Saturday 25 May 2019

Top Japanese bank contacts EU clients about Frankfurt migration ahead of hard Brexit

The Old Opera house in Frankfurt, Germany (AP)
The Old Opera house in Frankfurt, Germany (AP)

Kalyeena Makortoff

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.

"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.

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.

Press Association

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