Independent Research Network (IRN), a joint venture established by Reuters and Nasdaq to provide independent analysis on under-covered US listed companies is being shut down due to poor take-up of the service from investors.
IRN was set up in June 2005 to procure and distribute "independent" equity research on behalf of under-covered small and mid-cap companies. At the time Reuters argued that 35% of all public companies had no analyst coverage at all and IRN was expected to plug this "information gap".
But according to a Reuters report the unit is being shut down due to weak demand from investors. Nasdaq spokeswoman Bethany Sherman told Reuters reporters that IRN will be discontinued because "the adoption rate was slower than anticipated".
Sherman says IRN will be shut down over the next several weeks.
Smaller companies have found it increasingly difficult to get research coverage since 2002's 'Global Analyst Research Settlements', when the US Securities and Exchange Commission (SEC) cracked down on Wall Street banks for using investment banking fees to compensate analysts.
IRN was one of a nnumber of firms that were set up to provide research following the settlement.