however, and Barclays-which has its own fund family-plans to create additional domestic portfolios to cater to clients, he said.

The firm may also offer an array of funds from other providers, much like U.S. fund supermarkets. On-line trading capabilities are due later this year, Mr. Sheridan said.

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