SINGAPORE: To continue being the educator and voice of minority investors here, the Securities Investors Association (Singapore), or SIAS, will need to keep pace with technological developments affecting the investment landscape, while addressing its own challenges in funding and succession.
This is according to SIAS' chief patron, former President Tony Tan Keng Yam, who was speaking at the association's 20th anniversary event on Wednesday (Jun 19).
AdvertisementAdvertisementIn his opening address, Dr Tan noted that technological advances are transforming the investment landscape. The advent of artificial intelligence and robo-advisers, for instance, have implications on investment advice and how financial planning will be conducted.
New capital structures are also creating governance issues for regulators, and will pose challenges for companies and organisations like SIAS.
“As the market evolves, so must SIAS,” said Dr Tan.
SIAS was born in 1999 out of a cross-border debacle known as the Clob saga. Then, about 172,000 retail investors in Singapore were left in limbo after Malaysia abruptly banned the trading of Malaysian shares on Clob International – an over-the-counter trading platform created in 1990 – and imposed capital controls shortly.
AdvertisementAdvertisementLed by lawyer David Gerald, a group of investors banded together to advocate for their frozen investments, amounting to about US$5 billion, to be released.
Since then, Mr Gerald has been the face and chief steward of SIAS, which now focuses on the three broad areas of investor education, championing investors’ rights and corporate governance.
Moving forward, the local investor advocacy group will have to address the issue of succession, said Dr Tan.
It will also have to work out a sustainable funding model given how finance has been a “constant struggle” over the past two decades, he added.
Operating as a charity, SIAS largely raises funds through its annual programmes, such as the Investors’ Choice Awards, and from corporates. The latter, however, has drawn some criticisms about its credibility.
On that, Dr Tan said: “It is crucial that a sustainable funding model is found. Doing so would address sceptics who claim that the present arrangement does not allow SIAS to be properly objective.”
When asked by CNA about these challenges, Mr Gerald said SIAS is in talks with agencies, such as the Monetary Authority of Singapore and the Singapore Exchange, on the possibility of grants.
“We have been talking,” he said. “I think people are beginning to realise the importance of SIAS and the need for it to continue - the question is how?”
On the topic of succession, Mr Gerald said he will likely hold on to the top job for another two to three years, but he has identified “three to four eligible candidates” as possible successors.
“This will be a full-time job. I need leaders who must be prepared to continue for the next 10 years.”
“IN THE BOARD ROOM” APPROACH
Dr Tan, in his speech, also touched on SIAS’ conciliatory approach – “in the board room, and not the courtroom” – when it comes to resolving investors’ rights issues.
“This approach is founded on the belief that dispute resolution is best pursued through collaboration and discussion, rather than through confrontation and aggression.”
Citing how SIAS has helped many shareholders and more recently broadened its assistance to bondholders of troubled oil and gas firms, Dr Tan said the approach “has proven very effective”.
“All this was accomplished despite the considerable constraints under which SIAS operates – the two biggest being funding limitations and scepticism from some quarters over whether SIAS, by its ‘in the boardroom, not the courtroom’ approach, can be a truly effective small investor champion.”
Mr Gerald reiterated that SIAS has developed “a new model of responsible shareholder activism”.
“Nobody gave us a chance (in 1999). In fact my own brother said I was mad but we succeeded,” he said.
“There wasn’t a voice representing the small man then. We plugged the gap and persisted not just because of support from the ground, but support from corporates, regulators, and the boards and senior management."
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