Tullett & Tokyo Plc and Liberty Brokerage Investment Corp announced plans to merge, securing a place among the top three inter-dealer brokers globally. The new company, Tullett & Tokyo Liberty, will combine Tullett’s global strength in FX, money markets, derivatives, energy, securities and equity products, with Liberty’s dominance in US Treasury securities, where it holds just under 35 per cent of the market.
The merger will have little impact on the forex division, because Liberty is primarily a fixed income-oriented shop. But David Tuffley, chief executive of Tullett & Tokyo, who will hold a similar position for the new company, says there will be some benefits from Liberty’s forward FX business.
Liberty recently built up its forward FX team in New York, following the hire of some Marshalls brokers when that shop was negotiating a merger with Prebon Yamane. This is an era Tuffley says he will look to integrate with the existing operation at Tullett.
“This merger places us at the forefront of the industry and enables us to provide our customers with professional services across the full range of financial products,” says Tuffley. “With this transaction, we will be able to use our combined resources and expertise to accelerate the transition of our business to e-commerce.”
“Tullett & Tokyo Liberty Plc will be one of the very few companies that will have true global reach and the full complement of inter-dealer broker products, making the company a truly unique competitor,” Tuffley says.
“At the same time, the merger brings together an immense amount of technological know-how. This agreement will make Tullett & Tokyo Liberty Plc not only one of the top three largest inter-dealer brokers in the world, but also one of the leading providers of technology in electronic brokering,” adds Liberty’s CEO Joseph Macchia, who becomes chief operating officer for the new group.
He adds, “We are committed to digital commerce through electronic trading and information distribution and to nurturing the critical aspects and relationships of the voice brokerage business.”
Tullett recently announced plans to launch Fast Forwards, an electronic brokerage system for forward FX, which it is developing in conjunction with Bloomberg. The system is due to enter customer tests in September for release later in the year. Liberty, meanwhile, plans to launch an automated brokerage execution system, Liberty Direct, which will handle high volume and high liquidity brokerage transactions.
The merger plans follow on the heels of similar link-ups among some of Tullett & Tokyo’s biggest rivals, including Garban/Intercapital and Marshalls Finance/Prebon Marshall Yamane.
The merger is conditional upon shareholder and regulatory approval, which is expected by November.