AS A commercially motivated frontline regulator, the Singapore Exchange (SGX) regularly finds itself in situations where its priorities are in direct conflict and where solutions are not straightforward. One particularly contentious area is research coverage of smaller companies, which is essential to help these firms gain investment attention but has been declining sharply in recent years as cost-conscious brokers have progressively focused their energies on the bigger firms.

Given that SGX derives revenue from trading and clearing fees, it is therefore in its interest that as many of its listed companies as possible are covered by investment houses since greater awareness should in theory lead to greater trading activity.

So it was that between 2003 and 2013, SGX co-paid for regular reports on smaller companies that the broking industry did not track, with the balance of the costs borne by the firms that signed up for coverage. After a promising start however, interest died out mainly because costs started to rise, and participating firms became reluctant to pay increasingly more money for reports that might have called a "sell'' on their shares or painted them in an unflattering light. Perhaps understandably, companies then started to exit the scheme, and this then led to simple fact sheets being produced with no investment recommendation. The problem was that investors eventually found these to be of limited value because much of the information was by that time already available on company websites and the Internet.