What do you understand by Demutualization?:
Demutualization is when a mutual company owned by its members converts into a company owned by shareholders.
Demutualization is a complex process that involves transitioning a company’s financial structuring from a mutual company structure to a shareholder supported structure.
Demutualization is the process of transformation of the legal structure of a stock exchange from a mutual form to a business corporation form and after demutualization, the ownership, the management and the trading rights at the exchange are isolated from one another. As, in the mutual form of exchange, ownership, management and trading are involved into a single Group. Here, broker members of the stock exchange are owners, traders and also manage the stock exchange.
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