MAS Proposes New Measures to Strengthen Investor Protection and Facilitate Civil Compensation

Hadisur Rahman, JadeTimes Staff

H. Rahman is a Jadetimes news reporter covering Business

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The Monetary Authority of Singapore (MAS) has unveiled a set of proposals aimed at strengthening investor protection and improving access to civil compensation for losses arising from market misconduct.

In a consultation paper released on Friday, MAS outlined plans to make it easier for investors to pursue compensation by facilitating collective action, improving funding access, and easing legal barriers. The move forms part of broader efforts to enhance investor confidence and boost the local equity market.

MAS noted that retail investors often face significant challenges in initiating legal proceedings, including difficulties in self-organising, securing funds for legal advice, and finding a representative to lead the case. At the same time, the authority stressed the need to prevent frivolous lawsuits that could burden the financial system.

Under the current Securities and Futures Act, investors can seek compensation through independent legal action or a “piggyback” claim after a conviction or civil penalty order. However, MAS acknowledged that procedural and financial constraints often deter affected individuals from taking action.

To address these issues, MAS proposed allowing a designated independent representative to coordinate and file claims on behalf of investors. This representative would be required to meet strict criteria, including the absence of conflicts of interest or direct financial gain from the case.

In addition, MAS plans to introduce a grant scheme to co-fund legitimate investor actions and reduce the cost burden on claimants. Legal reforms under consideration include simplifying piggyback claims, easing the burden of proof in misstatement cases, and removing statutory caps on compensation amounts.

The proposed framework also seeks to expand the scope of piggyback claims to cover default judgments, consent orders, and civil penalty settlements. MAS said these enhancements will strengthen investor recourse mechanisms and complement public enforcement actions, reinforcing Singapore’s reputation as a trusted financial hub.