TD Bank Financial Group and Ameritrade Holding Corp. confirmed Tuesday that they're holding discussions regarding a potential transaction involving TD Waterhouse USA, the U.S. operations of the bank's wealth-management subsidiary. The companies said they would have no further comment until an agreement is reached. Last year, E-Trade Financial Corp. had held similar talks with TD Bank, but a deal wasn't reached.

Falling commissions and decreasing trading volumes have spurred consolidation talks in the online brokerage industry. Ameritrade's average client trades per day were 167,209 for the second quarter of fiscal 2005, down 21% from 211,917 for the second quarter of fiscal 2004. In March, it lowered its options contract pricing from $1.50 to 75 cents per contract, which the company expects will reduce average commissions and clearing fees per trade in future periods.

Earlier this month, Ameritrade turned down a merger bid from E-Trade Financial Corp. but said it would continue to explore strategic opportunities.