Can the people who regulate a company also produce research useful to an investor considering buying its stock? Singapore Exchange Ltd. says the answer is yes.

It’s expanded an in-house team dedicated to producing reports on firms listed on its venues, Chan Kum Kong, head of research and products, said in an interview. On top of two existing writers, nine members have been added to the team that was set up in 2016. The research group covers about 200 small and mid-cap stocks. While other exchanges pay to ensure there’s research on their public companies, its unusual to have staff assigned to write reports.

Spending in the $5 billion investment research industry is estimated to fall by as much as 30 percent as a result of new European rules, according to management consultancy Oliver Wyman. Reduced coverage may mean less volume, a Bloomberg Intelligence analysis said, a concern for SGX which makes money from trading fees. The company says the research push doesn’t clash with its role as market regulator.

“You know you’ve got to do something when the industry starts to gap up over there,” said Chan, referring to the decreasing coverage.

SGX, a for-profit public business that both oversees and sells offerings to its listed companies, has “several measures in place” to prevent conflict between its commercial objectives and its regulatory responsibilities, a spokeswoman said. This includes having its supervision functions in an independent subsidiary that started in September, she said. The regulatory unit was formed after calls to separate the exchange’s supervision and commercial roles.

MiFID II Effect

The EU’s MiFID II rules force fund managers to pay for investment research separately, a break from the industry practice of bundling services in return for trading commissions. That’s led to many brokerages cutting their analyst ranks and reducing how many companies they cover.

“Competition in the investment research market is on the rise as a result of MiFID II,” said Sarah Jane Mahmud, a senior policy analyst at Bloomberg Intelligence. “Exchanges are starting to allocate bigger budgets to research provision as they compete with each other to become an attractive listing venue.”

ASX Ltd., which runs Australia’s largest stock market, funds a program for outside analysts to research under-covered stocks on its venue. The National Stock Exchange of India Ltd. has a similar initiative.

The SGX team does not make buy or sell recommendations. Their notes focus on providing analysis of historical price performance and industry news. The increase in research has helped raise the number of stocks with a daily traded value of more than $1 million by at least 20 percent, according to the exchange operator.

“People ask why is an exchange doing research, is it eating my lunch?” Chan said. “We’re very cognizant that we should complement the industry.”