- Outsourcing deal is part of global effort to reduce costs
- Hong Kong regulator fined BNP for breaching dark-pool rules
BNP Paribas SA has chosen electronic brokerage Instinet Inc. to handle its Asian cash equities trading as France’s largest lender seeks to cut costs in its investment bank.
“We are confident that our leading platform and technology will add significant value for BNP Paribas and their clients,” Joel Hurewitz, global head of broker-dealer strategy at Instinet, said on Wednesday. “As the market environment continues to evolve, we are focused on seeking and providing partnership opportunities.”
BNP’s decision to outsource equity trading in Asia is part of a global revamp that has been overseen by Yann Gerardin since he took charge of the investment-banking division at the end of 2014. BNP Paribas will probably go into greater detail on the strategy for the investment bank in early February. Instinet is an agency brokerage, a trading platform and the equities execution arm of Tokyo-based Nomura Holdings Inc.
A BNP Paribas spokeswoman said the bank wanted “a scalable best-in-class trading system” for its customers in Asia. She confirmed a statement earlier reported by Reuters.
BNP’s Asian business attracted a HK$15 million ($1.9 million) fine from Hong Kong’s financial regulator in August for multiple breaches of the rules that set out how dark pools should operate. BNP Paribas Internal Exchange, the bank’s dark pool, failed to give priority to the highest priced orders, even though it claimed to do so in material provided to clients, the Securities and Futures Commission said on Aug. 3. The bank also failed to obtain client consent to execute orders in the dark pool, according to the SFC.
The Asia cash equities business executes trades for clients such as corporations, hedge funds, asset managers and other financial institutions in 16 Asian markets. It has dealing centers in Hong Kong, Singapore and Tokyo, according to the bank’s website.