Date: November 14, 2014
I refer to the BT Letters to the Editor “It’s not a ‘quality market’ for retail investors” and “Remisiers should stop complaining” published in the Business Times on 12 November 2014.
SIAS is aware that the fall in trading volume on SGX securities has impacted the income of remisiers. SIAS proposes three (3) suggestions to improve and grow the Singapore securities market and remisiers’ income.
Firstly, 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. While there are more avenues today to access information, investors can sometimes be overwhelmed with the amount of information available online. Remisiers, being in regular contact with investors, can help to summarise the key information and risks succinctly to help investors with their stock investment decisions and execution. The should do that. Nevertheless, the current remuneration policy of only 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. SIAS calls on the authorities to review the current remuneration model of remisiers to be aligned with investor interests and in the interest of the market.
Secondly, remisiers and brokers should also play an active role in growing and educating the retail investor base in Singapore. To facilitate this objective, SIAS will launch a progarmme in 2015 that will allow investors to choose and match themselves with the most appropriate remisier. Remisiers will be asked to share their trading and investing styles and share their successes and how they overcome their failures. SIAS will also teach investors how to choose the appropriate remisier that best meet their investment styles and objectives.
Thirdly, SIAS also calls on SGX to develop a new class of professional traders with greater incentives, fee rebates and professional development to trade on SGX securities. This class of traders will provide additional liquidity to our securities market.
On our part, SIAS will continue to step up our investor education efforts. SIAS has partnered with People’s Association and have commenced financial literacy education among senior citizens and will be extending to young working adults. SIAS is planning to help investors by publishing 3 questions from companies’ annual report for investor to ask at AGMs, to improve the quality of meetings. Through better education, shareholder activism and trust, some $55b sitting in banks in Singapore as savings and fixed deposits can be unlocked to help Singapore grow their money. It is in the interest of all stakeholders that the brokers, remisiers, and the regulators come together to grow our capital markets. SIAS will be calling an industry meeting to facilitate this collaboration.
David Gerald
President & CEO
Securities Investors Association (Singapore)
