Question:
___________ means the segregation of ownership and management from the trading rights of the members of a recognised stock exchange in accordance with a scheme approved by the Securities and Exchange Board of India.
___________ means the segregation of ownership and management from the trading rights of the members of a recognised stock exchange in accordance with a scheme approved by the Securities and Exchange Board of India.
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"De-mutualisation" is the process of breaking up a "mutual" ownership structure of a stock exchange and turning it into a regular company.
Updated On: Jun 13, 2025
- Demutualisation
- Corporatisation
- Dematerialization
- Recomposition
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The Correct Option is A
Solution and Explanation
The correct term is Demutualisation.
Before Demutualisation: Stock exchanges were often "mutual" organizations, where the members (brokers who trade on the exchange) were also the owners and managers.
After Demutualisation: The exchange is converted into a for-profit company.
The ownership (shares) and management are separated from the trading rights of the members.
The exchange is now owned by shareholders (who may or may not be brokers) and managed by a professional board, while members retain their rights to trade.
This process is done to improve governance, transparency, and efficiency.
Before Demutualisation: Stock exchanges were often "mutual" organizations, where the members (brokers who trade on the exchange) were also the owners and managers.
After Demutualisation: The exchange is converted into a for-profit company.
The ownership (shares) and management are separated from the trading rights of the members.
The exchange is now owned by shareholders (who may or may not be brokers) and managed by a professional board, while members retain their rights to trade.
This process is done to improve governance, transparency, and efficiency.
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