Israel’s cabinet on Sunday unanimously approved legislation to change the Tel Aviv Stock Exchange into a for-profit entity and move the trading week to Monday-Friday.
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The legislation will go to the Knesset for final approval and would also require the TASE to make available to the investing public trading and clearance charges members collect from their clients in order to encourage more competition.
“This is a process that will bring with it economic growth, strengthen the stock exchange and allow it to return to its rightful place as a central engine of growth of the Israeli economy,” Finance Minister Moshe Kahlon said.
The reforms are aimed at shoring up the TASE, which has seen trading volume sink over the last six years and the number of listed companies fall by about a third.
The 26 TASE members, who now control the exchange, last year approved a demutualization plan, which backers hope with make the exchange more dynamic and internationally competitive.
It would also better enable it to cooperate with foreign exchanges and end Israeli banks’ control over the exchange, he said.
Under the plan, the investment houses and Israeli and foreign banks, including Citicorp, UBS and HSBC, who are now TASE members, would become shareholders. The proposed law encourages them to sell down their stakes to no more than 5% or forfeit their rights as members.
The Monday-Friday trading week, replacing the current Sunday-Thursday one, aims to bring the TASE’s trading more into alignment with overseas markets, enabling traders to react more quickly to market and other developments.