What is demutualization and how can it contribute to the stock market of Nigeria?
Okereke-Onyiuke who was asked to speak on the issue explained that the global securities markets terrain is replete with cases of the transformation of exchanges from not-for-profit-mutual- membership organizations to for-profit limited liability companies. According to her, “Demutualization promises to improve the governance and overall efficiency of stock exchanges and it was proposed for implementation at the Nigerian Stock Exchange solely for these reasons.
The whole process of demutualization of the exchange is in its infancy and still evolving. Therefore, to say that it is an arrangement for the leadership of the exchange to corner the shares of the demutualized exchange is baseless. The decision to demutualization was made by the council and approved by members of the exchange (i.e. stockbroking firms, banks, state investment companies and other financial institutions, and ordinary members) at the Nigerian Stock Exchange annual general meeting of 2006. The general public, as stakeholders in the stock market, have been duly informed of this development.
Therefore, anybody trying to portray it negatively is being unfair to the exchange’s council and management”, she said. She continued: “Demutualization is also part of the enterprise transformation programme of the exchange which the council has commissioned an international consulting firm, Acenture, to handle”. Otudeko capped the director-general’s submission on the issue. He said, “The demutualization programme is on course and the exchange does not want anything that will derail it”.