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"Plus ca change, plus ce la meme chose''

The more things change, the more they stay the same
Tuesday, October 27, 2015 - 11:29

LOOKING through some of the articles I've written in the past, I came across some which discussed the dire state of the stock market at the time and the likelihood that stockbroking should be described as a sunset industry.

What was surprising - even to me - was that some of those commentaries were written as far back as 2003, which means broking has been on the decline for more than a decade now. Sure, this is to be expected, what with the industry being deregulated (deregulation started in earnest in 2000) and the increasingly borderless world we live in.

But the issues I wrote about all those years ago are still valid today - how trading reps adapt to changing technology, what type of business models would succeed, the threat of faster computers which can make money with razor-thin margins, investor education, how long contra trading can prevail and so on.

It set me wondering - have brokers really adapted to competitive threats posed by deregulation and the advent of the Internet? How many are still relying on outdated ways of conducting their businesses, including encouraging contra trading?

Is there really any emphasis on fiduciary dutie, looking after the customer and carrying on good, honest and clean operations? I don't know, but I'd have so say I'm sceptical.  I'm reminded of the French saying "plus ca change, plus ce la meme chose'' which means "the more things change, the more they stay the same''.

Two weeks ago, BT ran a letter from remisier Nallakaruppan on the urgent need for the authorities to do more to stimulate the local stock market. This prompted a reply from the MAS, which essentially said the authorities are doing all they can but the market's health is a shared responsibility, not just MAS' or SGX's. Nalla was one of the motivators behind a petition earlier this year to the Finance Minister which received 1,225 signatures - mainly TRs - and he has the best interests of the market at heart.

Problem is, all the recommendations he and the other petitioners came up with don't seem to have been seriously considered by officialdom. I think Nalla and other TRs might also endorse the "plus ca change'' saying, their thinking being that they can propose anything under the sun, nothing will change.

This is the sentiment I get when I speak to them, though I have to admit that I can't see much more MAS/SGX can do - MTR is here to stay, SGX's CEO has said continuous all-day trading is also here to stay, contra trading is likely to go. Like Nalla, the authorities also have the market's best interests in mind when they formulate policy. Hopefully, their efforts will bear fruit and that changes that are implemented will be for the better. I also hope that in 12 years' time, I won't be writing about the same issues again.