FOR much of this year, it has been fashionable to heap blame on Singapore Exchange (SGX) for the local stock market's twin woes of poor liquidity and low volatility. Granted, markets all over the world have experienced a drop in equity trading volume because central banks have reduced their monetary stimulus, but it is claimed that the problem here is aggravated by a loss of confidence originating from the penny stock crash of a year ago which has driven a sizeable portion of the retail public away from stocks and many big speculators to ply their trade in other markets.

This is the conventional wisdom as it stands today and its adherents believe it to be an accurate portrayal of existing conditions; for example, one commonly heard criticism is that SGX's new rules which emerged from the penny crash wreckage are an over-reaction and the market is now dulled by too many regulations from an exchange that is out of touch with the ground.

Maybe so and we could debate endlessly the merits of those new regulations and the notion that the exchange could knowingly undertake actions that would damage its own rice bowl.