Quality in Governance of Demutualized Stock Exchanges over Mutualized Stock Exchanges � A Case Study

Dr. P.Roopa

Volume : V, Issue : I, January - 2016

Quality in Governance of Demutualized Stock Exchanges over Mutualized Stock Exchanges � A Case Study

Dr. P. Roopa

Abstract :

To determine the quality of administration of stock markets, organization structure of a stock exchange matters to a large extent. India has two major stock markets, the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). These two exchanges adopt similar trading systems, trade essentially identical stocks, and follow the same trading hours. However, these exchanges have different organizational structures: BSE is mutualized whereas NSE is demutualized. This paper dwells on the comparison between the two structures and shows the better market quality of NSE, which ultimately propose that demutualized exchanges are superior to mutualized in governance.