The process of corporatizing and demutualizing

Within the time frame that may be prescribed by the Securities and Exchange Board of India, all recognised stock exchanges mentioned in section 4A shall submit a corporatization and demutualization plan for approval to the board. It is high time that you shall see notes on section 12a of income tax act.

The Securities and Exchange Board of India may designate the name of a recognised stock exchange that has already been corporatized and demutualized by publication in the Official Gazette, and such a stock exchange will not be required to register the scheme under this section.

The Securities and Exchange Board of India may, upon receipt of the scheme mentioned in the aforementioned sub-section, approve the scheme with or without modifications after conducting any necessary inquiries and obtaining any additional information that may be necessary. If the Securities and Exchange Board of India is satisfied that doing so would be in the best interests of the market and the general public.

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If the Securities and Exchange Board of India has proposed the issuance of shareholdings for legal consideration, the requirement of trading rights in place of a membership card for members of a recognised stock exchange, or the payment of dividends to members from any reserves or assets of that stock exchange, no scheme under the aforementioned sub-section shall be approved by that Board.

If the scheme is accepted under the aforementioned clause, it must be publicised right away by:-

  (a) India's Securities and Exchange Board in its official gazette;

  (b) the recognised stock exchange in those two Indian daily newspapers, as the Securities and Exchange Board of India, may specify,

and following such publication, the scheme will take effect and be binding on all parties, including all members, creditors, depositors, and employees of the recognised stock exchange, as well as all other parties with whom the scheme has any contract, right, power, obligation, or liability, regardless of anything to the contrary contained in this Act or any other law currently in effect or any agreement, award, judgement, decree, or another instrument currently in force.

If the Securities and Exchange Board of India determines that the approval of the scheme under the aforementioned sub-section would not be in the best interests of the market and the public, it may, by order, reject the scheme, and such application of rejection shall be authored by it in the Official Gazette.

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