Section 3: Demutualization Committee

3. Demutualization Committee.—(1) The members of a stock exchange shall not later than thirty days from the commencement of this Act, in a meeting of the stock exchange, ratify the creation and constitution of the demutualization committee existing at such commencement. (2) The committee shall be fully authorized to— (a) approve the valuation of the stock exchange to be undertaken by the investment bank pursuant to clause (a), sub-section (I) of section 4; (b) enter into negotiations and finalize the sale of not more than forty per cent of the total issued share capital out of the shares lying in the blocked account with any one or more strategic investors or financial institutions; (c) determine the offer price for offer for sale of shares to general public. (3) The committee shall be fully empowered and bound to accept any price offered for the sale of shares by the strategic investor that is equal to or greater than the valuation carried out under section 4, and finalize and enter into an agreement for the sale of such shares to the strategic investor, and the members, the shareholders including the initial shareholders and the stock exchange shall be bound by such agreement: Provided that the decision whether to accept or reject an offer from a strategic investor, if the price offered is less than the approved valuation, shall be made in a meeting of the initial shareholders of the stock exchange through a majority vote, unless the members while constituting the committee, gave such authority to the committee.

Effective date: 2012-01-01

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