WHAT IS DEMUTUALISATION AND WHY IS IT NECESSARY?

DEMUTUALISATION: Earlier on the intermediaries, i.e., brokers used to own, control and manage the stock exchanges. This ownership and management of stock market by brokers often led to conflict of interests between brokers and their clients. To solve this problem government did demutualisation of stock market .

Demutualisation refers to separation of ownership and control of stock market from the trading rights of members.

Through demutualisation there's

reduction of chances of brokers using stock market for private gains.

When demutualisation is performed, the company will either become a 'no-shareholding' company—with no shares of stock in its ownership—or it will be reclassified under a different legal structure.
Demutualisation can result in significant tax savings for public companies, as well as senior management and employees of the firm. Corporate governance comes into play during different levels of demutualisation, such as when firms are converted to ‘no-shareholding’ or when they are reclassified into other legal structures.

WHAT IS DEMATERIALISATION ??