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How is a demutualised exchange different from a mutual exchange?

1. INVESTMENT BASICS

2. SECURITIES

3. PRIMARY MARKET

4. SECONDARY MARKET

4.1 INTRODUCTION

4.1.1 Stock Exchange

4.1.2 Stock Trading

4.2 PRODUCTS IN THE SECONDARY MARKETS

4.2.1 Equity Investment

4.2.2. Debt Investment

5. DERIVATIVES

6. DEPOSITORY

7. MUTUAL FUNDS

8. MISCELLANEOUS

9. CONCEPTS & MODES OF ANALYSIS

10. RATIO ANALYSIS

In a mutual exchange, the three functions of ownership, management and trading are concentrated into a single Group. Here, the broker members of the exchange are both the owners and the traders on the exchange and they further manage the exchange as well. This at times can lead to conflicts of interest in decision making. A demutualised exchange, on the other hand, has all these three functions clearly segregated, i.e. the ownership, management and trading are in separate hands.

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