DEMUTUALIZATION AND CORPORATIZATION OF STOCK EXCHANGE IN INDIAq

The origin of the stock market in India dates back to the end of the 18th Century after the enactment of the companies Act in 1850 which introduced the feature of limited liability. The Native Share and Stock Brokers' Association, now known as Bombay Stock Exchange (BSE) was formed in Bombay 1875. This was followed by the formation of association /exchange in Ahmadabad (1894), Calcutta (1908) and Madras (1937). In order to promote the orderly development of the stock market the central government introduced a comprehensive legislation called the Securities Contracts (Regulation) Act, 1956. According to section 2(3) of this Act the stock exchange has been defined as “anybody of individuals whether incorporated or not, constituted for the purpose of assisting, regulating and controlling the business of buying, selling or dealing in securities”. This paper also discusses the policy and present scenario of Demutualization of stock market in India.