CHYE 

Shu Yi

Chye Shu Yi graduated from the Double Degree Programme at the National University of Singapore (Class of 2014) with double honours in Law and Business. Her specialization in Finance led to her research interest in the balance between financial regulation and free market innovation, and how corporate law can benefit from and contribute to finance and its behavioural aspects. Shu Yi’s research experience includes her having worked as an Undergraduate Student Researcher for several professors in both the NUS Faculty of Law as well as the NUS Business School.

Alpha Protection for Beta Consumers
At present, the law regarding investor protection in Singapore is founded upon, inter alia, a belief in consumer rationality and reasonableness. However, recent developments in the field of behavioural finance recognize that humans can never be completely rational. These developments challenge a fundamental premise in the regulatory philosophy. This paper therefore breaks new ground by applying the insights of behavioural finance to the law in Singapore.
This paper introduces behavioural finance and uses it to outline a legal framework for policymakers’ assessment of future recommendations for banking and finance in Singapore. It then shows how behavioural finance insights on (ir)rationality in decision-making can be applied to shape existing regulations and create new ones. This has strong implications for policymaking, in light of the current trend towards preserving individual freedom of choice, and the necessity to strike an appropriate balance between protection and overprotection.