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Press Release
September 07, 2017
  TASE’s New Structure Underway - Court Approves Demutualization Arrangement
  Demutualization facilitates entry of new players and will contribute to competition in Israel’s capital market

Amnon Neubach, Chairman of the TASE Board of Directors said: “Today the Tel Aviv Stock Exchange embarks on a new era, joining the world’s leading exchanges. The demutualized facilitates the entry of new TASE players and will contribute to the establishment of partnerships, which will lead in turn, to increasing competition and will strengthen TASE’s position in the Israeli capital market. I wish to express my gratitude and appreciation to the Minister of Finance, Mr. Moshe Kahlon and to the Chairman of the Israel Securities Authority, Prof. Shmuel Hauser, who worked tirelessly to promote this meaningful change, benefitting the development and growth of Israel’s capital market.”

The demutualization of the Tel Aviv Stock Exchange (TASE) is underway. The Israeli Court today, (September 7, 2017) approved TASE’s demutualization under Section 350 of the Companies Law.  In April of this year the Knesset ratified an amendment of the Securities Law enabling changes to TASE’s ownership structure; and at the beginning of August, demutualization received the approval of TASE’s General Meeting.

Under demutualization, TASE’s ownership will be separated from TASE membership. This reform is necessary to enhance competition in the capital market and attract new members from Israel and abroad. It is expected to benefit investors by rendering TASE more prominent and accessible to the public. In TASE’s estimation, the enlistment of new members is expected to lead to the lowering of commissions members charge their clients. The Israeli public currently holds, directly and through institutional investors, some NIS 500 billion equities as well as NIS 900 billion government and corporate bonds.

 Under the demutualization, no single member will hold more than 5% TASE ownership.

 As part of the demutualization process, TASE will be entitled to distribute its earnings and even issue shares in public offerings. Accordingly, TASE will join leading stock exchanges worldwide, which clearly distinguish between ownership and membership, enabling them to raise capital, undertake strategic reforms, engage in inter-exchange partnerships, etc.

Anticipating operations under the new ownership structure, two months ago TASE released a proposal for significant changes in new membership requirements. In keeping with accepted standards abroad, these include the removal of various entry barriers, such as the repeal for minimum number of clients and minimal client portfolio value in favor of minimum operating experience and completion of a trial period. For the press release on this subject, press here.

An additional amendment to the Securities Law will shorten the timetable for obtaining regulatory approval of TASE rules. Accordingly, TASE will be able to respond more expediently to capital market dynamics, while maintaining balance and necessary supervisory safeguards.