The Tel Aviv Stock Exchange has undergone various transformations and homes. Since its establishment in 1935 as the Exchange Bureau for Securities in a branch of the British Anglo-Palestine Bank, and until the move to its current location, which provides a fitting solution to present-day technological challenges. Below is an overview of the main milestones in the history of the TASE.
1935 – Establishment of the "Exchange Bureau for Securities"
Securities trading in Palestine began in the 1930s, following the immigration to Israel of Jewish bankers who fled Nazi Germany. The Anglo-Palestine Bank, which later became Bank Leumi, established the "Exchange Bureau for Securities" in 1935. The Exchange Bureau functioned as a small stock exchange in which securities were traded, for an hour each day, according to the rules that were customary on European stock exchanges. The trade was conducted at the bank, in the office of Mr. Mordechai Pinchas Hasson, an Israeli banker, one of the founders of the Exchange Bureau of Securities and the CEO of Bank Leumi (from Wikipedia, the free encyclopedia)
1953 - Establishment of the Tel-Aviv Stock Exchange
Following the establishment of the State of Israel, in light of an increase in trading volumes and in the number of companies that issued to the public, the need to institutionalize trading in securities increased. Banks and investment houses that operated in Israel at the time formed and established the Tel Aviv Stock Exchange in 1953. The TASE began operations on September 14, 1953, and trade continued to take place in the offices of Bank Leumi until 1960, when the stock exchange moved to an independent residence in a covered passageway at 113 Allenby Street in Tel Aviv.
1966 - Establishment of the TASE Clearing House
With the increase in stock exchange activity, the need for advanced clearing services grew. On February 1, 1966, TASE members established the TASE Clearing House and at the end of the 1980s, after years of manual clearing, the TASE Clearing House completed automation of all securities transactions clearing.
1968 - Establishment of the Israel Securities Authority (ISA)
The TASE's achievement of a significant role in the Israeli capital market led in 1968 to the enactment of the Securities Law, which for the first time regulated trade and stock exchange activity and the established the Israel Securities Authority. The law adopted supervisory principles accepted in the United States and England, which focus on the duty of proper disclosure imposed on listed companies. The role of the Israel Securities Authority is defined as safeguarding the interests of the investing public, while maintaining proper and fair trading and stock exchange activity.
1983 - The TASE moves to Ahad Ha'am Street
With the increase in trading activity, the TASE moved from its residence at 113 Allenby Street to its new building on 54 Ahad Ha'am Street in Tel Aviv.
1983 - Bank Stock Crisis
The decommissioning of government bonds in 1975 made trading in stocks the focus of activity in the capital market. Between 1977 and 1983, volatility in share prices developed, and the number of companies and trading volumes increased significantly. 1982 was a record year for activity, with stock prices rising by 113% in real terms. The boom increased the need for more spacious and sophisticated trading halls, and in February 1983 the TASE moved from Allenby Street to its new location at 54 Ahad Ha'am Street in Tel Aviv. That same year, however, the boom ended in a sharp stock crash: at the end of January the "free" stocks plummeted, and on October 6, the bank stock bubble burst. For the first time, the TASE closed for two weeks.
1991 - Operation of the Computerized Auction System
In September 1991, the TASE operated the Computerized Auction System which enabled, for the first time, trading via a computer.
1993 - Options Trading on the TA-25 Index
In 1993, the TASE launched the first trading of options on the TA-25 index, and a year later trading in options on the dollar exchange rate began.
1997 - The TACT Era Begins
In 1997, a "continuous" trading system (TACT - Tel Aviv Continuous Trading) was launched on the TASE for continuous and computerized trading in securities. Gradually, all the securities and derivatives were transferred to the TACT system, and in October 1999, another chapter was signed in the history of the TASE and the mythological trading halls were closed.
1999 – Closure of TASE’s trading floorsIn October 1999, TASE brought down the curtain on the trading floors era and ever since trading has been fully automated making use of a “continuous” trading system for all the securities listed on TASE.
2000 - The Dual Listing Law
In October 2000, the Knesset approved Amendment No. 21 to the Securities Law, which makes it easier for companies whose shares are traded in the United States to be listed for trade in Tel Aviv ("dual listing"). In July 2005, dual listing was expanded to companies listed on the primary list at the London Stock Exchange and on NASDAQ Small Cap. During 2018 Hong Kong, Singapore and Toronto were added also for dual-listing. Dozens of dual-listed companies are currently traded on the TASE (traded simultaneously in Tel Aviv and in foreign stock exchanges).
2000 - Issuance of a First ETN (Exchange Traded Note)
The first ETN was issued in Israel in 2000, and it belonged to the family of securities traded on the TASE. ETNs are issued by a financial institution (in Israel: ETN companies) and enable investors to track various underlying assets with a common denominator. For example, an ETN may track indices, currencies, commodities, and more.
Today, tens of billions of shekels are managed in a wide variety of certificates that track various indices and assets.
2005 – Market Makers in the TASE
In June 2005, market makers began to operate on the TASE. The purpose of market making is to provide liquidity in order to make it possible for investors to buy or sell securities on TASE, at any time.
2007 - Development of the Corporate Bond Market
2007 was a record year for the corporate bond market. The business sector raised about NIS 87 billion through bonds, an increase of 85% compared to the previous year, following the reduction in government bond issues in the first six months and the effects of the reform in pension funds. The turnover of daily trading in bonds jumped twofold compared to last year and amounted to more than NIS 3 billion.
2014 - The TASE moves to Ahuzat Bayit Street
After 30 years on Ahad Ha'am Street, the TASE moved to its new home on 2 Ahuzat Bayit Street, Tel Aviv.
The move sharpens the fusion of tradition and stability on the one hand and innovation and technological advance on the other. The new building is located in the heart of Tel Aviv’s “City” and is a dedicated structure designed from its conception to address the nature and scope of TASE’s activity and its ability to serve the capital market.
The new building includes secured infrastructure in compliance with demands from the civil defense authorities, which are suitable for TASE’s advanced communications and trading systems. The subterranean IT center was built for “non-stop exchange operations”, including investments made to address a wide variety of scenarios. ,
2016 - Launch of the High-Tech Analysis Project
In the framework of implementing the recommendations of Committee for Promotion of Investments in Research and Development traded companies (the "R&D Committee"), and in order to determine accurate pricing for technology and biomed companies, to improve the level of knowledge of investors and to reduce the barrier of lack of knowledge and understanding among investors, the TASE signed an agreement with Edison and Frost & Sullivan in February 2016 for the analysis of technology and biomed companies traded on the TASE.
In order to maintain professional, independent and unbiased analysis, the companies signed an agreement with the TASE to receive the analysis services for an obligatory period of two years. The companies cannot withdraw from the project during this period. The analysis is funded by the companies surveyed and with funding from the Chief Scientist and the TASE. The analyses are published in the Magna and Maya systems in English, along with a Hebrew abstract.
2017 - The Reform of the TASE indices – “the Diffusion Reform”
The indices reform was the most significant change that has taken place in the TASE indices in the past 25 years.
The reform had several objectives, including: improving the stability of the TASE indices, broadening the sectoral diffusion within the various indices, setting more stringent threshold terms for the flagship indices and easing the threshold terms for the other indices, encouraging foreign investors to invest in the TASE indices, significantly increasing the free float rate for the shares included in the flagship indices, fully realizing the potential of small and medium company shares, and enlarging the infrastructure for launching new indices. Additional information about TASE’s indices
2017 - TASE Demutualization
On April 2017, the Knesset ratified an amendment of the Securities Law enabling changes to TASE's ownership structure and on September 2017 the District Court ratified the TASE demutualization arrangement, enabling changes to TASE's ownership structure, which turns the TASE into a company of profit, while separating TASE membership from ownership TASE shares.
On August 2018, the Israel Securities Authority (ISA) approved the transaction for the change in TASE’s ownership structure within the framework of which five international investors acquired.
The sale of the shares will lead to a separation between the ownership of the stock exchange and its membership.
The change in the ownership structure will enable the stock exchange to focus on its business in a way that serves its business, its shareholders and all its users, and to direct its activities in a manner that is more competitive and efficient. Furthermore, the entry of international investors will give global access to the TASE and the Israeli capital markets, which should assist in making the TASE more accessible to new companies, investors, and markets; and to contribute to an expansion of its membership base.
2018 – The Nominee Company
The Nominee Company was established on January 2018 as a private subsidiary of the TASE, fully owned by the TASE. According to the definition in the Securities Law, the only activity of the new Nominee Company will be the holding of securities. It will provide services to companies issuing on the TASE and to additional companies that wish to register their securities in the clearing house. The TASE's listing company will provide, for the first time in Israel, digital registration services without the need to issue a physical certificate, in order to reduce the risks in the registration process and to save operating expenses to public companies.
The Nominee Company is engaged in two main areas of activity: it ensures the proper and complete registration of the number of securities registered in its name (held by the public) and serves as a conduit for the transfer of payments deriving from corporate actions (such as dividends, interest) between the issuing companies and the end-holders of the securities.
2018 – ETF - Exchange Traded Fund
In accordance with an ordinance from the Ministry of Finance, the process of converting the ETNs (Exchange Traded Notes) into ETFs took place at the end of 2018. The ETF is a financial instrument designed to passively track indices of stocks, bonds or commodities. The ETF invests according to a predetermined index.
The ETF is obliged to make its “best effort” in tracking the index. Consequently, an ETF is a product that should yield a similar but not identical return to the return on the index that it tracks. ETFs are subject to the Joint Investments Trust Law, in accordance with Amendment 28, similar to mutual funds.