The move is prompted in collaboration with the
Israel Securities Authority and the Bank of Israel, given the importance of strengthening
the international profile of public companies and the Israeli
capital market, especially at this time
TEL AVIV, Israel, May 16, 2024
/PRNewswire/ -- The Tel Aviv Stock Exchange (TASE: TASE) publishes
today a call for public comments on two contemplated new trading
day formats, in collaboration with the Israel Securities Authority
(ISA) and the Bank of Israel. This
joint initiative seeks to explore the benefits and implications of
changing the current trading format, with the aim of removing
barriers for global investors, increasing benefits for Israeli
companies and local investors, and enhancing liquidity.
Following repeated discussions of this topic over the years and
as it is now more crucial than ever to strengthen the international
profile of the Israeli capital market, it has been decided to
revisit the matter and thoroughly explore the possibility of
aligning TASE's trading-day format with international standards,
based on one of two proposed alternatives:
- Switching from the current Sunday to Thursday trading week to
trading on Sunday (starting at 12:00) through Friday.
- Switching from the current Sunday to Thursday trading week to
trading on Monday through Friday.
Given the complexity of the process, TASE would like to obtain
information, insights, and positions concerning the proposed
changes, including: theoretical considerations; the various aspects
that contribute to the preference of each of the alternatives;
specification of the parties that may be affected by this move; the
anticipated economic ramifications in the short and long term;
implications for relevant employees in terms of working days and
hours; the attractivity of the Israeli public capital market to
foreign market participants; and the potential effect on the
TASE-listed companies, including as regarding immediate reports and
capital raising.
The current situation makes it challenging for global
investors to operate in the Israeli capital market
The trading week on TASE currently ends on Thursday, with
extended hours overlapping the European market and a few
overlapping hours with the US market. Trading in the US continues
on Thursday afternoon (Israel
time) and global trading also resumes on Friday. This means that
after trading on TASE is concluded for the week, trading on the
international markets continues for two more consecutive days -
Thursday afternoon and Friday. It effects on local participants and
particularly on global investors, who consistently stress that the
unique trading methods in Israel
pose a real hindrance.
The fact that TASE does not trade on Friday delays global
investors, making it difficult for them to transact in local
securities that are critical to local companies and to the Israeli
economy, since the gap in trading days complicates necessary
adjustments to securities traded on TASE that are also included in
global indices, requires hedging where foreign investors wish to
carry out transactions on Friday in securities traded on TASE, and
requires them to trade on Sunday, which is a global day of
rest.
Aligning TASE's trading days to global standards would help
improve the accessibility of the local market to active and passive
international investors and international primary dealers, which is
likely to enhance liquidity in the local market. The
participation of global investors in the local capital market is
crucial for both local companies and the Israeli economy.
Local investors remain exposed to fluctuations on those two
consecutive trading days and can only address them on Sunday. This
exposure creates information gaps, makes it difficult to respond in
a timely manner global market events and requires additional
collateral due to the partial overlap between trading days in
Israel and abroad.
In addition to resolving the aforementioned issues, TASE points
out that trading on Friday could facilitate Israel's inclusion in the MSCI Europe index.
It would also allow the various local investors more flexibility in
trading in response to material market announcements abroad on
Fridays. Moreover, trading on Fridays means an additional trading
day for government bonds on the MTS system.
The potential overall benefits could increase international
activity, enhance market liquidity and enable local institutional
investors to increase their activity on the local capital market,
encouraging other local participants to join in.
It should be noted that changing trading days will require
complex preparations by TASE, its members (banks and investment
houses) and other entities, such as mutual fund managers and
reporting corporations. In order to address the complexities
of Friday trading, Sunday trading will start at 12:00, allowing for
the completion of processes initiated on Friday that were not
finalized before Shabat.
Written responses must be submitted by June 30, 2024. TASE pledges to "seriously
consider all submissions received" and, if necessary, to contact
relevant functions.
Contact:
Orna Goren
Head of Communication and Public Relations Unit
Tel: +972 76 8160405
tase.ir@tase.co.il
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content:https://www.prnewswire.com/news-releases/the-tel-aviv-stock-exchange-tase-publishes-a-call-for-the-public-comments-on-the-alignment-of-its-trading-days-to-international-standards-302147493.html
SOURCE The Tel Aviv Stock Exchange Ltd.