Nomura Will Transfer Electronic Trading in U.S. to Instinet Unit

Nomura Holdings Inc. (8604), Japan’s largest brokerage, will use its New York-based Instinet Inc. unit as its main electronic trading arm.

The broker will transfer electronic trading in the U.S. to Instinet, an operator of alternative platforms, according to two people who have been briefed on the decision and declined to be named because the information isn’t public. The Japan branch of Instinet will be closed and folded into Nomura’s local trading operation, the people said. The Hong Kong, Singapore and Sydney offices remain open while no decision has been made in regards to Europe, they said.

“Nomura is fully committed to Instinet and its agency trading model, and is working toward a goal of Instinet becoming the Nomura Group’s electronic trading arm,” the parent company said in a statement.

Nomura bought Instinet for $1.2 billion in cash from Silver Lake Partners in February 2007 as part of a global expansion strategy. Instinet co-owns alternative trading platform company Chi-X Global Holdings Inc. with several brokers including Goldman Sachs Group Inc., UBS AG and Bank of America Corp.

Nomura appointed Joji Watanabe, currently head of its Instinet Japan Ltd. unit, to lead trading execution services in the country, Nomura said in a statement today. Watanabe will stay in charge of Instinet Japan as it winds down.

The Japanese brokerage’s shares have risen 21 percent since hitting their lowest price in at least 37 years in November.

To contact the reporter on this story: Eleni Himaras in Hong Kong at ehimaras@bloomberg.net

To contact the editor responsible for this story: Nick Gentle at ngentle2@bloomberg.net

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