THE goal of any regulatory regime, whether merit- or disclosure-based, is to ensure a level playing field for all its market players, big or small. All rules are therefore formulated with this central objective in mind, and investor confidence rests on it being achieved.

The bottom line is that if the playing field is to be levelled, greater disclosure and investor choice are needed.

As far as the local market is concerned, although progress has undoubtedly been made over the past decade in levelling the playing field, there are still many areas that could be improved. Here are some:

• Daily disclosure of warrant issuers' market-making activities and open interest: Warrant issuers buy and sell their instruments throughout the day as part of their market-making role. Although this ensures sufficient liquidity for quick entry and exit by traders, it has led to some investors to believe issuers manipulate prices to the detriment of the public.

  These suspicions can be alleviated by proper disclosure. For one, providing details of a market-maker's daily trades is useful to the investing public because it gives the proportion of daily volume that was generated by market-making activity and the proportion that came from other sources.

  For instance, if market-making volume is insignificant relative to total volume, this means that there are many other players riding on that warrant. This in turn would suggest that the warrant's price may not necessarily follow the issuer's pricing model and, as such, could be subject to wide fluctuations.

  In Hong Kong, issuers have to submit a daily report to the exchange, giving details of amounts bought and sold, the prices at which these trades were done, the issue size, and the percentage in public hands. These reports are then posted on the exchange's website every day. Currently, warrant issuers in Singapore submit a similar report to the Singapore Exchange (SGX) but this is done weekly and there is no subsequent posting on SGX's website. This should be remedied - either SGX should collate the information and put it on its own site, or issuers should take the initiative and post the data daily on their own sites.

• Daily disclosure of short-selling positions: Although short-selling - the selling of something not originally owned with a view to buying it back later if and when the price falls - is generally frowned upon, everyone connected to the stock market recognises it as being a legitimate trading activity that has its own place in today's market.

  As a result, several houses - SGX included - now run lucrative scrip lending and borrowing businesses to facilitate short-selling. Short-selling information is useful because it gives observers an idea of which stocks might come under pressure or which stocks the market views bearishly. Whatever the case, scrip lenders and borrowers should be made to submit daily reports to SGX giving details of the amounts and names of the stocks concerned and the exchange should then release this information. In Hong Kong, this is done twice a day.

• Revive the cash market: This is a segment of the stock market which used to exist (and which was inexplicably scrapped) where investors can obtain scrip for immediate delivery in return for payment upfront. The benefits of having such a segment are many - for example, it helps shareholders in urgent need of cash to raise money quickly instead of having to endure the current week-long delay.

  Moreover, investors who may have inadvertently short-sold shares can quickly cover their positions by buying in the cash market without having to face the exchange's punitive buying-in process.

  Whatever the purposes for tapping into it, having a parallel market where buyers and sellers can transact on quicker terms than the ready market's (T+3) settlement system gives investors greater choice and is a useful feature that enhances the attractiveness of the local market.

• Increase transparency surrounding placements: This is a controversial area because there is a school of thought which says companies should be free to place out shares to whoever they wish to and, as such, they should not be regulated.

  The counter-argument is that often, placements are at large discounts and are given to cronies, persons acting in concert, insider-related parties and, possibly, broking house directors who keep the shares for themselves.

  The best middle ground between these two opposing viewpoints is for companies to disclose who the placement shares were given to once the exercise is completed. If this is left to a broking house, disclosure should still be made of the quantities given to individual parties and the relationship to the companies concerned, if any.

The bottom line is that if the playing field is to be levelled, greater disclosure and investor choice are needed. This is the thinking behind the suggestions above and those which will follow in future columns.