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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.


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SECP ISLAMABAD, October 10, 2009 (Balochistan Times): The Stock Exchanges Corporatization, Demutualization and Integration Law drafted by the Securities and Exchange Commission of Pakistan has been approved by the National Assembly and is soon expected to be placed for promulgation before the Senate.
In October 1999, Sun proposed a demutualization plan to its policyholders whereby the policyholders would be given shares of stock in a new holding company that would become Sun's corporate parent.
Facts In December 1999, the holders of participating life insurance policies (the policyholders) issued by Sun Life Assurance Company (Sun Life), a mutual life insurance and financial services company based in Canada, approved a demutualization plan for the company that was effective in March 2000.
 
 
 
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