The Tel Aviv Stock Exchange (TASE) publishes a call for the public comments on the alignment of its trading days to international standards

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:

1. Switching from the current Sunday to Thursday trading week to trading on Sunday (starting at 12:00) through Friday.
2. 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
[email protected] 

SOURCE The Tel Aviv Stock Exchange Ltd.