What is meant by demutualisation of stock exchange? Explain the purpose of demutualisation.

Meaning of Demutualisation: Demutualisation means converting a mutual non-profit body into a corporate body where management and trading activities are separated. Purpose of Demutualisation: Stock exchanges owned by members tend to work towards the interest of members alone, which could on occasion be detrimental to rights of other stakeholders. Division of ownership between members and outsiders can lead to a balanced approach, remove conflicts of interest, and create greater management accountability. Publicly owned stock exchanges can enter into capital market for expansion of business. Publicly owned stock exchange would be more professionally managed than broker owned. Demutualisation enhances the flexibility of management.