About 30 non-bumiputra remisiers from a stockbroking firm are being forced to change their designation so that the company can meet a 30% bumiputra quota to qualify for the universal broker status, which allows it to trade internationally, from the Kuala Lumpur Stock Exchange (KLSE).

The remisiers said on the condition of anonymity that the proportion of bumiputras in Hwang-Development Bank of Singapore's stockbroking arm (Hwang-DBS Securities) is low, falling between 16% and 17%.

Under the new agreement, the remisiers are told to change their designation to paid dealer representatives (PRDs), a deal which they claimed will result in them being much worse off.

As PDRs, they will be given a RM500 basic salary and will not be eligible to participate in the Employees Share Option Scheme or entitled to any medical benefits. The agreement also stated that the appointment is on a contractual yearly basis.

Remisiers of Hwang-DBS Securities work on a contract basis with a designated company and are sole proprietors. The remisiers are brokers for stocks and the company pays them on a percentage basis once the deal is done. The clients are solely the remisiers'.

In contrast, PDRs are salaried staff and bound by the company. They are paid a commission on top their RM500 salary.

Remisiers 'written off'

The non-bumiputra remisiers said that not only are they being 'locked in' with the agreement, which converts them to employees of the company, but they are also being 'written off' as remisiers.

"There is no guarantee that the company will reconvert us to our remisier status once the company has fulfilled the 30% bumiputra remisier quota," said one of the remisiers.

The complainants said there is very little that they can do other than sign the agreement or terminate their contract.

They added that it would be useless to report this to the KLSE. According to them, the executive chairman and managing director of Hwang-DBS, Hwang Sing Lue, is also a member of the KLSE's rules and development board.

Under KLSE's regulations, remisiers who convert to become PDRs will have to pay RM2,000, but if PDRs want to reconvert to become remisiers, they will have to fork out RM20,000 for the first transfer and RM24,000 for the second. If these conversions take place within the same company, no payment need to be made.

"The company has stated that it will not pay the reconversion fee," said one of the remisiers, adding that, "Even though the market is quite bad, we would like to stay on as remisiers and protect our clients."

More than 100,000 customers

According to the company's official [#1] website [/#], Hwang-DBS (Malaysia) Bhd was listed on the KLSE in May 1996.

Hwang-DBS, which is based in Penang, has branches in Shah Alam, Taiping and Johor Bahru.

The principal activities of Hwang-DBS Group are stockbroking, corporate advisory, provision of custodian and nominee services to local and foreign clients, dealing in options and financial futures, asset and fund management, economic and investment research and venture financing.

The website stated that the core business of the Hwang-DBS group is stockbroking which is carried out by Hwang-DBS Securities Bhd. Over the years, Hwang-DBS Securities has built up a clientele base of more that 100,000 customers comprising a strong base of retail clients, high net-worth individual, local and international institutional clients.

Hwang-DBS claims to have over 580 dealers and remisiers.

When contacted, Hwang-DBS Securities executive director of operations Keong Si Hark declined to comment on the issue.