Retail investors' activist urges review of remisiers' remuneration model

The flagging share trading volumes on the Singapore Exchange (SGX) have prompted the Securities Investors Association of Singapore (Sias) to suggest ways to grow the market as well as remisiers' income. -- PHOTO: ST FILE
The flagging share trading volumes on the Singapore Exchange (SGX) have prompted the Securities Investors Association of Singapore (Sias) to suggest ways to grow the market as well as remisiers' income. -- PHOTO: ST FILE

SINGAPORE - THE flagging share trading volumes on the Singapore Exchange (SGX) have prompted the Securities Investors Association of Singapore (Sias) to suggest ways to grow the market as well as remisiers' income.

In its latest quarterly earnings update last month, SGX disclosed that the total traded value of securities in the three months to Sept 30 fell by 26 per cent to $63 billion, while the daily average traded value slid by 27 per cent to $1 billion.

The authorities should review the current remuneration model of remisiers to better align with investor interests, said Sias president and chief executive David Gerald in a statement.

"Remisiers, as trading representatives, play an important role in facilitating the flow of information to retail investors and provide them support in their stock investments," he noted.

Despite the proliferation of information in the Internet age, remisiers' role remains important as they can help investors sift through the vast amount of data and summarise key information and risks for their clients in making their stock investment decisions and execution.

Mr Gerald said the current remuneration model for remisiers that is based solely on commission should be reviewed.

"It favours a transaction mindset and not the overall performance of the client's portfolio, nor does it reward performance of long term buy-and-hold strategy."

He believes remisiers and brokers can play an active role in growing and educating the retail investor base in Singapore.

To facilitate this, Sias will launch a programme in 2015 that will allow investors to choose and match themselves with the most appropriate remisier.

It will strive to get remisiers to share their trading and investing styles as well as their successes and experience in overcoming failures.

"Sias will also teach investors how to choose the appropriate remisier that best meet their investment styles and objectives," Mr Gerald added.

He also urged SGX to develop a new class of professional traders with greater incentives, fee rebates and professional development to trade stocks.

He hopes these traders can provide additional liquidity to the moribund securities market.