IndexDemutualisationShareholding structure before mergerManagement structure before mergerShareholding structure after mergerManagement after mergerAdvantageDemutualisationThe process by which a mutual company becomes a publicly traded company. A mutual corporation is a corporation owned by its members or users for the benefit of such members or users. In demutualization, the partners renounce their rights and receive shares in the company in exchange, which the (now former) partners can then sell. Demutualization most often occurs when an exchange owned by its members becomes publicly traded. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get Original Essay Additionally, demutualization is the process by which a mutual (mutual) organization or customer-owned cooperative changes its legal structure to form a joint-stock company. Historically, stock exchanges began as mutually governed and self-regulating structures where profit was not a very strong motivation. Stock exchanges were authorized to promulgate statutes to regulate their operation. Shareholding structure prior to the merger PSX previously operated as a non-profit organization with a mutualized structure in which its members had trading and ownership rights. This structure inherently created a conflict of interest and was perceived as a danger to investor interests. Therefore, the Government enacted the Stock Exchanges (Corporatisation, Demutualisation and Integration) Act, 2012 ('Demutualisation Act'). Management structure before the merger There were physical locations with trading floors. The exchanges had a cooperative and mutually dependent structure. However, with technological innovation came the e-commerce system. The concept of floor trading was no longer successful, so the physical presence of the trader was no longer important, which in turn meant that the cost of bringing in additional members dropped dramatically, reducing the overall trading cost. The membership fee didn't really matter. This in turn reduced the importance of mutual dependence and cooperation. The result was demutualization. Board of Directors Internal Audit and Company Secretariat Managing Directors Head of Training Institute and Human Resources Training House, Library, Human Resources and Marketing Department Chief Operating Officer Marketing Oversight Exposure and Risk Management/Clearing House Head of Legal and Membership AffairsAdministration/ building maintenance and company business.Financial DirectorAccounting and FinanceIT DirectorShareholdership after the mergerAccording to the plan envisioned by the law, the entire paid-up capital of the Stock Exchanges, as calculated after the revaluation of benefits and liabilities, was similarly allocated to the initial shareholders who were previously the individuals from the Stock Exchanges. These underlying investors can hold up to 40% of the offerings allotted to them, while the 60% share was mandatorily held by the exchange. According to the provisions of the law and regulations therein, up to 40% of these saved offers could be distributed to a strategic investor and financial institutions, while the remaining 20% ​​of the offers should be allocated to the overall population. The returns that will be obtained from this disinvestment will have to be distributed similarly among 121 investors. As per the Demutualization Law, members have now stopped being members of PSX and have been issued Trading Right Certificates ("TRECs") and PSX Offers, thereby isolating the rights.