Singaporean Authority Proposes Legal Resources For Investors To Pursue Claims
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The Monetary Authority of Singapore (MAS) has outlined how it aims to improve retail investors’ ability to seek civil compensation for losses incurred due to market misconduct. The recommendation was made in a recently published consultation paper.
MAS said the introduction of measures to improve listing quality and investor participation is long overdue. The regulator noted that stronger remedies may support investor confidence.
Following the feedback MAS has received from investors, there is a need to offer grants and legal support to investors who face challenges pursuing legal action. Some of the difficulties include securing funds for legal advice and self-organization.
New Proposal Will Ease Funding Barriers and Support Collective Action
MAS will also endorse a proposal to prevent fake claims that could place an additional burden to the market. The proposal, according to the regulator, will ensure access to legal resources, but safeguards will prevent misuse.
In the paper, the MAS outlined three major proposals, all aimed at easing investors’ burden when seeking advice and looking to protect their business. MAS says it will make self-organization easier. Also, the proposal will enable an independent representative to bring claims. However, it will be subject to certain criteria to prevent misuse or conflict of interest.
MAS has also proposed improving access to funding. The regulator noted that legal action can be expensive for investors who may feel discouraged due to the fees. The proposed grant scheme promises to co-found legitimate claims, which would also include some representative costs. However, there will be safeguards in place to prevent sponsoring opportunistic litigation.
Regulators Seek To Limit Phone And Bank Access For Repeat Offenders
The regulator says the proposed scheme will encourage more investors to seek legitimate recourse for losses incurred from market misconduct.
The lack of a legal framework to enable investors to seek compensation for such losses has led to a loss of market confidence. With this scheme, investors will understand that they could recover their funds if a company deliberately causes such a loss.
MAS is proposing removing compensation caps, easing proof of reliance, expanding eligible cases, and simplifying processes to claims. The watchdog believes these steps will boost investor confidence, reduce risks, and ensure an overall healthy market.
On a similar note, Singapore authorities want to restrict access to phone lines and banking access for repeat offenders. The move is part of measures to disrupt criminal networks by preventing them from accessing the means to perpetrate their crimes.
The move follows an increase in financial crime in the country. A recent report revealed that these “scam mules” contributed to about $460 million in losses during the first half of the year. The restrictions will also cover PayNow, ATM Access, and digital banking.
