The UK's brokerage business is about to be shaken up

The UK's brokerage market could be about to get a big shake-up.

Both the Financial Times and the Evening Standard report that two of the UK's largest brokerages, Tullett Prebon and ICAP are in discussions about a potential consolidation of their businesses.

The Financial Times reports that Tullett has confirmed it is "in discussions with ICAP regarding the possible acquisition by Tullett Prebon of Icap's global broking business."

Any deal would entail Tullett taking on ICAP's "associated technology and broking platforms, associated information services revenue and certain of ICAP's joint ventures and associates."

According to the FT, the company was quick to warn that no deal has been reached, saying that there "can be no certainty that transaction will be agreed."

ICAP said it "confirms that it is in discussions regarding the possible sale to Tullett Prebon of ICAP's Global Broking business, including ICAP's associated technology and broking platforms (including iSwap and Fusion), ICAP's associated information services businesses and certain of ICAP's joint ventures and associates," in an emailed statement.

Earlier, the Evening Standard reported that ICAP, the £2.9 billion ($4.4 billion) brokerage, was set to take on a majority stake in Tullett Prebon. The report claimed that the two firms have been in talks for some time, and that a deal could be completed by next week.

However it now appears than any consolidation of the two firms would be the other way round.

News of a potential merger comes after Tullett Prebon released a pretty pessimistic trading update on Friday morning. In the statement, it announced that the company is set to cut around 5% of its front office staff, roughly 70 of 1,400 employees, and that it expects operating profit margins to drop by around 1.5% from last year.

The news sent shares in Tullett, one of the UK's largest brokerages, crashing by nearly 10% in Friday morning Shares have since rebounded. At midday, shares in both FTSE250 listed companies were up by around 7.5%.

Brokerages have been struggling recently, and Tullett's trading statement this morning blamed "The continuation of low interest rate conditions and compressed bond market spreads in Europe" along with "the more onerous regulatory environment applicable to many of our bank customers whose trading activity has been suppressed by the deleveraging of their balance sheets and lower risk appetite."

Business Insider has asked Tullett Prebon for further comment and is awaiting a response.