CHANGES IN THE CORPORATE GOVERNANCE AND OWNERSHIP STRUCTURE IN STOCK MARKETS: DEMUTUALIZATION OF ISTANBUL STOCK EXCHANGE

Stock exchanges around the world have experienced major changes with respect tocorporate governance beginning with the early 1990s. Until that time, almost all exchanges weremember-owned, organized as ‘non-profit‘ mutual organizations. Although there were no publiclytraded exchanges 15 years ago, today most of the stock exchanges are demutualized and many ofthem are public listed companies. In this paper, the concept of demutualization is presented withsome historical evolution of this process. The forces that might affect the stock exchanges arepointed out and the problems in the process of demutualization are emphasized. Besides, the keyissues for consideration of the demutualization of Istanbul Stock Exchange (ISE) are discussed indetail, and the impacts of demutualization to the capital markets of Turkey are extensively revealedin this paper. In the light of the evidence provided by the prior studies examining the effects ofdemutualization to the stock exchanges and the advantages of a successful process, demutualizationof ISE is recommended in this study. The successful act of demutualization of ISE will result inmany benefits to the Turkish Economy.