The discount brokerage wars have shifted to a new battleground-the United Kingdom.

In the last two weeks, Charles Schwab & Co. has lured 1,000 new accounts to its British discount brokerage unit, senior officials said. The new accounts are all former clients of Fidelity Brokerage, which is in the process of shuttering its U.K. shop.

Schwab is winning over the Fidelity customers even though Fidelity has agreed to refer its British clients to a unit of Barclays Group. This month, Fidelity and Barclays jointly mailed fliers to Fidelity's 15,000 active U.K. clients inviting them to roll their accounts over to Barclays Stockbrokers.

Schwab would have liked to strike a similar arrangement with Fidelity, said Tom Seip, president of San Francisco-based Schwab's mutual fund and international businesses. But when that did not pan out, Schwab began targeting Fidelity customers through ads in the British media.

"Fidelity's exit from the business is a great opportunity," Mr. Seip said.

After an 11-year stint in Britain, Boston-based Fidelity Investments said this month that it would close its brokerage unit there because of regulatory hurdles stemming from technical reporting difficulties.

In the joint mailing, Fidelity customers switching to Barclays were promised a seamless account transition and the ability to continue trading when Fidelity ceases brokerage operations this month.

Schwab has begun running ads aimed at Fidelity's customers in newspapers and in the daily Financial Times, said David Harding, a U.K.-based Schwab managing director. Schwab garnered over 1,000 new accounts from the campaign and has fielded another 1,000 inquiries, all from former Fidelity customers, Mr. Harding said.

He said that Fidelity customers are choosing Schwab even though their accounts will be frozen for "three or four days" while transfers take place.

Fidelity may have avoided a joint marketing push with Schwab because the two firms compete so closely in the United States, said Alex Stein, a consultant with Gomez Advisors, a Boston research firm that focuses on on- line and discount trading. Mr. Stein described Fidelity's choice of Barclays as only "half a favor" to the bank.

"Fidelity has to keep their brand name unsullied," because the firm will continue to be involved with the investment management business in the United Kingdom, he said.

Schwab has also managed to lure some former Barclays customers, although that number is "less than 100," Mr. Harding said.

Barclays referred questions on account roll-overs to Fidelity. A Fidelity spokeswoman said she could not supply the number of Fidelity customers that have moved accounts to Barclays.

However, she said that Fidelity customers were given three choices in the joint mailing: They could liquidate their accounts, roll them over to Barclays, or nominate another broker.

"Schwab is an aggressive marketing company, and if they're advertising, that's fine. There are 15,000 active traders that now need to go somewhere else," the spokeswoman said.

Both Mr. Seip and Mr. Harding said that Schwab's success in the United Kingdom is affected by factors other than Fidelity's pullout.

Record returns in the British equity market and a change in attitudes toward investing among the British public have fueled Schwab's business across the water, they said.

"We were quite frankly surprised to see Fidelity exit the business (in the United Kingdom), because business has never been better for us and, we presume, for others," Mr. Seip said.

Mr. Harding said that Schwab is distinct in its specialization in discount brokerage. Its main U.K. competitors are the clearing banks, including Barclays, Lloyds Bank PLC, and National Westminster Bank PLC. "They've all set up discount brokers as a value-added service to their captive retail banking customers," he said.

Though Barclays is a good competitor to Schwab, Mr. Seip said, it "is viewed as a bank and a great one; we're viewed as the place for serious investors."

Schwab purchased its U.K. business from Birmingham-based Sharelink Investments Services several years ago and changed the name last fall. It has two branch offices, one in Birmingham in the north of England and the other in London.

Like Barclays, Schwab's U.K. unit has 600,000 accounts, with 40% actively traded, Mr. Harding said. In November, Schwab introduced a telephone brokerage capability for a fee of about $27.25. Schwab also offers e-mail trading but is tweaking Internet access, he said.

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