(Reuters) - HSBC Holdings, Europe's biggest bank, said it has started a review of whether to move its headquarters out of Britain following regulatory and structural changes in the industry.

Shareholders have urged the bank to consider moving its headquarters to Asia, probably back to Hong Kong, due to a hefty UK bank tax and other costs associated with being based in London.

"The board has therefore now asked management to commence work to look at where the best place is for HSBC to be headquartered in this new environment," said HSBC Chairman Douglas Flint on Friday.

"The question is a complex one and it is too soon to say how long this will take or what the conclusion will be; but the work is underway."

Reuters reported on Sunday that executives at HSBC and its rival Standard Chartered were looking at quitting London for Asia because a big jump in Britain's bank levy made staying financially painful. Investors told Reuters they wanted the banks to do a thorough analysis.

The decision for a formal review was taken by the board on Thursday after several investors raised the issue in recent meetings, a person familiar with the matter said.

Flint will tell shareholders at the bank's annual meeting later on Friday the bank needed to position itself in the best way to support the markets and customers "critical to our future success" and also needed to take into account the requirement to separate its British retail business from the rest of the group by 2019.

Some investors said that could be more significant than the bank levy and be the catalyst for the bank to move.