There are three key updates in Singapore that affect directors and officers of various organisations.
Increased penalties for breach of directors' duties
On 6 November 2025, the Singapore Parliament approved amendments to the Companies Act to strengthen corporate governance and accountability. Directors who fail to act in the best interests of their companies or exercise reasonable diligence will now face fines of up to SGD $20,000 (previously SGD $5,000) and a possible imprisonment of up to 12 months. Previously, the courts could not order both a custodial sentence and a fine, but the recent amendments allow the courts to do so. These changes align Singapore’s penalties with leading common law jurisdictions and aim to deter misconduct by directors.
While this does not impact insurers since D&O insurance will not cover such penalties, these amendments shows an increased scrutiny by regulators over directors due to recent wrongdoings by directors in Singapore. Such increased scrutiny may see an increase in the number of claims made against directors by aggrieved shareholders or investigations by regulators.
Singapore mandates cybersecurity training for board members of critical information infrastructure entities
Singapore is strengthening its cybersecurity framework for critical service operators with proposed revisions of the Cybersecurity Code of Practice for critical information instructure ("CCoP"). These reforms aim to address rising global cyber threats and ensure accountability at the highest levels of leadership.
Under the proposed amendments to the CCoP, board members of critical information infrastructure ("CII") entities, including sectors such as healthcare, finance, and energy, will be required to undergo mandatory cybersecurity training. This marks a shift toward personal accountability at the governance level, with directors of such entities expected to understand cyber threats and risk management principles more deeply. The proposed amendments also state that the Chief Information Security Officers of the entity should be provided direct access to the board.
While the full revisions to the CCoP have yet to be released, we expect to see more scrutiny over the upstream and downstream vendors, given the increasing reliance on various third party vendors by all organisations.
Given the likely increased regulatory supervision over directors in CII entities, such directors may want to reassess their coverage under their Directors and Officers Policy to ensure that there is suitable cover for any regulatory investigation. Insurers who insure such CII entities may also want to review both their Cyber and Directors and Officers Policy coverage and determine whether the risk profiles are affected due to this upcoming amendments to the CCoP.
Recent MAS consultation paper
The Monetary Authority Singapore ("MAS"), the regulator, is seeking to enhance investors' ability to seek civil compensation for losses suffered due to market misconduct from securities issuers. The MAS therefore issued a consultation paper in October with its proposal and has sought public feedback. The proposed measures follow the recommendations of the Equities Market Review Group that seek to establish an effective investor recourse regime to give investors greater confidence to participate in the securities market.
Current situation
Feedback has indicated that retail investors find it challenging to prepare a case and often lack sufficient resources to then bring a claim against errant issuers of securities. While the MAS is keen to improve options for investors, it is also focused on ensuring that there are sufficient guardrails against frivolous legal actions.
Pursuant to the Securities and Futures Act 2001 ("SFA"), investors currently have two options: (1) an independent action in court for compensation or (2) a piggyback action where the investors may apply to court for compensation once the offender is convicted or a civil order is handed down.
The current "class action" regime in Singapore, i.e. a representative action, requires numerous persons to have a common interest. The bar to show a common interest is high and it may be difficult for each investor to provide such an interest. Further, one or more investors must volunteer to act as the lead claimant and there may not be investors who are willing to step forward or are trusted by all the claimants for the role.
Proposed plan
There are three broad aspects to the MAS' new proposals.
Facilitating self-organisation
The MAS proposes introducing an option for an independent party to be appointed as a designated representative and bring legal action on behalf of the investors. This would not replace the existing current representative action avenue, but complement it. Such an independent party will have to be approved as a designated representative and imbued with the legal standing to bring the action. The MAS has yet to establish the mechanism to do so, but is contemplating whether the courts should be involved to assist.
Providing access to funding
One of the key barriers to investor recourse is the high costs of bringing and sustaining a legal action. Market misconduct cases usually involve high costs for experts, discovery, financial analysis and legal advice. Such costs can be prohibitive, especially for retail investors. The MAS has proposed establishing a grant scheme to "co-fund" meritorious investor actions. However, the MAS is also keen to ensure that Singapore does not become too litigious and therefore, there is likely to be a strict set of conditions to access such a grant scheme.
Reducing legal barriers to civil action
Currently, a piggyback action will not be allowed where the MAS enters into a civil penalty settlement or if there is a default judgment or consent order made against the wrongdoer. The MAS proposes to remove such a barrier and allow such an action based on civil penalty settlements, default judgments and consent orders. The MAS also seeks to simplify the process by providing template forms and affidavits for investors to use. Most importantly, the current legislation limits the compensation that an investor may receive to the amount of profit gained or loss avoided by the wrongdoer. The MAS proposes to remove the statutory cap on compensation for all market misconduct offences and allow the courts the flexibility to determine the appropriate compensation in each case.
How does this impact insurers?
Insurers that write the risks will now have to consider the increased exposure to Insureds from claimants now having more simplified opportunities to seek financial and other punitive recourse. Insurers can take some comfort that the MAS has not gone so far as to propose US style class actions, and which would likely require a significant overhaul of the Rules of Court.
Insurers should carefully watch what the MAS eventually decides is the appropriate enhancement of the present regime. Facilitating investor claims will likely lead to larger and more frequent actions for market misconduct. The litigation risks, that have been previously considered to be restrained and infrequent in the Singapore market, might transform should the MAS adopt the proposed recommendations.
