Instinet “here to stay”, says new Europe CEO
Instinet has appointed Adam Toms as CEO of its European subsidiary, bringing integration between the agency broker and its parent company Nomura one step closer.
Toms, previously co-global head
of electronic trading at Nomura, will succeed Richard Balarkas, who is leaving
the firm to pursue other interests.
In his new role, Toms will be involved in planning the integration of Nomura's electronic trading services with Instinet and exploring potential synergies.
"Instinet is here to stay,” he said. “Our view is that we should have one central electronic offering, and that should be housed under Instinet. We will promote the agency business model and product offering that are at the heart of Instinet. We are keeping the Instinet brand and agency business model very much alive.”
Since its purchase of the European and Asian assets of Lehman Brothers in Q4 2008, Nomura has been offering electronic trading services such as algorithms, direct market access and dark pools both under its own banner and through Instinet, which it purchased from private equity group Silver Lake for US$1.2 billion in late 2006.
Expectations of integration of the two units increased after Nomura revealed plans to cut US$1 billion from its budget after a US$591 million loss in the Q3 2011. Speculation intensified last month when US-based co-chief Anthony Abenante announced he would be stepping down, leaving co-CEO Fumiki Kondo in sole charge.
But while a single electronic trading offering is the goal - Nomura has declared its intention to make Instinet "the Nomura Group's electronic trading arm" - Toms said clients will be unaffected for the time being. “We will move towards convergence and pursue cost synergies, and there will be no change for clients today,” added Toms. “We will continue to run Nomura and Instinet as two independent businesses as we finalise our plans and validate them with our clients.”
In the US, where Instinet regularly achieves a 5% share in equity trading, staff were reassured about the future of the firm's business by Kondo in May, but key decisions were not communicated on overlapping product capabilities.
However, Instinet will no longer operate as a separate broker-dealer in Nomura’s
home market of Japan, where it had previously driven use of electronic trading
through the introduction of crossing services for institutional investors such
as JapanCrossing and CBX Japan. In future, the two crossing services will be
operated on an offshore basis with trades reported to ToSTNeT, the Tokyo Stock
Exchange's post-trade facility.
Toms, who was the head of Lehman Brothers’ European
portfolio and electronic sales trading desk at the time of Nomura’s
acquisition, will be replaced at Nomura by Andrew Bowley and Ben Springett as co-heads of electronic trading.
"We expect Adam's knowledge, experience and leadership will be invaluable as we work to grow Instinet's European business," said Kondo, adding, "Richard has effectively steered Instinet Europe through myriad challenges amidst difficult market conditions. We thank him for his contributions during that time."