Demutualization


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Demutualization

Refers to the process that has come about as the result of many not-for-profit exchanges (mutual companies owned by groups of members) converting to for-profit and then shareholder companies in order to go public.

Demutualization

The process by which a mutual company becomes a publicly-traded company. A mutual company is a company owned by its members or users for the benefit of those members or users. In demutualization, the members give up their rights and receive shares in the company in return, which the (now former) members may then sell. Demutualization happens most often when a stock exchange owned by its members goes public.

As an aside, a mutual company should not be confused with a mutual fund.
References in periodicals archive ?
It may be mentioned that the Stock Exchanges (Corporatization, Demutualization and Integration) Act 2012 provide framework, allowing segregation of ownership and trading rights to enable demutualization of the stock exchanges.
The minister was informed about the background of the demutualization of the exchanges and requirements stipulated in the Stock Exchanges (Corporatization, Demutualization and Integration) Act, 2012 in relation to divestment of 60 percent shares of the stock exchanges lying in the blocked account to the Strategic Investor(s) (SIs), general public and local financial institutions.
At the same time, the Israel Securities Authority is promoting a bill to amend the Securities Law, a measure which is essential for the completion of the demutualization process.
Promulgated on May 7, 2012, the Act provides a framework for the corporatization, demutualization and integration of the stock exchanges.
The government had adopted demutualization regulations for life companies in 1999, but had never created regulations for P/C insurers.
on Thursday, has said the demutualization is aimed at strengthening the insurer's fundraising ability and widening its business options, including mergers and acquisitions, to cope with the dwindling domestic market in graying Japan.
Thus, when policyholders receive stock in a demutualization, they take a zero basis, and upon a subsequent sale of the stock, the full amount of the proceeds is taxed to them as capital gain.
Demutualization refers to the conversion of a mutual insurer to a stock company.
Ruling request: Employer requested a ruling as to whether the demutualization proceeds could be treated as assets of the terminated defined benefit plan and used to increase participants' benefits.
Financial Executive asked Stewart Nagler, vice chairman and chief financial officer of MetLife and an FEI member, to talk about the demutualization and its ramifications, both for MetLife and for the industry in general.
The Video Leadership Seminar provides specific resources such as the most important strategies, the different types of demutualization, and examples and case studies.
LAHORE -- The apex regulator of capital market of Pakistan has shown complete satisfaction over the concrete efforts being made by the Demutualization Committee of Lahore Stock Exchange (LSE) to attract the foreign Strategic Investors as well as local and foreign Financial Institutions for sale of the LSE shares as per requirement of the Stock Exchanges (Corporatization, Demutualization and Integration) Act, 2012.