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Last updated: December 14, 2009 8:44 pm
Tullett Prebon has offered its entire broking staff the chance to relocate from Britain in a sign of the fallout from the government’s 50 per cent “supertax” on bank bonuses.
The plan was drawn up after Terry Smith, chief executive of the broker and a leading City figure, raised the matter with the company’s board. It was communicated by a memorandum sent to staff on Friday.
The broker has also been studying the possibility of moving its corporate headquarters abroad. No decision is thought imminent.
Nigel Szembel, of Tullett, said: “The board has concluded that it is in the best interests of shareholders to respond to requests from desks to relocate out of the UK, and will seek to facilitate, where possible and appropriate, relocation to the company’s other offices worldwide, which have more certain taxation regimes.”
In his pre-Budget report, Alistair Darling said, until at least April, banks would have to pay a 50 per cent levy on all bonuses of more than £25,000 awarded to “relevant banking employees” who carry out “relevant regulated activities”.
While the decision could mean an exodus of banking and trading jobs, it met a mixed analysts’ reception.
Some said it would be hard to justify given the close relationship between individual brokers and clients. Tullett has about 700 brokers in London.
In its memo, Tullett noted many staff had already expressed concern about “increased uncertainty of the future tax regime” in Britain and had “expressed an interest in relocating to other business centres where the tax regime is more predictable”.
Tullett asked staff to alert colleagues to the memo “[so] they are informed about our response and let us know if they express serious interest”.
Tullett Prebon is one of the world’a largest inter-dealer brokers, an intermediary between banks and other companies in the over-the-counter derivatives markets.
Mr Szembel declined to say where staff would consider moving to but destinations are likely to include Singapore, which has a relatively low personal and corporate tax regime, and Switzerland, home to Tullett’s smaller rival Tradition. which also has a large London operation.
Analysts on Monday said rival inter-dealer brokers would be tempted. “There’s a big war going on in terms of poaching staff and I’m sure others would have to seriously contemplate following,” said Justin Bates, analyst at Daniel Stewart.
Others doubted many of Tullett’s staff would be tempted to leave London given importance of relationships in voice broking.
“[It is] rhetoric at the moment,” said Vivek Raja, analyst at Panmure Gordon. “If you’re in Singapore and your customers are
in the City and Canary Wharf, how are you going to take them out for a knees up?”
Keith Baird, analyst at Oriel, said: “There’s an element of PR [public relations] about this; it’s signalling intent.”
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