Charles Schwab & Co. threw its hat into the Japanese market Wednesday.

San Francisco-based Schwab said it has signed an agreement with a consortium - led by Tokio Marine and Fire Insurance Co. Ltd. of Tokyo - to establish a brokerage operation there in the fall.

Schwab, the leading U.S. on-line brokerage firm, would take a 50% stake in the venture, with Tokio Marine making a 30% to 35% investment. The remaining stake would be taken by Bank of Tokyo-Mitsubishi Ltd., Mitsubishi Trust and Banking Corp., and Meiji Life Insurance Co.

The Japanese companies, known as the "group of four," are part of the same business group. Financial terms have not been determined, a Schwab spokesman said.

Initially the joint venture would employ about 50 people in Tokyo, the spokesman said, and offer Japanese investors the opportunity to trade U.S. stocks and bonds as well as Japanese and offshore mutual funds.

Investors would be able to trade on-line and using a 24-hour hot line. Schwab also plans to open a branch office in Tokyo.

Tokio Marine is "a well-known, respected brand," said Louis E. Valencia, the president of Schwab International.

Mr. Valencia said Schwab considered a number of options, including making acquisitions or going it alone.

"We thought a Japanese partner would accelerate our success," he said. Schwab has brokerage operations in Hong Kong, the United Kingdom, Canada, the Cayman Islands, and Puerto Rico.

Japan presents a good opportunity for U.S. companies looking to spread their wings. Some analysts estimate that the Japanese have as much as $10 trillion to invest, with only a fraction of that already socked away in mutual funds.

Schwab is the latest U.S. firm to capitalize on a loosening of regulations in Japan in recent years. In 1996 Japan began letting foreign companies sell mutual funds to Japanese investors and in December it gave Japanese banks and insurance companies a green light to sell funds.

Joint ventures have proven the most popular way to access the Japanese market, with 25 companies choosing that route in 1998, according to Cerulli Associates of Boston.

Schwab will find itself competing against Merrill Lynch & Co., which set up its own Japanese operation last year after hiring thousands of brokers from the defunct Yamaichi Securities.

Schwab's Japanese announcement came the day after New York-based Merrill said it plans to take on Schwab in the U.S. on-line trading market.

"There's been a lot of expansion in Japan recently," said Bill Burnham, an electronic commerce analyst with Credit Suisse First Boston Group in San Francisco.

Both E-Trade Group of Palo Alto, Calif., and DLJdirect, the on-line broker unit of the New York investment bank Donaldson, Lufkin & Jenrette Inc. are in Japan through joint ventures, Mr. Burnham said.

However, Schwab should be able to catch up, given the relative youth of the investment market in Japan, he said.

Mr. Valencia of Schwab said he welcomes the competition.

"I think (having) a number of competitors can help accelerate the growth of the market," he said.

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