Nomura aims to complete share trading merger by June

LONDON Tue Nov 13, 2012 8:32am EST

LONDON Nov 13 (Reuters) - 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.

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