JERUSALEM, March 20 Israel's parliament on
Monday voted to end Israeli banks' control of the Tel Aviv Stock
Exchange in a reform aimed at turning it into a for-profit
The legislation to demutualise Israel's only stock exchange
passed its final readings in the Knesset. It states that the
banks must sell their TASE shares within five years so each
holds no more than 5 percent.
"The structural change ... will turn the exchange into a
more competitive, cheaper and more efficient bourse, like
advanced ones around the world," said Shmuel Hauser, chairman of
the Israel Securities Authority (ISA).
Israel's banks will be limited to holding no more than 35
percent of shares in the demutualised bourse, down from 71
percent, to bring it into line with other exchanges.
The TASE has struggled for years to revive flagging listings
and volumes, despite attempts to reform.
The new ownership structure, combined with changes to the
oversight of the exchange, will lead to more competition, a cut
in trading fees and greater liquidity for the business sector,
Finance Minister Moshe Kahlon has said.
Along with more than 200 de-listings over the past decade,
TASE volumes have slumped, averaging 1.27 billion shekels
($350.44 million) in 2016, down from 1.45 billion in 2015 and 2
billion a day in 2010.
Under the plan, announced in 2014, member brokerages and
Israeli and foreign banks including Citigroup, UBS and HSBC will
become shareholders. Most stock exchanges in Western countries
have adopted for-profit structures in recent decades.
The new legislation also expands the government's regulatory
oversight, with the chairman of the ISA granted the power to
veto senior appointments to the bourse and fire senior
The TASE began 2017 with a new chief executive, Itai
Ben-Zeev. Last month, the TASE revamped its
indexes, adding 10 more companies to its blue-chip index.
($1 = 3.6240 shekels)
(Writing by Ori Lewis, editing by Steven Scheer, Larry King)