Stock exchanges have created wealth out of thin air for many. Often seen as a source of uninterrupted flow of money for outsiders, these are one of the most respected temples of wealth. Not anymore. If global exchanges are to be taken into account, there is a tremendous pressure on the exchanges to evolve and continue to provide value added services to the customers at no extra cost. Led by innovation in technology, a group of bargain hunting customers don't mind switching to other exchanges and often to alternate platforms of trading. Time for the exchanges to shift or shut down. This article suggests that a change in ownership brought in by demutualization can just be the tonic the doctor prescribes to the exchanges.
Post-1990, technology has brought about two significant changes to the business world. First, it presented plenty of scope to those organizations which were wise enough to realign themselves as per the ensuing revolution and entirely written off those that were reluctant. Most significantly, it provided teeth to all the players and every pie of the market share now got acquired faster and faster. At a time when technology opened up tremendous opportunities for new players, the existing (often complacent) players now had to ward off bites to their market share from all directions. Companies suffering from such a dilemma have merely reduced to case studies in management texts. Irrespective of the industry and specialization, the message is for a change. Then how can large organizations like the stock exchanges ignore the siren? After all, they are dinosaurs themselves.
Stock exchanges by virtue of their contribution to the capital markets have long enjoyed a reputation of being sacred. These institutions are typically slow to react and have little incentive to do so. Nevertheless, looking at the swift wind of change across the business landscapes, stock exchanges have to wake up from their hibernation, and provide value addition to their customer at the same time, upholding the highest standard of corporate governance for everybody. Some exchanges have started running towards the goal as others are yet to initiate the course of action. |
