Market Participants Contributing to Trading Turnovers Growth Will Share in TASE Revenues
The Model is based on Incentive Programs in Operation at the World’s Leading Exchanges
For the first time, the Tel-Aviv Stock Exchange (TASE) today (November 20, 2017) published an incentive program to encourage market participants to increase their trading activity in TA-35 Index derivatives.
Under the new program, drawn up by TASE’s staff, the liquidity of TA-35 Index derivatives will be encouraged by allowing market participants that join the program to participate in a share of the increase in TASE revenues resulting from growth in the turnover of such derivative trading – “Revenue sharing”.
Participants will receive payment at a rate of 30% of the increase in TASE’s revenues from trading in TA-35 Index derivatives. In other words, should TASE revenues increase as a result of a rise in the trading turnover of such derivatives, 30% of the revenue increase will be shared among the program’s participants.
The new program is based on widely used programs that are in operation at the world’s leading derivative exchanges and focuses on the major market participants who contribute to liquidity in TA-35 Index derivative trading.
Main points of the program:
The participants’ payment will be at a rate of 30% of the increase in TASE’s revenues from trading in TA-35 Index derivatives. The program will be open to any market participant that meets the threshold terms that are to be defined, and imposes no obligations on the participants. The payment will be transferred each month to the participants complying with the threshold terms in the month for which the payment is being paid. Moreover, new participants will be able to join the program at any time. The program will be in effect for one year with TASE being able to extend it at its discretion.
The incentive program was drawn up in view of the competition with exchanges that offer similar incentive programs and due to the gradual decline, which has taken place in recent years in the volumes of TA-35 Index derivatives, arising from a decline in market volatility and from local participants’ transition to trading on overseas exchanges, among other factors. It should be stressed that, despite the volumes' decline, TA-35 Index derivatives are a success, not only locally but on an international scale as well.
The TA-35 Index derivatives took seventh place in the 2016 rankings based on trading turnovers in equity index options (according to World Federation of Exchanges data). The proposed program will strengthen the attractiveness of the Israeli derivatives market.
The program was uploaded to TASE’s website for public comment and will remain there for three weeks. Once the public’s comments have been received, the final text of the proposal will be brought before TASE’s board of directors and before the Israel Securities Authority for approval.
Robby Goldenberg, EVP, Head of Trading, Derivatives & Indices Department said: “TASE recognizes the importance of the existence of an efficient, and liquid derivatives market that provides investors with additional investment and hedging alternatives. The proposed incentive program for TA-35 Index derivatives will place TASE in the front rank of the world’s leading exchanges that are operating similar programs. The program’s success will contribute to enhancing TASE’s derivatives trading and to its attractiveness in the eyes of all the participants".
