Demutualization of Stock Exchanges
DEMUTUALIZATION OF STOCK EXCHANGES
PROBLEMS, SOLUTIONS AND CASE STUDIES
Edited by
SHAMSHAD AKHTAR
Director, Governance, Finance and Trade Division, East and Central Asia Department, Asian Development Bank
© Asian Development Bank 2002 All rights reserved.
The views expressed in this book are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank, or its Board of Governors or the governments they represent. The Asian Development Bank does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequences for their use. Use of the term “country” does not imply any judgment by the authors or the Asian Development Bank as to the legal or other status of any territorial entity.
ISBN 971-561-475-2 Publication Stock No. 100602 Published and printed by the Asian Development Bank P Box 789, 0980 Manila, Philippines .O.
CONTENTS
Foreword Principal Authors Abbreviations
xiii xv xxi
PART I : ISSUES INVOLVED IN STOCK EXCHANGE DEMUTUALIZATION
1 Demutualization of Asian Stock Exchanges— Critical Issues and Challenges by Shamshad Akhtar 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 Introduction Demutualization: Its Definition, Size and Significance Motivation and Driving Factors for Demutualization From Mutuality to Demutualization of Exchange Benefits of Demutualization of Exchanges Regulatory Oversight: Challenges and Responses for Demutualized Exchange Financial Viability of Demutualized Exchange Conclusion 3 3 4 5 8 12 19 25 29
2
2.1 2.2 2.3 2.4 2.5 2.6
Background Information on Demutualization by Pamela S. Hughes Introduction What Demutualization Means The Reasons to Demutualize The Models An Update Since Demutualization Conclusion 33 33 33 36 40 43 47
Demutualization of Stock Exchanges—Problems, Solutions and Case Studies
APPENDIX
1 : The Models
48
3
Motivations, Mechanics and Models for Exchange Demutualizations in the United
PROBLEMS, SOLUTIONS AND CASE STUDIES
Edited by
SHAMSHAD AKHTAR
Director, Governance, Finance and Trade Division, East and Central Asia Department, Asian Development Bank
© Asian Development Bank 2002 All rights reserved.
The views expressed in this book are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank, or its Board of Governors or the governments they represent. The Asian Development Bank does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequences for their use. Use of the term “country” does not imply any judgment by the authors or the Asian Development Bank as to the legal or other status of any territorial entity.
ISBN 971-561-475-2 Publication Stock No. 100602 Published and printed by the Asian Development Bank P Box 789, 0980 Manila, Philippines .O.
CONTENTS
Foreword Principal Authors Abbreviations
xiii xv xxi
PART I : ISSUES INVOLVED IN STOCK EXCHANGE DEMUTUALIZATION
1 Demutualization of Asian Stock Exchanges— Critical Issues and Challenges by Shamshad Akhtar 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 Introduction Demutualization: Its Definition, Size and Significance Motivation and Driving Factors for Demutualization From Mutuality to Demutualization of Exchange Benefits of Demutualization of Exchanges Regulatory Oversight: Challenges and Responses for Demutualized Exchange Financial Viability of Demutualized Exchange Conclusion 3 3 4 5 8 12 19 25 29
2
2.1 2.2 2.3 2.4 2.5 2.6
Background Information on Demutualization by Pamela S. Hughes Introduction What Demutualization Means The Reasons to Demutualize The Models An Update Since Demutualization Conclusion 33 33 33 36 40 43 47
Demutualization of Stock Exchanges—Problems, Solutions and Case Studies
APPENDIX
1 : The Models
48
3
Motivations, Mechanics and Models for Exchange Demutualizations in the United
References: 6 7 The Toronto Stock Exchange: A Blueprint for Success, at 5–6 (8 October 1998)