Demutualisation/Corporatisation of Stock Exchange

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"Anant" (Querist)
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21 November 2009 Sir/Madam - Please tell me exactly what is the meaning of demutualisation or corporatisation of recognised stock exchanges and whats the position of capital gains on the same??

Abuzar Azmi

Abuzar Azmi (Expert)
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21 November 2009 Meaning
Demutualisation refers to the legal structure of an exchange whereby the ownership, the management and the trading rights at the exchange are segregated from one another.

Simple Term is that If u have a partnership firm and now u are converting it into company ,where it has it,s own identity separate to its management.

If you aquire any Share due to demutualisation of any stock exchange that would be an exempt transfer. But if you subsequently sale those shares then in that case capital gain would attract normally.

"Anant"

"Anant" (Querist)
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21 November 2009 Does that mean sir, changing the legal make up of the stock exchanges, thereby making it a co., and the shares being allotted to their members.

Abuzar Azmi

Abuzar Azmi (Expert)
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21 November 2009 Yes Exactly

"Anant"

"Anant" (Querist)
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21 November 2009 Thanks Sir.

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