Corporatisation and Demutualisation of Stock Exchanges in India

A stock exchange is a form of exchange which provides services for stock brokers and traders to trade stocks, bonds, and other securities. Companies must have to list their share in these exchanges for the purpose of trading.

There are 19 recognised stock exchanges in India. In which , 16 stock exchanges were set up as companies either limited by shares or by guarantees whereas 3 stock exchanges were set up with the association of persons and later converted into companies.

Corporatisation of Stock Exchanges

The process to convert the organizational structure of the stock exchange from a non-corporate structure to a corporate structure is called as Corporatisation.

Some of the Indian Stock Exchanges such as Bombay Stock Exchange (BSE), Ahmadabad Stock Exchange (ASE) and Madhya Pradesh Stock Exchange (MPSE) were traditionally established as “Association of persons”, and later through the process of corporatisation, these stock exchanges were converted into incorporated Companies.

Demutualisation of Stock Exchanges

Demutualisation is the process of transformation of the legal structure of a stock exchange from a mutual form to a business corporation form and after demutualisation, 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.

Demutualised Stock Exchanges in India                   

Currently there are 18 demutualised stock exchanges present in India,

  • Bombay Stock Exchange (BSE),
  • National Stock Exchange (NSE),
  • Ahmedabad Stock Exchange,
  • Madhya Pradesh Stock Exchange,
  • Madras Stock Exchange,
  • Cochin Stock Exchange,
  • Bhubhaneshwar Stock Exchange,
  • Bangalore Stock Exchange,
  • OTCEI, Inter-connected Stock Exchange,
  •  Ludhiana Stock Exchange,
  • Guwahati Stock Exchange,
  • Vadodara Stock Exchange,
  • Delhi Stock Exchange,
  • Calcutta Stock Exchange,
  • Pune Stock Exchange,
  • Jaipur Stock Exchange
  • Uttar Pradesh Stock Exchange.