Remisier
Encyclopedia
A remisier is an agent of a stockbroking company and receives a commission for each transaction handled (as compared with a paid dealer’s representative, who is a direct employee of a stockbroking company and whose remuneration structure is based on a fixed monthly salary). Although the origin of the word is French
(“remisier” means “an intermediary”), and although remisiers are still a feature of the Paris Bourse
, the term is now most commonly used in the context of the Kuala Lumpur Stock Exchange
(or Bursa Malaysia
) and the Singapore Stock Exchange.
Historically, remisiers first appeared in the region during the colonial period in Malaya
(the collective name comprising the Crown Colonies of Malacca
, Penang
and Singapore
; the Federated Malay States
; and the Unfederated Malay States
), where they dealt primarily in rubber and tin-related companies that were listed on the London Stock Exchange
, on behalf of Malaya-based clients. From the point of view of the stockbroking companies, the use of remisiers allowed them to generate additional trading volumes and revenues without the need to incur a fixed cost base or the need to build a customer base directly. From the point of view of the remisier, the additional financial burden of having to bear – or recompense to the stockbroking company - his or her own operational costs (in today’s context, this may include the rental of office space and ancillary costs, telecommunications costs, and computer hardware and software costs) is outweighed by the potential for substantial commission income through his or her 40% share of the trading commission. In addition, a remisier remains the gatekeeper for his or her own client relationships.
The relationship between remisiers and their stockbroking company were originally based on loose arrangements which varied substantially, both within the industry at large and also within each firm. As the Malaysian and Singaporean stock markets evolved, the respective regulatory bodies implemented the introduction of standard remisiers' agreements governing the relationship between all remisiers and member companies in the stockbroking industry (under these standard agreements, the remisier is regarded as an agent of the stockbroking company to trade in securities in the name of the company. This relationship was not made explicit in the previous arrangements between remisiers and stockbrokers). In regulatory terms, both remisiers and dealer’s representatives are covered by the same licence (a dealer’s representative’s licence) to enable them to interact with clients and trade shares.
The remisier is responsible for any losses which may be incurred by the stockbroking company arising from any securities transaction dealt through him or her. Each remisier has to post a deposit with the stockbroking company to cover clients’ losses in the event of default; this security
deposit is segregated from other assets that are kept by the stockbroking company on behalf of the clients. The stockbroking company is required to take all relevant and reasonable action against clients for the recovery of indebtedness which should be reimbursed to the remisier in the event that the remisier's security deposit has been utilised towards the satisfaction of indebtedness.
Remisiers play an important role on the KLSE and SES, not only in terms of increasing distribution and providing additional liquidity to the market, but also through their role in educating and advising retail investors and the public at large.
French language
French is a Romance language spoken as a first language in France, the Romandy region in Switzerland, Wallonia and Brussels in Belgium, Monaco, the regions of Quebec and Acadia in Canada, and by various communities elsewhere. Second-language speakers of French are distributed throughout many parts...
(“remisier” means “an intermediary”), and although remisiers are still a feature of the Paris Bourse
Paris Bourse
The Paris Bourse is the historical Paris stock exchange, known as Euronext Paris from 2000 onwards.-History and functioning:...
, the term is now most commonly used in the context of the Kuala Lumpur Stock Exchange
Kuala Lumpur Stock Exchange
The Kuala Lumpur Stock Exchange dates back to 1930 when the Singapore Stockbrokers' Association was set up as a formal organisation dealing in securities in Malaya...
(or Bursa Malaysia
Bursa Malaysia
Bursa Malaysia is an exchange holding company approved under Section 15 of the Capital Markets and Services Act 2007. It operates a fully integrated exchange, offering the complete range of exchange-related services including trading, clearing, settlement and depository services.- History :Bursa...
) and the Singapore Stock Exchange.
Historically, remisiers first appeared in the region during the colonial period in Malaya
British Malaya
British Malaya loosely described a set of states on the Malay Peninsula and the Island of Singapore that were brought under British control between the 18th and the 20th centuries...
(the collective name comprising the Crown Colonies of Malacca
Malacca
Malacca , dubbed The Historic State or Negeri Bersejarah among locals) is the third smallest Malaysian state, after Perlis and Penang. It is located in the southern region of the Malay Peninsula, on the Straits of Malacca. It borders Negeri Sembilan to the north and the state of Johor to the south...
, Penang
Penang
Penang is a state in Malaysia and the name of its constituent island, located on the northwest coast of Peninsular Malaysia by the Strait of Malacca. It is bordered by Kedah in the north and east, and Perak in the south. Penang is the second smallest Malaysian state in area after Perlis, and the...
and Singapore
Singapore
Singapore , officially the Republic of Singapore, is a Southeast Asian city-state off the southern tip of the Malay Peninsula, north of the equator. An island country made up of 63 islands, it is separated from Malaysia by the Straits of Johor to its north and from Indonesia's Riau Islands by the...
; the Federated Malay States
Federated Malay States
The Federated Malay States was a federation of four protected states in the Malay Peninsula—Selangor, Perak, Negeri Sembilan and Pahang—established by the British government in 1895, which lasted until 1946, when they, together with the Straits Settlements and the Unfederated Malay...
; and the Unfederated Malay States
Unfederated Malay States
The term Unfederated Malay States was the collective name given to five British protected states in the Malay peninsula in the first half of the twentieth century. These states were Johor, Kedah, Kelantan, Perlis, and Terengganu...
), where they dealt primarily in rubber and tin-related companies that were listed on the London Stock Exchange
London Stock Exchange
The London Stock Exchange is a stock exchange located in the City of London within the United Kingdom. , the Exchange had a market capitalisation of US$3.7495 trillion, making it the fourth-largest stock exchange in the world by this measurement...
, on behalf of Malaya-based clients. From the point of view of the stockbroking companies, the use of remisiers allowed them to generate additional trading volumes and revenues without the need to incur a fixed cost base or the need to build a customer base directly. From the point of view of the remisier, the additional financial burden of having to bear – or recompense to the stockbroking company - his or her own operational costs (in today’s context, this may include the rental of office space and ancillary costs, telecommunications costs, and computer hardware and software costs) is outweighed by the potential for substantial commission income through his or her 40% share of the trading commission. In addition, a remisier remains the gatekeeper for his or her own client relationships.
The relationship between remisiers and their stockbroking company were originally based on loose arrangements which varied substantially, both within the industry at large and also within each firm. As the Malaysian and Singaporean stock markets evolved, the respective regulatory bodies implemented the introduction of standard remisiers' agreements governing the relationship between all remisiers and member companies in the stockbroking industry (under these standard agreements, the remisier is regarded as an agent of the stockbroking company to trade in securities in the name of the company. This relationship was not made explicit in the previous arrangements between remisiers and stockbrokers). In regulatory terms, both remisiers and dealer’s representatives are covered by the same licence (a dealer’s representative’s licence) to enable them to interact with clients and trade shares.
The remisier is responsible for any losses which may be incurred by the stockbroking company arising from any securities transaction dealt through him or her. Each remisier has to post a deposit with the stockbroking company to cover clients’ losses in the event of default; this security
Security (finance)
A security is generally a fungible, negotiable financial instrument representing financial value. Securities are broadly categorized into:* debt securities ,* equity securities, e.g., common stocks; and,...
deposit is segregated from other assets that are kept by the stockbroking company on behalf of the clients. The stockbroking company is required to take all relevant and reasonable action against clients for the recovery of indebtedness which should be reimbursed to the remisier in the event that the remisier's security deposit has been utilised towards the satisfaction of indebtedness.
Remisiers play an important role on the KLSE and SES, not only in terms of increasing distribution and providing additional liquidity to the market, but also through their role in educating and advising retail investors and the public at large.