LONDON Nov 13 Nomura plans to complete
the merger of its European equities units by June, in a move
that will position the Japanese to meet British regulatory
reforms outlined last week.
Nomura is combining its two European equity platforms -
Nomura International and Instinet - drawing a line under two
years in which the units competed against each other.
"The systems migration is under way and we plan to have
fully migrated the systems and retired the Nomura platform by
the end of June next year," Sam Ruiz, head of EMEA equities at
Nomura, said on Tuesday.
Ruiz said the bank was working in parallel with Nomura
International clients to move them to Instinet, which is owned
by Nomura but run separately from the bank.
Instinet, Nomura International and rivals such as Deutsche
Bank, Morgan Stanley and UBS, make
money by finding the best share deals available on behalf of
pension and hedge fund clients.
Such brokers have struggled to stay profitable in recent
years as trading dried up, with uncertainty linked to the euro
zone debt crisis spooking investors.
Nomura sees Instinet having the advantage of being a
client-only platform on which the bank does not trade on its own
behalf, meaning clients can be sure they are not competing
against the bank.
"As a purely agency broker, Instinet is unconflicted so the
client is happier to share more about the trade which ultimately
enables the broker to do a better job," said Ruiz.
On Friday, the Financial Services Authority, Britain's top
markets regulator, called for industry feedback on so-called
conflicts of interest - where asset managers buy goods and
services with client money.
The FSA said most asset managers reviewed between June 2011
year and February this year could not show their clients were
avoiding inappropriate costs.
The regulator gave asset management bosses until February to
respond and said it would continue to look for evidence of
conflicts of interest.
Tighter regulation around conflicts of interest could force
asset managers to use agency brokers such as Instinet rather
than large investment banks which currently dominate share
trading in Europe.