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(Nikkei BP Group)

(No.1 High-Tech News Site in Japanese)

  • Softbank to Set Up Internet Discount Forex Service Firm
  • October 28, 1998 (TOKYO) -- Softbank Corp. said that it will collaborate with Sonnet Financial Inc. of the United States, a provider of discount foreign exchange services using the Internet, to establish a joint venture called Forexbank Co., Ltd. in Japan within October.
    The new company will offer discount transaction fees, as compared with those set by banks, regardless the size of transaction, because it will assemble small-lot foreign exchange trades via the Internet and treat them as a wholesale trade.

    The venture is expected to start business in the first quarter of 1999. It will have an initial capital of 500 million yen (US$4.2 million) and Softbank will hold 60 percent and Sonnet Financial 40 percent of the new company. Yoshitaka Kitao, senior vice president and CFO of Softbank, will serve as president.

    Sonnet Financial was established in 1992. Its clients use PCs with Windows applications or an Internet browser for transferring small-lot international funds.

    When the clients' funds reach the level equivalent to be traded at a wholesale rate, Sonnet Financial changes them to a specific foreign currency. This system delivers interbank forex rates to clients for a low-fixed fee per transaction, said Gady Nemirovsky, chairman and CEO of Sonnet Financial.

    The joint venture, Forexbank, also will provide the same service.

    In the case of sending US$50,000 to the United States from Japan, the typical charge is 54,500 yen (US$460) including transfer fees charged by banks as well as the bank's profit from adding a spread. However, Sonnet Financial charges only about 20,000 yen for the same transaction. Forexbank's fees are not yet decided.

    Forexbank will approach financial institutions in Japan for a range of collaboration.

    "We have already gained approval from the Ministry of Finance regarding laws related to investment and banking," Kitao said.

    Softbank is negotiating with Fuji Bank Ltd. and Sanwa Bank Ltd. on collaboration in acting as a depositary facility for remitted money from customers.

    (BizTech News Dept.)

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    Updated: Tue Oct 27 18:59:32 1998 PDT