* EBS FX volume declining
* Citi analyst says Mandelzis exit disappointing (Adds third source close to company on selection process)
By Patrick Graham and Gertrude Chavez-Dreyfuss
LONDON/NEW YORK July 21 (Reuters) - Former Barclays global head of electronic trading Tim Cartledge is seen as a leading contender to take the helm at EBS BrokerTec after Thursday's announcement that Chief Executive Gil Mandelzis will step down, sources close to EBS said.
Cartledge has been chief strategy officer at EBS since November 2015.
Interdealer broker ICAP Plc said in a statement on Thursday that Mandelzis decided to leave EBS, a unit of the London-based company.
ICAP said Mandelzis will leave New York-based EBS "in due course" without giving a reason for his departure. Mandelzis has been in the job since 2012.
ICAP CEO Michael Spencer said the company was considering internal and external candidates.
Two industry insiders with close ties to EBS said the company has cherry-picked a number of senior staff from banks to refresh a business that dates to the early days of electronic trading in the early 1990s.
As the head of Barclays' fixed income, currencies, and commodities electronic trading, Cartledge helped build the British bank into one of the big three global banking players in foreign exchange, a position it has relinquished since he left early last year.
"I know that Tim Cartledge is seen by everyone inside EBS as being in pole position to take over," one of the sources, a former EBS employee who still works closely with the company, said.
A second source said: "They have surrounded Gil with talent from banks which seems like a fairly healthy thing. It is natural that you replenish the talent base from time to time and natural that someone like that take over when Gil leaves."
A spokeswoman for EBS declined to comment on whether Cartledge was likely to be appointed chief executive.
Speculation about Mandelzis leaving the company had swirled for many weeks.
Like its competitors, which include Thomson Reuters , EBS has been struggling to combat a slide in volumes over the last three years, as the currency market struggled with changes in regulation and a market manipulation scandal.
EBS forex volume for the first six months of the year totaled $105.3 billion, down 15 percent from a year earlier.
A research note from Citi said Mandelzis' departure is a "disappointing development" for EBS.
"Mr Mandelzis has been a key driver of innovation at EBS BrokerTec, both in terms of product development but also in terms of driving a more collaborative approach across different parts of the business."
The company has appointed head hunters Korn Ferry to run the recruitment process and a third source close to EBS said the selection was still in its early stages.
Reporting by Gertrude Chavez-Dreyfuss in New York and Patrick Graham in London; Editing by Cynthia Osterman and Tom Brown