UBS declined to comment.

French trading software firm Murex and Ion Trading have been finalized to handle bookings and electronic exchange gateways, the source said.

The combination of a regulatory drive to make markets less risky, a reduction in banks trading for their own account and the end of a 30-year bull market in fixed income is forcing all banks to rethink their operations and, in most cases, shrink.

Europe's leading investment banks took a trading revenue battering in the third quarter last year that gives a glimpse into the upheaval facing the industry as a whole.

Fixed Income, Currencies and Commodities units are particularly vulnerable to the sweep of regulatory change to make markets more transparent and banks take less risk, in a bid to prevent another financial crisis.

Murex and Ion Trading could not be reached for a comment outside of normal business hours.

(Reporting by Aashika Jain in Bangalore; Editing by Nick Zieminski)