Interdealer broker BGC Partners to buy rival RP Martin

* BGC Partners (NYSE: BGCA - news) acquires RP Martin's UK assets

* To acquire Swedish, Dutch businesses next year

* More deals seen in tough market (Adds details on RP Martin's Libor fine)

By Clare Hutchison

LONDON, Dec (Shanghai: 600875.SS - news) 15 (Reuters) - U.S. brokerage BGC Partners has agreed to buy London rival RP Martin, the latest step towards consolidation of an industry under pressure from tough new rules for its traditional banking clients, low volatility and rock-bottom interest rates.

BGC said on Monday that it had acquired the UK assets of smaller, unlisted rival RP Martin and would take over its other businesses based in Sweden and the Netherlands in 2015. It gave no financial details.

RP Martin, also known as Martins, declined to comment on the sale.

In May Martins joined the group of banks and brokers that have been fined over allegations that its staff sought to rig the benchmark London interbank offered interest rate (Libor).

It was ordered to pay British and U.S. regulators $2.3 million but Britain's finance watchdog reduced the penalty because the brokerage was unable to pay the full amount on top of other Libor-related fines.

Interdealer brokers -- which make money by matching buyers and sellers of bonds, swaps and currencies -- are battling major changes. These include new, more conservative capital rules that have prompted investment banking clients to cut back certain trading activities, and efforts to push more derivatives trading onto electronic platforms.

Their troubles have been deepened by years of very low interest rates, which have reduced revenue from trading products such as interest-rate swaps.

Many interdealer brokers, including market leader ICAP , have axed jobs, cut costs and repositioned into faster-growing areas like electronic trading and post-trade services to cope.

Analysts have said that in this environment, the number of major players in the industry, currently at five -- ICAP (LSE: IAP.L - news) , Tullett, BGC, GFI Group (NYSE: GFIG - news) and Tradition -- should be reduced to three or even two.

And there are signs of consolidation. BGC is pursuing a takeover of GFI and Tullett bought oil broker PVM earlier this year.

"If there's a time that it (consolidation) is going to happen, it has got to be approaching rather rapidly as they are all suffering the pain at the moment," Societe Generale (Paris: FR0000130809 - news) analyst Michael Sanderson said.

RP Martin, the world's oldest money broker, is known for its strength in broking derivatives based on European interest rates and foreign exchange, but has seen revenue slide in recent years. Analysts said that could improve as rivals forecast increased activity, and some central banks eye higher rates.

BGC said RP Martin's unaudited revenues for the financial year ending Sept. 30 were over $50 million. Turnover was 56.7 million pounds ($88.8 million) in 2013. ($1 = 0.6382 British pounds) (Editing by Clara Ferreira Marques, Greg Mahlich)