Demutualization of the stock exchange – a landmark achievement
Stock exchanges have been operating in Pakistan as non- profit organizations with a mutualized structure that made members owners with trading rights. Since traders were members and part of the decision- making process, this resulted in conflict of interest and lack of transparency. Investors had serious reservations as the exchanges could be maneuvered to maximize the interests of the members. Through the efforts of the Security and Exchange Commission of Pakistan ( SECP) towards demutualization of the stock exchanges, a bill was approved at a joint sitting of the parliament on March 27, 2012 and was enacted law by the signature of the president on May 27, 2012. The aftermath of the demutualization has been a booster in investor confidence and rapid rise in the Pakistani stock exchanges and investments have poured in from local and foreign investors.