* John Phizackerley to take over from Terry Smith as CEO
* Appointment effective Sept. 1
* Smith to remain with Tullett as consultant (Recasts, adds context, comments from former colleague, share price)
LONDON, July 17 (Reuters) - Tullett Prebon has appointed a former executive at Nomura to lead the British interdealer broker through one of the toughest periods of structural change in its history.
Tullett, whose staff match buyers and sellers of currencies, bonds and other tradeable instruments, named John Phizackerley as successor to CEO Terry Smith, who has been at the helm for the last eight years.
Smith, a prominent character in London financial circles, known for his outspoken nature and fierce rivalry with competitors, stepped down from the top role to focus on his asset management business Fundsmith.
He leaves Phizackerley, who takes over on Sept. 1, with a big task: helping the company adapt to a massive reshaping of the industry.
Interdealer brokers like Tullett, ICAP and BGC Partners have seen revenues decline as investment banks pull back from risky trading activities to comply with new rules brought in following the financial crisis.
Tullett's revenue fell 6 percent to 803.7 million pounds ($1.37 billion) last year.
Brokers have also faced sweeping reforms to their own industry, as regulators push more derivatives trading onto electronic platforms to make the market more open and safer.
Their troubles have been deepened by years of very low interest rates, which dampened market volatility and reduced revenue from trading products such as interest-rate swaps.
ICAP CEO Michael Spencer on Tuesday called it "as bad a drought as I've experienced in my entire career" and confirmed the broker was cutting staff.
Tullett declined to say what Phizackerley's appointment would mean for the company's strategy because it is due to report interim results on July 29.
But when it said last month that Smith would be leaving, its shares rose, with investors speculating that a new CEO may be more open to a merger with a rival - something analysts said could help smaller interdealer brokers in the new environment.
A former colleague of Phizackerley at Nomura said it was likely that he would take his time before making any big changes, preferring instead to familiarise himself with the company and ensure staff are up to speed with developments.
"He's a diplomat: he actively solicits advice and comes to his own view. He is not afraid to make changes ... but takes internal communications seriously, preparing staff and giving updates. He doesn't sit in an ivory tower," the person said.
Phizackerley, 52, who prefers to be called "Phiz", started out as a mining engineer with Anglo American. He later became a research analyst, working for more than 20 years at Lehman Brothers.
After Lehman's collapse in 2008, he joined Nomura, eventually becoming CEO for the Europe, Middle East and Africa region. He left the Japanese bank in 2013.
Tullett said former boss Smith would work as a consultant for the firm over the next two years, advising the chairman and the board. The 61-year-old will be paid 250,000 pounds ($427,800) per year for his services, it added.
Tullett shares, which have fallen more than 30 percent this year, were up 0.8 percent at 252 pence at 1231 GMT against a slight fall in an index of UK small and mid-cap firms. ($1 = 0.5844 British Pounds) (Reporting by Clare Hutchison; editing by Ruth Pitchford and Tom Pfeiffer)