The Remisiers and Our Society
What is 'Remisier'?
The word 'Remisier' is not found in any English dictionary. It is a French word meaning 'intermediate man'. In the context of the Paris Bourse, a remisier is a half-commission broker. In the present Singapore context, a remisier is a licensed Trading Representative who is attached to a SGX member broking firm and who receives 40% of the commission. Until mid seventies, the commission rate was 50%.
The first remisiers
The first remisiers started work after the 2nd World War with early firms such as Fraser & Co, Lyall & Evatt and J. M. Sassoon. They dealt mainly in commodity stocks (mainly rubber and tin) which were listed on the London Stock Exchange for investors in Singapore and Malaya. These firms, being majority British-owned, depended heavily on well-connected remisiers to develop the local business. The sole qualification for remisiers then appeared to be connection with the broking firms and some well-heeled English-speaking local clients. The terms of contract between remisiers and their firms were based on 'loose' arrangements which vary not only individually, but also within the same firm, not to mention industry-wide. As the market developed in step with increased industrialisation of Singapore and Malaysia in the early sixties, more shares were offered to the public by established companies such as Esso, Shell, Malayan Tobacco, etc.
Formal agency agreements and deposits
Trading volume in stocks and shares increased substantially over the years. As a consequence, more people joined the broking firms as remisiers and formal agency agreements were soon drawn up. Each remisier had to put up a deposit to cover clients' losses in the event of default. The deposits were of various sums ranging from $10,000 upwards depending on the remisiers volume of business. The stock market tends to move in tandem with economic cycles and political events. In 1963, it faced a serious downturn due to the Indonesian Confrontation. The income of remisiers and broking firms declined drastically. A broking firm seat changed hands at a 'princely' sum of $150,000 in 1966. Many rubber brokers and traders became stockbrokers, as the market grew highly speculative. Correspondingly, the risks borne by remisiers increased.
A very strong Bull Run in the early seventies
The highlight of the late sixties was the participation of the Slater Walker Group. This led to a very strong Bull Run till the early seventies. Remisiers are, till today, still talking about the boom days of 1973 when OCBC stocks were traded at $50.00 (when they announced the takeover of Four Seas Bank), Haw Par $18.00, Malayan Credit $15.00. The bubble burst in April 1973 and the market declined until 1977. OCBC was traded down to $3.34 and Haw Par 78 cents. All remisiers suffered a severe loss of income as the market became very quiet and trading volume shrank. Some remisiers had to drop out from the industry and seek alternative employment.
Commission cut & our first association
In 1973, the remisiers' commission rate was reduced from 50% of gross commission to the present 40%. This created a lot of unhappiness, which resulted in the formation of the first Association of Remisiers. The Association lasted only a few years due to lack of support and discouragement from broking firms. The Association arranged for activities like visits to publicly listed companies but even this received poor response. An ex-committee member of this first association still recalls the time when 40 members signed up for a particular outing, only have six members eventually turning up.
Pan-Electric crisis & the birth of the Society
Another historical event was the Pan-Electric crisis in late 1985 when the market was suspended for three days. A few broking firms ran into financial difficulties. In an effort to re-assure the investing public, the authorities started a 'Lifeboat' fund to bailout ailing broking firms. All remisiers had to contribute 25% of their earned commissions to the fund. There was again a general outcry by the remisiers and this led to the formation of the present Society of Remisiers (Singapore), after a meeting at the temporary hawker centre next to the Lau Par Sat. A pro-tem committee, chaired by Mr Lee Wee Seng, was later formed during a meeting at Metropolitan YMCA at Palmer Road. The pro-tem committee held a meeting with the MAS and discussed amongst other things, the main unhappiness the remisiers had over the Lifeboat fund. Fortunately, remisiers' contribution to the Lifeboat fund ceased soon after. In the beginning, the Society held regular meetings with the then SES on a bi-monthly basis. These meetings were chaired by the then SES Chairman, Mr Tan Chok Kian. Various grievances were frankly discussed and some actions were taken. One notable example was the reduction of the transfer fee to a net $2,000 per transfer which, hitherto was $4,000 for the first instance and doubling up for every subsequent transfer to a maximum of $32,000. In addition, the Society has been active in the following areas:
- Organising regular talks which are beneficial to remisiers by experts in fundamental/technical analysis and legal matters;
- Organising social outings including overseas trips;
- Exploring the possibility of financial protection of remisiers against frauds;
- Maintaining close liaison with the Remisiers' Association of Malaysia;
- Generally looking after the interest of remisiers as a whole.
We have come a long way
Despite all its efforts, the Society, which is run by volunteer remisiers and for the interests of all remisiers finds it difficult to increase its membership. Remisiers often question the benefits they will derive by joining the Society. This is difficult to quantify, as without sufficient support, the Society cannot accomplish more. The Society has come a long way. We hope more remisiers will appreciate its existence and come forward and help the Society safeguard our interests particularly in today's fast changing environment.Monday, 09 November 2009 23:38 cmsadmin