SIAS proposes ways to grow Singapore's securities markets

http://www.channelnewsasia.com/news/sing...l?cid=fbsg

SINGAPORE: The Securities Investors Association of Singapore (SIAS) has proposed three ways to improve and grow Singapore's securities markets. This comes amid concerns that weak trading volumes in recent months have hurt the incomes of remisiers.

Firstly, SIAS is calling for a review on the current remuneration model of remisiers so that it can be aligned with investor interests and in the interest of the market. SIAS said the existing remuneration policy favours a transaction mindset, rather than the overall performance of a client's portfolio, and it does not reward performance of long-term strategies.

Secondly, SIAS said remisiers and brokers should also play an active role in growing and educating the retail investor base in Singapore.

It plans to launch a programme next year that will allow investors to match themselves with the most appropriate remisier. Under the plan, remisiers will be asked to share their trading and investing styles.

Finally, SIAS is calling on the Singapore Exchange (SGX) to develop a new class of professional traders - with greater incentives, fee rebates and professional development - to trade on SGX securities.

On its part, SIAS said it plans to step up investor education efforts, such as providing financial literacy education for young working adults and helping shareholders to engage better during annual general meetings.

How about the quality of the listed companies? and the enforcement of frauds?

(16-11-2014, 11:06 AM)brattzz Wrote: How about the quality of the listed companies? and the enforcement of frauds?

The issues have pending resolution with consultation paper from MAS/SGX. May be the reason SIAS has not included in its proposal.

Quality of listed companies?

Proposal to establish a Listings Advisory Committee. This is to address concerns about SGX’s perceived and actual conflicts of interests in relation to its role as the listing authority.

the enforcement of frauds?

Proposal to Establish a Listings Disciplinary Committee. This is to improve transparency of SGX’s disciplinary process and ensure fair and independent administration of sanctions.

(16-11-2014, 11:06 AM)brattzz Wrote: http://www.channelnewsasia.com/news/sing...l?cid=fbsg

Firstly, SIAS is calling for a review on the current remuneration model of remisiers so that it can be aligned with investor interests and in the interest of the market. SIAS said the existing remuneration policy favours a transaction mindset, rather than the overall performance of a client's portfolio, and it does not reward performance of long-term strategies.

What I really want reviewed is why overseas brokers like Interactive Brokers are not able to service Singapore clients, and why we are forced to pay ridiculous minimum fees just to support the current existing remuneration model for remisiers.

Regards,
theasiareport.com

(17-11-2014, 07:54 AM)theasiareport Wrote: What I really want reviewed is why overseas brokers like Interactive Brokers are not able to service Singapore clients, and why we are forced to pay ridiculous minimum fees just to support the current existing remuneration model for remisiers.

Regards,
theasiareport.com

The SGX requires that all member brokers have a physical presence in Singapore. This incurs costs which are not easy to offset given the small size of the Singapore market, relative to other Asia-Pacific exchanges like Tokyo, Hong Kong or Australia. Interactive Brokers is thus unable to service Singapore clients directly, however they did offer some SGX shares somehow, as they were caught up in the Blumont saga.

As for minimum fees, they exist for 2 reasons:

i. Risk Underwriting

Your commissions include an insurance premium against default, which is why the brokers that have lower minimums require upfront/advance payment.

ii. Industry Structure

There are only a few large stockbrokers in Singapore: UOBKH, MBKE, DBS, OCBC, Phillip. While they may not actively collude, the current oligopolistic situation allows them to maintain essentially identical fees without losing business.

Quote:SIAS is calling for a review on the current remuneration model of remisiers so that it can be aligned with investor interests and in the interest of the market. SIAS said the existing remuneration policy favours a transaction mindset, rather than the overall performance of a client's portfolio, and it does not reward performance of long-term strategies.

You pay peanuts, you get monkeys. If I was paid like a remisier, I certainly would have very little interest in the performance of my clients' portfolios. However, as a hedge fund manager, I am paid on performance, so I behave accordingly.

The corollary to paying for performance is that the remisier pool will shrink even further because very few remisiers are able to deliver advice that will improve their clients' long-term performance - those that can will generally have already become advisors or fund managers themselves. What SIAS is proposing is the elimination of remisiers as they operate today and conversion of remisiers into financial advisors. Some have already done so, those that remain as pure remisiers are either unable or unwilling to make the change. SIAS' proposal would result in these remisiers leaving the industry altogether.

Just my $0.02.

As usual, YMMV.

On average, the total commission for each week day is around: 900M*0.25%=2.25M. Assume 40% goes to all the brokers/remisiers, that is about 0.9M.

There are around 3k-4k brokers/remisiers, so the average earning for each brokers/remisiers is 225/week day, or 4500/month(assuming 20 weekday/month). Maybe my assumptions are too optimistic, but I do not arrive at 1000/month as some of the brokers claimed on Business times.

(17-11-2014, 10:04 AM)zf87 Wrote: On average, the total commission for each week day is around: 900M*0.25%=2.25M. Assume 40% goes to all the brokers/remisiers, that is about 0.9M.

There are around 3k-4k brokers/remisiers, so the average earning for each brokers/remisiers is 225/week day, or 4500/month(assuming 20 weekday/month). Maybe my assumptions are too optimistic, but I do not arrive at 1000/month as some of the brokers claimed on Business times.

This is like saying the median salary of spore workers are 3k plus. How come there can be some pp earning 1k plus per month only. Top brokers can earn 20k per mth. Average or below or those just starting out, its possible they earning 1k plus only.

(17-11-2014, 10:04 AM)zf87 Wrote: On average, the total commission for each week day is around: 900M*0.25%=2.25M. Assume 40% goes to all the brokers/remisiers, that is about 0.9M.

There are around 3k-4k brokers/remisiers, so the average earning for each brokers/remisiers is 225/week day, or 4500/month(assuming 20 weekday/month). Maybe my assumptions are too optimistic, but I do not arrive at 1000/month as some of the brokers claimed on Business times.

How did you get 0.25%? Retail isn't responsible for the bulk of the daily volume, and institutions definitely do not pay 0.25%, most pay less than 0.1%, some don't even pay anything, they only pay SGX clearing fees.

most remisiers cannt make a decent living nowadays.
worst still if they kanna ppl who dun pay up.