Three brokerages linked to Nikko Securities Co. formally agreed Friday to brave the upcoming wave of financial deregulation by merging on Oct. 1.

Kaisei Securities Co., Nippon Securities Co. and Yamaka Securities Co. -- all of which serve individual investors -- will form Nippon Global Securities Co., which they intend to turn into a full-line brokerage through additional capital from Nikko.

Officials of the three firms said they expect Nikko to provide roughly 3 billion yen in additional capital to the new company through the private placement of new shares soon after related restrictions are eased Dec. 1.

As a result the Nikko group would have put up about 60 percent of Nippon Global's capital, which would then total about 10 billion yen. The officials said the three brokerages determined that it was near impossible to weather "Big Bang" reforms as individual companies, and that their close ties to Nikko made the merger a natural.

Realignment is expected to rise among the nation's smaller brokerages as they face severe market conditions as well as an increase in foreign competition for the 1.2 quadrillion yen in personal assets in the Japanese market.