Converting stock exchanges' structures from non-profit, mutually-owned organisation to for-profit entities owned by shareholders is well established global trend to increase transparency at the stock exchanges. It is also needed for achieving a greater measure of balance between interests of various stake holders by clear segregation of commercial and regulatory functions and separating trading rights and ownership rights. It helps in expanding market outreach, attracting new investors, improving liquidity and in enabling the stock exchange to attract international strategic partners.
The importance of capital formation through capital in the developing countries like Pakistan cannot be overemphasised. It plays an important role in channelling savings into investments. Our capital market faced the challenges in the wake of the global financial crisis but fared much better owing largely to the reform measures at in place by the SECP. The passage of the Stock Exchanges (Corporatisation, Demutualization and Integration) Bill by the joint session of the Parliament reflects the commitment of the Government towards the development of capital market and its trust in the stock market for continued economic growth. Making local bourses a major sources of capital formation is a major step towards economic sovereignty. I am confident that demutualization will not only usher into a new era of transparency and striking a greater balance between interests of various stake holders but will assist in attracting foreign investment.