Reinvent rules for remisiers
THE Securities Investors Association of Singapore (SIAS) has hit one nail on the head with its call to revamp the way that remisiers, or retail trading representatives (TRs), are paid. This is a fundamental consideration - one that we have raised before in this Hock Lock Siew column such as "Vital to engage retail brokers too" (Aug 3, 2012) and "SGX should seriously meet retail needs" (Feb 19, 2014) - but has not been addressed.
Equally important, however, is that TRs today find themselves caught between a proverbial rock and a hard place - on the one hand, they are told that they have to reinvent themselves to meet the challenges posed by deregulation, the Internet and a retail body that demands more value for their money yet on the other hand, no one really has a clear idea of how this reinvention is to be best undertaken. Worse, the rules appear to be working against TRs trying to expand their role as plain order takers.
The problem is that under the Securities and Futures Act, TRs are barred from offering investment advice, even though they have to sit for exams to trade or execute trades in complex instruments known as Specified Investment Products or SIPs.
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