About TASE Clearing House (TASECH)
The Tel Aviv Stock Exchange Clearing House Ltd. ("TASECH") was established in 1966. The TASECH is a wholly owned subsidiary of TASE and it is supervised by the Israel Securities Authority.
The TASECH operates by virtue of the bylaws that govern the reciprocal relations between the Clearing House and its members.
TASECH serves as a central counter party (CCP)
for trading transactions in securities traded on TASE, transactions transferring to a custodian for safekeeping executed on the TASE and for MTS trading transactions. In order to secure TASECH's financial risk, the Clearing House holds a risk fund, collateral against transactions for which there is insufficient inventory, an agreement for the purchase of bonds with the Bank of Israel, and legislation regarding the stability of TASECH. In addition, TASECH provides security depository services (CSD)
for all securities registered with the TASECH.
TASECH is recognized as a QCCP from the Israel Securities Authority
TASECH is recognized as a QI from the IRS.
TASECH holds an inventory account with DTC.
The TASECH does not have employees or its own production facilities and it receives any operational infrastructure required for its operation from the TASE.
All 16 TASECH members are TASE members
, (including the Bank of Israel and two foreign banks – HSBC and Citibank).
Clearing House Board of Directors
TASECH board of directors comprises a maximum of 15 members. The Directors are appointed by the General Assembly, provided that at least three directors are independent directors and one director has professional qualifications (has experience in the capital market and in the clearing field).
TASECH provides the following services:
The Clearing Method
Clearing is settled using the Netting method on a DVP - Delivery versus Payment basis. In other words, simultaneous money and securities transfer between buyer and seller, in two clearing rounds.
Monetary Clearing are settled through the Bank of Israel’s Real Time Gross Settlement system (RTGS
), by debiting / crediting the accounts of TASECH members who are banks. TASECH members who are not banks carry out the settlement through a TASECH member who is a bank.
Cash and securities settlement for all type of securities and open mutual funds units of trading day (T) occur on the following clearing day (T+1) at the first multilateral window
- RTGS participant banks with a Bank of Israel account receive clearing services.
- Non-bank Clearing House members - clearing by means of debit / credit of the clearing member, who is an RTGS participant bank, according to an agreement signed between TASECH and the non-bank TASECH member.
Financial transactions between more than two members are carried out through a multilateral payment order that is transferred by TASECH for clearing during three settlement "windows" set in the RTGS system.
RTGS Multilateral Settlement Windows
- First multilateral window: 08:50 (25 minutes) (Clearing of the first clearing round of the previous trading day)
- Second multilateral window: 15:45 (15 minutes). On Friday / holiday eve -12:30, during Passover and Sukkot 13:45..(Clearing of the second clearing round)
- Additional clearing window: 17:45 (15 minutes), used for MTM transactions in suspended transactions (not on Fridays / holiday eve / Passover and Sukkot)
In order for the banks to be able to take care of liquidity within the time window, the Clearing House TASECH sends multilateral pay order data to the RTGS system, 15 minutes before the time window begins. This stipulated by a commitment of the MPMC (Member that Performs Monetary Clearing) for money debiting of the NCHM (Not a Clearing House Member).
Clearing Securities ("Inventory")
Each TASECH member has "inventory accounts" at the Clearing House, where the balances of his customers' securities are held. Clearing of securities inventory is carried out in Netting by the TASE clearing system, by debiting / crediting the inventory accounts of TASECH members managed by the Clearing House.
The TASECH has a backup site located more than 20 km from the Tel Aviv Stock Exchange building. The site can start operating within 1-4 hours from the time it is required to do so. The site is checked vis-à-vis TASECH members and the payment systems once a year.
More about TASECH