Marshall Harlow Takes Spot Foreign Exchange Prize As Broking Mergers Shrink Industry

LONDON -- A new FX broker stole the show in the spot FX broking category in the 2000 Best Banks in FX survey. Marshall Harlow -- the spot FX alliance between rivals Prebon Marshall Yamane and Garban-Intercapital -- took the top spot in a race that now has only two competitors.

Mike Plant, chief executive of Marshall Harlow in London, says its strength lies in "the combination of the two businesses. It brought together the client bases of both companies, [creating] more liquidity in the voice broking market."

Prebon and Garban-Icap opted to merge their spot FX broking operations in New York and London last January in response to increased automation in spot FX broking. Both had recently completed their own mergers: Garban merged with Intercapital in September 1999, while Prebon Yamane joined up with MW Marshall in June 1999.

The alliance leaves Tullett & Tokyo Liberty as Marshall Harlow's only major competitor in spot FX.

Prebon Marshall Yamane came first overall in the FX broking section.

Tony Verrier, deputy chief executive of Prebon's Europe, Middle East and African operation in London, says Prebon's success comes from a continued focus on voice broking.

"Voice broking has continued to assert its role in the FX market, offering a greater depth of information, and more flexibility than interactive electronic trading systems," he says. "The key was to ensure we could offer sufficiently concentrated liquidity to ensure we offered a strong and viable alternative to those systems. In spot FX we chose the collaborative route, while in forwards we chose to grow organically -- strengthening teams and enhancing technology." He says the brokerage has made significant progress in both areas as a result.

Meanwhile in forwards FX broking, Tullett & Tokyo Liberty -- the result of a merger between Tullett & Tokyo and Liberty Brokerage in January 2000 -- snatched first prize.

Michael Brown, global head of forwards FX at Tullett & Tokyo Liberty in London, says the firm's hybrid approach to broking -- combining voice broking with electronic systems -- was key to Tullett's success.

"We believe this reflects our ability to deliver the only hybrid system combining both voice-broking and electronic trading platforms in 'FastForwards'. This has no doubt differentiated us from our competitors," he says. FastForwards, Tullett's online broking system for FX forwards, was launched earlier this year.

Prebon, which came second in the forwards FX broking category, says it is disappointed to have missed out on a third award to add to its top spots in the overall category and in spot FX in the firm's Marshall Harlow incarnation.

Verrier told FX Week: "We feel that we also have the strongest forwards FX team of any broker in that market. Still, the fact that we've come second will certainly ward off any complacency. We'll be trying even harder over the next year."