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TASE Clearing House - Central Counterparty (CCP)

The TASE Clearing House ("TASECH") acts as a Central Counterparty (CCP) for the following transactions:
  • TACT (Tel-Aviv Continuous Trading) transactions
  • MTS transactions (a European system for bond trading where government bonds are traded)
  • Transfers to a custodian (TASE) – following trading transactions on the TASE.
TASECH guarantees the clearing of transactions for which it serves as CCP for securities and money, in case of failure of one of the TASECH members. In order to secure the clearing of transactions on TASE, TASECH manages the risk fund in which the members of the TASECH deposit collateral.

Transactions for which TASECH does not act as CCP

TASECH does not act as CCP for the following transactions:
  • Off-exchange transactions.
  • Transfers (Transfer of a client portfolio from on TASECH member to another TASECH member)
  • Transfers to a custodian transfers (off-exchange), following off-exchange transactions)
  • Additional transactions that are not trading on TASE or MTS 

Pending Transactions

Transactions in which TASECH is a CCP and that are not settled on T+1 at the first multilateral settlement windows, become a pending transactions. A pending transaction moves to the second multilateral settlement windows, and so for three days until day T + 4 (or up to T + 8 for ADR / Dual Clearing Security).
 
When a transaction status becomes pending, the TASECH suspends the Clearing House member's (the seller) collateral against transactions in which his account did not have enough inventory to clear. Every day up to day T + 4 (or T + 8 in the case of ADR / Dual Clearing Security) if the pending transaction exists, the collateral is adjusted (MTM). The monetary clearing in respect of collateral takes place in the third multilateral clearing window

Calculation of the Frozen Amounts

Calculation of the frozen amounts is according to the opening price of the security on that business day, multiplied by the balance for net delivery, and by a security factor (as specified in the bylaws). The calculation is performed every business day.

Transition from a Pending Transaction to a Failed One

A pending transaction that is not cleared by the closing date of the first multilateral clearing window on the fourth trading day following the date of the original transaction (T + 4) becomes a failed transaction. In such a case, TASECH is required to take the place of the failing member and complete the clearing of transactions executed by them on TASE and for which TASECH serves as a CCP. In securities traded both in Tel Aviv and abroad and settled at  the TASECH both in Israel and abroad. A pending transaction will become a failed transaction if it is not cleared by the closing date of the first multilateral clearing window on the eighth trading day after the date on which the transaction was executed (T + 8).
 

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