Some share market players are alleging that the entry of new stock brokers has put price pressure on labour resources of the existing brokers. “There will be 7 new firms (to the existing 21) and they’re unlikely to recruit freshers and train them from the ground up. The new brokers will recruit from the existing companies which will weaken these company operations,” Mano Nanayakkara, CEO Asia Capital Securities (ACap) told the Business Times.
He said that one analyst and a key accountant from ACap have been recruited by a new entrant. “We are aware that many of our employees were approached by the new entrants. Naturally the individuals (staff) will take this as an opportunity to improve their positions, but the net result is that the existing firms will be weakened by the exodus of staff or weakened by the enhanced cost,” he said. He added that this situation should’ve been anticipated by the regulator and ideally the new entrants should’ve been examined by the Securities and Exchange Commission (SEC) with regard to their training and staff plans.
But others say this isn’t rocket science. “Each one offers more to those whom they want to recruit. They poach talent from each other and the incumbents are not too thrilled,” an analyst said.
A CEO of a new brokerage house noted that if SEC allows them to recruit personnel, then train them and get them to sit the investment advisors exam, these issues won’t arise. “The SEC specifies 6-month experience of staff, which forces us to recruit from existing companies,” the CEO said.
Malik Coder, Deputy Director General SEC refutes these allegations saying that more than 30 trained individuals were put into the industry by SEC’s training arm, the Financial Service Academy during the last 3-months. “In any job there’s an internship period, which is also true with this profession; there’s 6-month time to get the flavour of the industry,” he added.
Mackwoods Group’s Calridge Ltd, LOLC group, India Infolines, Richard Peiris, TKS Holdings, Takashi Igarashi Safe and Ascot Holdings were successful in the CSE’s selection process for a share broking licence. The successful candidates will have to incorporate the stockbroking firms and then apply for the CSE membership, after which the SEC will grant them the licence.