Shareholder bodies like SIAS needed in developed capital markets

EVER since the Securities Investors Association (Singapore), or SIAS, was formed to aid retail investors cope with the withdrawal of Malaysian shares traded locally on Clob International back in 1998, it has struggled to fully convince a sceptical public about its credentials as an independent, objective champion for shareholder rights.

This is due to the assumption that a shareholder activist organisation whose role is primarily to defend and advance the rights of retail investors vis-a-vis corporations yet derives funding from those very corporations must be inherently conflicted, just like the Singapore Exchange, which earns listing fees from the companies it regulates.

Flawed though the funding model may appear, critics should nevertheless acknowledge that SIAS has evolved over the years, from its involvement in the Clob affair when it was mainly a facilitator for the migration of shares held by Singapore investors back to Malaysia, to a constructive player in the local financial market which pursues three missions - investor education, the protection and championing of the rights of investors and the improvement of corporate governance.