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October 1, 2012

Instinet Beats Out Its Sister Company

By John D'Antona Jr.

Nomura's push into equities in 2009 began with program trading and equity derivatives. It later launched its algo suite, crossing network, analytics, market connectivity, smart order-routing and high-frequency trading business. It was featured in a January, 2011 cover story in Traders Magazine titled, "Tall Order: Nomura Gambles on Huge U.S. Equities Expansion."

The equity business shift could result in about 100 job losses in cash equity sales and trading, according to one broker who spoke with Traders Magazine. Another person familiar with the firm agreed.

One casualty is Ciaran O'Kelly, who ran equities at Nomura's U.S. brokerage arm. O'Kelly is a longtime brokerage exec whose background took him from Salomon Brothers to top positions at Citi, Banc of America Securities and then to Nomura. He has resigned, but is staying on through the end of the year as a consultant. The trading group will be headed by Jonathan Kellner, Instinet's Americas chief.

What made the difference, according to several sources, was Instinet's trading platform, Newport. "They [Instinet] are a success because of their front-end technology; they are always upgrading and have been in the space since the inception of electronic trading," one exec said. "They are always tweaking and upgrading things."

And at least one buysider agreed. Thomas Coleman, director of trading at Richmond, Va.-based Thompson, Siegel & Walmsley, said that while he did not trade with Nomura, he does with Instinet. And he's a fan, saying, "I think Instinet has very good electronic offerings."


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