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Nomura contacts EU clients about Frankfurt migration ahead of hard Brexit

The Japanese bank has sent letters to clients about transferring their business to its new Frankfurt entity.

Japanese banking giant Nomura has started contacting clients to transfer business from London to Germany as it ramps up preparation for a hard Brexit.

EU clients of its trading unit are being asked to put together paperwork that will enable them to do business with Nomura’s new Frankfurt entity, which was granted a securities trading licence by the German regulator in June.

Its new entity – which will operate as Nomura Financial Products Europe or NFPE – will have its headquarters in the German financial hub, with branches in Finland, France, Italy, the Netherlands, Spain and Sweden.

A copy of the letter sent to clients, seen by the Press Association, said: “We are ready to begin onboarding clients to this entity so that we are fully prepared in the event of a ‘Hard Brexit’ – i.e. that the UK leaves the EU on the 29 March 2019 and UK financial services organisations lose their passporting rights at that time.

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A general view of Frankfurt Central Station. A number of banks have chosen the German city as their post-Brexit EU hub (PA)

“We recognise that transitional arrangements may extend this deadline but since it is not yet known how comprehensive those arrangements may be, or what services they will cover, we are making plans to ensure that our service to you can continue without disruption in any eventuality.”

Clients who use its trading services will have to put together paperwork that will allow them to continue executing trades and transactions with Nomura.

It is expected that the paperwork will then have to go through checks by the bank itself before the account can formally be transferred to Frankfurt.

Nomura said it expects that its EU operations will be ready for trades and transactions with clients in the first quarter of 2019, but said a formal notice would be sent closer to the time once a “precise start date has been agreed”.

The bank has hired Allen & Overy as legal counsel during the process.

A spokesman for Nomura confirmed the contents of the letter but declined to comment further.

It makes Nomura one of the first London-based banks to reach out to clients in preparation for a post-Brexit trading relationship.

But a City source said most banks with trading operations in the UK are gearing up for similar moves, with clients expected to receive communication in the coming weeks.

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HSBC has said it could move up to 1,000 staff to France in light of Brexit (PA)

EU clients are likely to have to complete the process multiple times, as they often conduct trades with a number of banks who are also preparing for post-Brexit regulations.

It is the latest blow to London’s reputation as a global financial centre, as a portion of lucrative trading revenues are set to be booked on the continent rather than in Britain.

Nomura itself is understood to have prepared to move around 100 staff from London to service its new EU entities.

TP ICAP – which is the world’s biggest interdealer broker – earlier this week confirmed plans to base its EU headquarters in Paris in hopes of safeguarding its continental business after Britain leaves the bloc.

It will join HSBC, which is on course to move up to 1,000 jobs to France, while JP Morgan is looking at relocating around 1,000 front and back office roles across a number of its EU sites.

Among UK lenders, Barclays is on track to bulk up its Dublin operations, while RBS confirmed last week that around 150 staff will help serve EU clients out of operation in Amsterdam, though customers have yet to be transferred

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