Chapter 47: The Securities and Exchange Board of India | 609 |
At present stock exchanges in India are “mutual” and non-profi t
organizations enjoying tax exemption. The trading members are
stockbrokers who also own, control and manage such exchanges for their
mutual benefi t. The ownership rights and trading rights are combined
together in a membership card, which is not freely transferable.
On the other hand, a “demutual” exchange is one in which
three distinct sets of people own the exchange, manage it and use
its services. The three stakeholders are shareholders, brokers and
investing public. The management is vested in a board of directors,
assisted by a professional team. A demutualized exchange is generally
a for-profi t organization ...