Demutualization is the process by which a customer-owned mutual organization (mutual) or cooperative changes legal structure to form a joint stock company. Historically stock exchanges started as a mutually governed, self-regulated structures where profit was not a very strong motive. The stock exchanges were authorized to promulgate by-laws to govern their functioning. They were physical locations with trading floors. The stock exchanges had a mutually dependent, co-operative structure. However with technological innovation came electronic trading system. The concept of floor trading no longer held ground, hence the physical presence of the trader was no longer important, which in turn meant that the cost of inducting additional member fell drastically, reducing the overall trading cost. The membership fee did not have much of significance. This in turn reduced the importance of mutual dependence and cooperation. The outcome of this was demutualization.