THE LEGAL POSITION OF A REMISIER

• Citation: (1992) 4 SAcLJ 346
• Published date: 01 December 1992
• Date: 01 December 1992
• Author: WALTER WOON

The problem with writing about remisiers is that there is very little literature on the point. Even the word “remisier” is not to be found in the Oxford English Dictionary. One has to reason from first principles supplemented with a large helping of empirical research.

A remisier is basically a self-employed person whose job is to buy and sell shares on behalf of clients. Remisiers function at the retail end of the market. They do not get CPF contributions from any employer, even though they are affiliated to stockbroking companies. They are not in any sense employed by the stockbroking companies. Rather, they are allowed to use the facilities of the stockbroking companies, in return for payment of a fee. A remisier is remunerated through commission on transactions, a proportion of which is taken by the stockbroking firm for the privilege of using their facilities. As far as the remisier is concerned, the people who trade through him are his clients, not the firm’s.

In the light of the above practice, one might conclude that remisiers are in business for themselves and insofar as they act as agents, they are agents of the clients rather than of the stockbroking firms. This conclusion is in fact misleading.

If one looks at a remisier’s agreement with a stockbroking firm1, one is immediately struck by the fact that it is titled an “Agency Agreement”. Paragraph 1 provides that “the Company [ie, the stockbroking firm] hereby appoints the remisier … as agent of the Company to trade and deal in … securities … in the name of the Company …” Paragraph 12 again repeats that the remisier is an agent. The Stock Exchange’s Bye-Laws also provide that remisiers are agents of the broking firms: see Bye-Law V, clauses 2 and 3. The legal result of all these provisions is that remisiers are agents of the stockbroking firms with which they are affiliated, rather than of the client (as one might expect if one examined the way remisiers conduct their affairs).

The downside of this arrangement is neatly illustrated by the case of Chien Chung Ming v. Kay Hian & Co Pte[1992] 1 SLR 242. The case concerned the misdeeds of one of Kay Hian’s remisiers, a Theresa Eu (“Eu”). The Plaintiff had become Eu’s client when she was affiliated to another stockbroking firm. When she became a remisier with Kay Hian, the Plaintiff’s business followed her2.

The Plaintiff opened a margin account with Kay Hian3. This account was secured by the deposit of shares. Eu cheated the Plaintiff...