Question

___________ means the segregation of ownership and management from the trading rights of the members of a recognised stock exchange in accordance with a scheme approved by the Securities and Exchange Board of India.

• A. Demutualisation
• B. Corporatisation
• C. Dematerialization
• D. Recomposition

Hint:

"De-mutualisation" is the process of breaking up a "mutual" ownership structure of a stock exchange and turning it into a regular company.

Answer 1

The Correct Option is A

The correct term is Demutualisation.

Before Demutualisation: Stock exchanges were often "mutual" organizations, where the members (brokers who trade on the exchange) were also the owners and managers.

After Demutualisation: The exchange is converted into a for-profit company.
The ownership (shares) and management are separated from the trading rights of the members.
The exchange is now owned by shareholders (who may or may not be brokers) and managed by a professional board, while members retain their rights to trade.
This process is done to improve governance, transparency, and efficiency.