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 ?
Khan said "the structure of Clearing Corporation will be as like demutualised organisation where the board will include majority number of independent directors including the chairman.
When Standard Life demutualised its inherited estate was worth some pounds 800 million.
A study of the demutualised societies by Parliament in 2005 found that the customers had benefited very little and in most cases paid more for a mortgage from a bank than from a building society.
Nonetheless, the subsequent history of demutualised organisations like Northern Rock, Bradford & Bingley and HBOS must surely suggest that demutualisation and its so very deleterious financial and social consequences was a grave mistake.
Halifax demutualised in 1997 and merged with Bank of Scotland just four years later.
Several red-faced firms which demutualised because they claimed they needed fresh cash ended up handing money back to shareholders because they could not find a profitable use for it.
The SECP while approving the plans for segregation of commercial and regulatory functions of the exchanges has ensured that the demutualised entities exhibit enhanced governance and transparency and greater balance between interests of various stakeholders while supporting independent management.
The law stipulated that the stock exchanges be demutualised within 119 days of the promulgation in accordance with the timelines specified in the completion of the cycle.
The amended Finance Bill (2010) would abolish condition for the retail investors/individuals of stock exchanges to file quarterly returns for advance tax and continue income tax exemption on transfer of assets of stock exchanges to demutualised exchanges.
But your correspondent Kenneth Hughes appears to forget that the Tories, who demutualised the Trustee Savings Bank, building societies like Northern Rock and insurance companies, were calling for less regulation, not more.
Rahmani took charge when the exchange demutualised in 2006.
Having seen the damage the international banking crisis had wreaked on some other former building societies, he said he was glad the Principality building society had not demutualised.