The Monetary Authority of Singapore has published a
consultation paper on proposals aimed at improving retail investors’ ability to
seek civil compensation for losses caused by market misconduct.
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The Equities Market Review Group introduced measures to
increase investor participation and improve listing quality. MAS says stronger
recourse options may support investor confidence.
Retail Investor Challenges Drive MAS Proposals
Feedback received by MAS indicates that retail investors
face challenges in pursuing civil action. These include difficulties in
self-organisation and securing funds for legal advice.
MAS also notes the need
to prevent frivolous claims that could burden the market. The proposals aim to
balance accessibility with safeguards against misuse.
New Proposals Aim to Ease Collective Action and Funding
Barriers
The consultation paper outlines three main proposals. MAS
seeks to make self-organisation easier. Retail investors can bring collective
action but may struggle to coordinate or find a lead party. MAS proposes
allowing an independent representative to manage and bring claims, subject to
criteria preventing conflicts of interest or misuse.
MAS also aims to improve access to funding. Legal action can
be expensive, requiring specialised expertise and analysis. The proposed grant
scheme would co-fund legitimate claims and some representative costs, with
safeguards to limit opportunistic litigation.
MAS plans to reduce legal barriers. Existing “piggyback
claims” allow investors to rely on certain enforcement outcomes. MAS proposes
simplifying procedures, expanding eligible cases, easing proof of reliance, and
removing compensation caps.
MAS and Police Target Repeat Offenders with Facility
Restrictions
Singapore authorities are introducing measures to restrict
access to banking services and phone lines for “scam
mules” as part of an effort to disrupt criminal networks. These networks
contributed to nearly $460 million in losses during the first half of 2025.
The Singapore Police Force, MAS, Infocomm Media Development
Authority, and Government Technology Agency said the facility restriction
framework will begin in October. It targets individuals who sell bank accounts
or mobile lines to overseas syndicates, including repeat offenders who continue
applying for new facilities.
Restrictions will cover digital banking, ATM access, and
PayNow, with durations based on individual risk. Authorities will also
implement enhanced penalties, including imprisonment and fines. Despite a
slight decline in scam losses, officials say the threat remains significant.
This article was written by Tareq Sikder at www.financemagnates.com.
