IDEAS home Printed from
   My bibliography  Save this paper

Changes in the Ownership and Governance of Securities Exchanges: Causes and Consequences


  • Benn Steil


Over the past five years we have witnessed substantial changes in the ownership and governance structures of securities exchanges, particularly in Europe. Recent surveys indicate that a substantial majority of the world’s exchanges would like to “demutualize” in the coming years. The concept of demutualization remains a hazy one, however, along multiple dimensions: the factors that distinguish a demutualized from a mutualized exchange, the factors that motivate demutualization, and the implications of demutualization for the way in which exchanges are regulated. In seeking to clarify the meaning of demutualization, we hope as well to clarify the sources of conflict between the role of an exchange as a commercial enterprise acting in the interests of its owners and its role as a quasi-regulatory body. Government regulators around the world have expressed concern about the effect of exchange ownership and governance reforms on the ability of exchanges to meet the self-regulatory obligations devolved to them. Mutuality and self-regulation in the public interest are typically seen as going hand-in-hand. As we discuss in some detail, it is this misapprehension that lies at the heart of many concerns directed at demutualization. Regulatory failures are inevitable any time self-regulatory obligations imposed on an exchange conflict with the commercial interests of the exchange’s owners. Such commercial interests are no less powerful for a mutualized exchange than for a demutualized one.

Suggested Citation

  • Benn Steil, "undated". "Changes in the Ownership and Governance of Securities Exchanges: Causes and Consequences," Center for Financial Institutions Working Papers 02-15, Wharton School Center for Financial Institutions, University of Pennsylvania.
  • Handle: RePEc:wop:pennin:02-15

    Download full text from publisher

    File URL:
    Download Restriction: no


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. John P. Caskey, 2003. "The evolution of the Philadelphia Stock Exchange: 1964-2002," Working Papers 03-21, Federal Reserve Bank of Philadelphia.
    2. Claessens, Stijn & Klingebiel, Daniela & Schmukler, Sergio, 2002. "Explaining the Migration of Stocks from Exchanges in Emerging Economies to International Centres," CEPR Discussion Papers 3301, C.E.P.R. Discussion Papers.
    3. Diamond, Stephen F. & Kuan, Jennifer W., 2018. "Are the stock markets “rigged”? An empirical analysis of regulatory change," International Review of Law and Economics, Elsevier, vol. 55(C), pages 33-40.
    4. Ben Slimane, Faten & Padilla Angulo, Laura, 2019. "Strategic change and corporate governance: Evidence from the stock exchange industry," Journal of Business Research, Elsevier, vol. 103(C), pages 206-218.
    5. Manuela Geranio, 2016. "Evolution of the Exchange Industry," Springer Books, Springer, number 978-3-319-21027-8, September.
    6. Otchere, Isaac & Abou-Zied, Khaled, 2008. "Stock exchange demutualization, self-listing and performance: The case of the Australian Stock Exchange," Journal of Banking & Finance, Elsevier, vol. 32(4), pages 512-525, April.
    7. Ben Slimane, FATEN, 2007. "L'Evolution des Marchés Boursiers Européens: Enjeux et limites [European Stock Market Evolution]," MPRA Paper 2607, University Library of Munich, Germany.
    8. Andrew Worthington & Helen Higgs, 2006. "Market Risk in Demutualized Self-Listed Stock Exchanges: An International Analysis of Selected Time-Varying Betas," Global Economic Review, Taylor & Francis Journals, vol. 35(3), pages 239-257.
    9. Otchere, Isaac, 2006. "Stock exchange self-listing and value effects," Journal of Corporate Finance, Elsevier, vol. 12(5), pages 926-953, December.
    10. Ramos, Sofia B. & von Thadden, Ernst-Ludwig, 2008. "Stock exchange competition in a simple model of capital market equilibrium," Journal of Financial Markets, Elsevier, vol. 11(3), pages 284-307, August.
    11. Faten Ben Slimane, 2012. "Stock exchange consolidation and return volatility," Managerial Finance, Emerald Group Publishing, vol. 38(6), pages 606-627, May.
    12. Baris Serifsoy, 2008. "Demutualization, outsider ownership, and stock exchange performance: empirical evidence," Economics of Governance, Springer, vol. 9(4), pages 305-339, October.
    13. Serifsoy, Baris, 2007. "Stock exchange business models and their operative performance," Journal of Banking & Finance, Elsevier, vol. 31(10), pages 2978-3012, October.
    14. Amira, Khaled & Muzere, Mark L., 2011. "Competition among stock exchanges for equity," Journal of Banking & Finance, Elsevier, vol. 35(9), pages 2355-2373, September.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wop:pennin:02-15. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Thomas Krichel (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.