On 24 October 2025, the Monetary Authority of Singapore (MAS) issued a public consultation paper proposing a framework to strengthen investors’ ability to seek civil compensation for losses arising from market misconduct. The initiative follows recommendations by the Equities Market Review Group to boost investor protection, encourage participation in Singapore’s equities markets, and sustain confidence through better recourse mechanisms. MAS’s consultation seeks to address structural and financial barriers faced by retail investors pursuing legitimate claims, while implementing safeguards against frivolous or opportunistic litigation.
The consultation reflects MAS’s recognition that a fair and accessible investor redress system is essential to a well-functioning capital market. MAS notes that retail investors often face challenges in initiating civil proceedings due to collective coordination difficulties and the high costs of litigation. The proposed framework introduces mechanisms to improve self-organisation, funding access, and procedural simplicity. Together, these measures aim to make civil compensation a realistic avenue for investors affected by market misconduct such as misstatements, insider trading, or manipulation.
Regulatory Interpretation
The proposals is a structural expansion of Singapore’s investor protection architecture, complementing MAS’s public enforcement powers under the Securities and Futures Act 2001 (SFA). While the SFA provides for civil penalties and criminal prosecution of market misconduct, individual investors have limited private recourse. MAS now seeks to bridge this enforcement gap by making compensation claims more accessible through collective representation, funding assistance, and procedural simplification. The initiative also balances investor empowerment with judicial efficiency by embedding safeguards against speculative or non-meritorious actions.
Three Core Proposals and Compliance Interpretation
- Facilitating self-organisation: Under existing law, affected investors can bring collective action but face challenges coordinating representation. MAS proposes the introduction of a Designated Representative Mechanism — an independent entity authorised to organise and represent investors in civil proceedings. To prevent misuse, the designated representative must have no financial interest or conflict of interest and must meet prescribed eligibility standards. This mechanism enhances procedural efficiency, lowers transaction costs, and promotes fair representation while maintaining judicial oversight.
- Providing access to funding: Recognising that cost is a key deterrent, MAS proposes a grant scheme to co-fund credible investor actions. The scheme would partially defray the expenses of complex litigation, including expert testimony and financial analysis. To ensure prudence, the scheme will include co-payment requirements, eligibility filters, and governance controls. The aim is to facilitate legitimate claims while discouraging opportunistic suits that could strain market integrity.
- Reducing legal barriers to civil action: MAS seeks to refine the “piggyback claim” provisions under the SFA, which currently allow investors to claim compensation following a criminal conviction or civil penalty order. The proposed refinements would:
- Extend the basis for claims to include default judgments, consent orders, and civil penalty settlements involving admission of liability.
- Simplify procedural requirements so investors can pursue claims without excessive legal complexity.
- Ease the burden of proof of reliance in cases of misleading statements or omissions.
- Remove statutory caps on compensation to allow courts full discretion in assessing damages based on case-specific evidence.
Background
- February 2025: Equities Market Review Group announced first package of measures to strengthen Singapore’s equities market.
- July 2025: MAS unveiled additional measures and signalled intention to enhance investor recourse.
- October 2025: MAS issued public consultation on investor compensation framework, with feedback due by 31 December 2025.
