Israel's Securities Regulator, Credited With Reviving the Tel Aviv Stock Exchange, Stepping Down

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Shmuel Hauser participating in a Knesset session, September 24, 2017.
Shmuel Hauser participating in a Knesset session, September 24, 2017.Credit: Emil Salman

Shmuel Hauser is stepping down as Israel’s chief securities regulator after six and a half years during which he acted to revive a moribund Tel Aviv Stock Exchange and led probes of some of the most senior figures in the Israeli economy.

The Israel Securities Authority said Hauser would remain chairman to the end of the year. It said Finance Minister Moshe Kahlon named Anat Guetta, until earlier this year the CEO of proxy advisory firm Entropy Financial Research, to succeed him.

Hauser said Kahlon had asked him to stay on until the beginning of 2018 in order to complete ongoing projects.

He cited proposals to establish infrastructure for a secondary stock exchange, enlist a foreign bourse as a strategic partner, reach dual-listing accords with stock exchanges in Hong Kong, Singapore and Toronto and overhaul Israel’s system of exchange-trade funds.

Taking over as ISA chairman in 2011, Hauser focused much of his attention of helping the TASE reverse a trend of declining trading volumes and a shrinking list of listed companies. After peaking at a daily average of 2 billion shekels ($572 million) in 2010, volumes slid as foreign investors pulled out of the market when the TASE lost its emerging-market status.

While still below 2010 levels, activity picked up to an average of 1.4 billion shekels a day in the first 10 months of 2017. Overhauling the TASE wasn’t easy, and in the process both the CEO and the former chairman stepped down in 2013.

This year a law was passed to make the TASE a for-profit corporation, a move Hauser said would make it more efficient and competitive. Hauser also sought to remove what he often called an excess of regulation that deterred companies for becoming public and listing on the TASE.

He was the force behind legislation outlawing binary options trading, which became a big business despite frequent accusations that it took advantage of clients.

Hauser’s reforms were complemented by aggressive enforcement of securities law. Among the highest-profile probes was that of Nochi Danker, who had controlled the IDB group, then Israel’s biggest holding group. An ISA investigation into share manipulation ended in Dankner’s conviction in 2016 and a two-year prison sentence.

Three weeks ago, the ISA completed its investigation of Shaul Elovitch, who controls Bezeq, the country’s largest telecoms group, recommending that he be charged with fraud and other offenses. Elovitch denies wrongdoing. A slew of top Bezeq executives and Communications Ministry Director General Shlomo Filber were also named.

Guetta helped found Entropy and served as its CEO from 2010 to 2017. Before that she was CEO of Arko Holdings, a financial services company, and held a series of positions at Mizrahi-Tefahot Bank.

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