Tullett Prebon Ltd

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Tullett Prebon
Tulletprebon.jpg
Founded 1868
Headquarters London
Key People Rupert Robson, chairman, John Phizackerley, CEO
Employees 2,600
Products Inter-dealer broker, financial data
Website www.tulletprebon.com

Tullett Prebon is a broker in wholesale financial markets and energy sectors, facilitating the trading for commercial and investment banks, hedge funds and buy-side institutions. It is among the largest inter-dealer brokers in global fixed income securities, money markets, capital markets, equities, credit and associated derivatives products. The firm has offices in 24 countries and operates voice, hybrid, electronic, volume matching, algorithmic matching and risk mitigation platforms.

It is now part of TP ICAP Group.[1]

The firm, created in 2004 when Collins Stewart Tullett acquired Prebon Yamane, is also a provider of real-time price information from the wholesale inter-dealer brokered financial markets.

Nomura’s former European head, John Phizackerley, the former European head of Nomura, took over as Tullet's CEO from departing chief Terry Smith on August 31, 2014.[2]

On November 11, 2015 Tullett Prebon announced it had agreed to acquire the global brokering business of ICAP in an all-stock deal.[3] The acquisition includes ICAP’s voice-broking divisions in Europe, Asia Pacific and the Americas and its 40.2 percent interest in iSwap, a global electronic-trading platform for interest-rate swaps, Tullett said in a statement. The three regional businesses included in the deal employ 1,458 voice brokers.[4]

Tullett completed the $1.6 billion purchase of ICAP's voice-broker business, rebranded as TP ICAP Plc, in December of 2016.[5]

The company said it was moving into voice broking in an era of electronic markets and computerized trades because many transactions in assets such as interest-rate swaps and credit-default swaps can only be made via telephone. The deal reshapes voice broking in the U.S. and Europe from a market split among five large brokers (ICAP, Tullett, BGC Partners Inc., GFI Group Inc. and Cie. Financiere Tradition SA) to one dominated by just three firms: TP ICAP, as Tullett will be rebranded, BGC and Tradition.[6]

History

Prebon

In 1868, Matthew Marshall founded a company called Marshall & Son. Marshall was well connected as his father, also named Matthew, was chief cashier at the Bank of England, responsible for the Bank Charter Act of 1855. Marshall junior began his working career at the Bank in 1839, before moving into broking.

In 1910, Matthew Wilberforce Marshall (son of Matthew Marshall junior) became senior partner of Marshall & Son. In 1923 the company changed its name to M.W. Marshall and Co. The business flourished and the Marshall family remained in active control of the company until 1967.

In 1967 the Marshall family sold out to Charles Fulton and Co. and in 1972 the company was acquired by Mercantile House Holdings plc.

Between 1972 and 1991, first Mercantile House and then International City Holdings (ICH) provided consolidation platforms for many of the independent broking houses: Prebon (US) money broker, Charles Fulton and Co., Woellwarth & Co. (established 1926), Kirkland-Whittaker (established 1951) and Babcock & Brown (established 1986).

The combined group known as Babcock Fulton Prebon was the subject of a management buyout in 1991. The following year in recognition of its relationship with the Yamane group of companies in Japan, the company was renamed Prebon Yamane.

In 1999, Prebon Yamane and M.W. Marshall merged and formed the largest OTC broking group of the time, globally broking an underlying value exceeding US$55 trillion annually. This company was called Prebon Marshall Yamane.

Tullett

Meanwhile, another wholesale broker called Tullett & Riley Co Ltd founded in 1971 by Derek Tullett, was also broking foreign exchange.

In the second year of operating, the company became the first international money broker to open a New York office under its own name, and so throughout the seventies and eighties continued to develop a number of overseas offices.

In 1983, The Tokyo Forex Company, Japan’s largest money broker, bought a significant stake in Tullett & Riley and changed its name to Tullett & Tokyo Forex International Limited, thus enabling the company to establish themselves in the international markets.

Elsewhere plans were moving ahead for 36 primary dealers to jointly own their own brokerage firm. This firm was called Liberty Brokerage Inc. and was a division of Mabon Nugent.

Liberty, formerly known as PGB Securities, was then acquired by Salomon Brothers and five other securities dealers and banks including Citicorp. They then became known as the Liberty Group which comprised three specialized brokerage subsidiaries; Liberty Brokerage Inc, Liberty Brokerage Securities Inc and Liberty EurAsia Ltd.

Collectively, the group became one of the largest international full service brokers of fixed income securities.

In December 1999, Tullett & Tokyo merged with Liberty Brokerage and created one of the world’s largest inter-dealer brokers, the company then became known as Tullett & Tokyo Liberty plc. The merger also brought together two of the leading providers of technology in electronic trading.

A year later, Tullett & Tokyo Liberty was rebranded Tullett Liberty. In March 2003, Tullett Liberty was acquired by Collins Stewart plc and the group became Collins Stewart Tullett. In October of 2004 Collins Stewart Tullett acquired Prebon Yamane, bringing together two of the oldest and most well respected brokerage houses in the world.

The combined company is now known as Tullett Prebon.[7]

During late 2007 and into 2008, Tullett Prebon and GFI Group Inc. engaged in merger talks. However, on September 9, 2008, GFI announced that it terminated discussions with Tullet Prebon over disagreement on the terms of a deal.[8]

Products and Services

After the passage of the Dodd-Frank Act the firm decided to create a Swap Execution Facility to adjust to the changing regulatory environment for over-the-counter swaps. In preparation for the SEF, Tullett Prebon announced in November 2011 an agreement to have the National Futures Association handle its regulatory oversight services. Tullett Prebon would be competing with a number of other firms in its space such as GFI Group, ICAP and others, which also are implementing SEF platforms. Tullett Prebon filed a SEF application with the Commodities Futures Trading Commission on August 26, 2013. Shawn Bernardo, the firm’s senior managing director of e-broking, was named the chief executive officer of the SEF. [9] The CFTC granted temporary registration of the SEF on September 25, 2013.[10]

In July 2012, Tullett and Integral Development corp., announced the beta launch of tpSPOTDEAL, a spot FX platform. tpSPOTDEAL is an anonymous FX trading platform with a prime broker as central counterparty for all trades. The platform has 10 liquidity providers that makes a two-way price resulting in liquidity on the bid and offer regardless of the market conditions. The platform will also be free of cost to the end user. [11]

On February 6, 2013, Tullett Prebon, ICAP and Marex Spectron, together launched Tankard, a series of trade-backed natural gas indices for UK and European hubs. The Tankard indices initially covered four traded natural gas hubs in Europe-the UK National Balancing Point (NBP), Dutch Title Transfer Facility (TTF), German NetConnect Germany (NCG) and GASPOOL. The trades that make up the Tankard indices are physically-settled natural gas forwards. [12]

Key People

Directors

References

  1. Tullett Prebon. Tullett Prebon.
  2. Tullet appoints new chief executive officer. The Trade.
  3. Tullett Prebon Agrees to Buy ICAP’s Global Brokering Business. The New York Times.
  4. Tullett Prebon May Purchase ICAP's Voice-Broking Business. Bloomberg.
  5. Tullett Prebon Completes $1.6 billion Deal for ICAP Broker Unit. Bloomberg.
  6. Tullett's Bet on ICAP Shows Conversation Isn't Dead. Bloomberg.
  7. Our Story. Tullett Prebon.
  8. GFI and Tullet Prebon no longer talking merger. The Deal.com.
  9. Tullett Prebon announces filing of SEF application with CFTC. Tullett Prebon Press Releases.
  10. CFTC Approves Tullett Prebon's Swap Execution Facility. Tullett Prebon Press Releases.
  11. Tullett Prebon and Integral Partner to Launch Spot FX Platform. BusinessWire.
  12. Tullett Prebon, ICAP and Marex Spectron launch Tankard trade-backed Natural Gas indices for UK and European hubs. Tullett Prebon Press Releases.