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The elephant in the room that won't go away

I just realized that the headline "The elephant in the room'' may not be entirely appropriate because "elephant'' refers to a subject which is glaringly obvious but seems to escape attention because nobody wants to acknowledge its presence.

In this case, the elephant is whether or not the frontline stock market regulator, a role filled locally by the Singapore Exchange (SGX), should also be a commercial, for-profit entity.

It's not strictly the metaphorical "elephant'' which everyone chooses to ignore even though it has been ignored by the parties that matter, namely officialdom.

It's not an elephant per se because other commentators have raised the issue many times before - my colleague Michelle Quah in a recent Hock Lock Siew column for example, talked about the need for a separate, unlisted regulator, whilst corporate governance expert Prof Mak Yuen Teen has also brought it up a few times in the past.

So it's an elephant that gets revived every so often but then because officialdom looks the other way - or chooses not to see it - it then gets buried, only to be dragged out into the open for display, then gets ignored and buried, only for the process to be repeated again and again.

Semantics aside though, it's hard to understand why the persistence with a regulatory model that opens up regulators to frequent criticism.It's a model that places the exchange in a no-win situation - if things go right, they are simply doing what's expected of them; if things go wrong, then it's because they are a conflicted regulator and could be cutting corners for commercial reasons.

I personally think the exchange's regulators are an earnest bunch who do try their best to do a decent job but find themselves having to (unfairly) grapple with the constraints of the model that they are subject to. Handing over regulatory and disciplinary powers to a non-profit body may not guarantee a tighter ship, but it would at least put a stop to the never-ending brandishing of an elephant that simply won't go away.

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