eTrade 2005 Annual Report Download - page 11

Table of Contents
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unlimited ATM transactions on some accounts;
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FDIC-insured sweep deposit account (“SDA”) that automatically transfers funds from customer brokerage accounts;
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mortgage, home equity lines of credit (“HELOC”) and second mortgage loans secured by real estate;
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credit card including the E*TRADE Mileage Maximizer and other consumer loans;
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online access to all deposit account balances and transactions;
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Quick Transfer, our self-directed fund transfers; and
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online bill payment services.
Retail customers are offered cash management and lending products and services via the Internet, automated telephone service and a
limited number of physical sites. The integration of back office systems allows customers the ability to transfer funds between their
investing, trading and cash management accounts, thereby giving them the opportunity to optimize the yield and liquidity of their
funds.
In addition to the services above, our retail segment includes employee stock option management software and services which are
provided to corporate customers. This software system facilitates the management of employee option plans, employee stock purchase
plans and restricted stock plans, including necessary accounting and reporting functions. This business is a component of the retail
segment since it serves as an introduction to E*TRADE for many retail customers who conduct equity option transactions as
employees of our corporate customers, with our goal being that these individuals will become customers for our other products and
services.
Institutional
We act as a specialist on the Chicago Stock Exchange (“CHX”) for listed securities through E*TRADE Capital Markets—Execution
Services (“ETCM-ES”). A specialist is a broker-dealer authorized by an exchange to be a party through which trading on the floor of
the exchange is transacted. As a specialist, we are responsible for maintaining an orderly market in the assigned securities and,
frequently take or are required to take, principal positions in these securities. We have determined that services once provided through
ETCM-ES as an “OTC specialist” on the floor of the CHX (i.e. a CHX specialist in over-the-counter (“OTC”) issues such as NASDAQ
and bulletin board securities) could be transacted more efficiently elsewhere, and thus surrendered our OTC specialist rights in
January 2006.
We act as a market maker in certain OTC issues through E*TRADE Capital Markets, LLC (“ETCM”). A market maker’s function is
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2006. EDGAR Online, Inc.