(Corrects paragraph six to James Gorman and not Thomas Gorman)

Former Morgan Stanley banker John Hyman will not join Nomura <8604.T> to become its new co-head of global finance at its London operation as had been expected due to regulatory issues, a source said on Saturday.

A spokesman for the Japanese bank confirmed that Hyman would not be coming on board but would not give further details.

The source, who is familiar with the recruitment talks, said Hyman's move had been blocked by an issue which would have involved the UK watchdog, the Financial Services Authority.

Reuters could not reach Hyman for comment.

The FSA, which has been taking a more active role in oversight of top job recruitment in banking following the global financial crisis, declined to comment.

Hyman's departure from Morgan Stanley earlier this year surprised the industry, but the bank played down the move at the time, with sources stressing it had no connection with the management shake-up instigated by incoming CEO James Gorman.

Failing to get their man will prove a disappointment for Nomura given Hyman's reputation. He had most recently been co-head of global capital markets at Morgan Stanley, having joined the firm in 1993 and then served in mostly equities-related capital markets roles.

(Reporting by Mark Baker at IFR, writing by Matt Falloon, Editing by Douwe Miedema)