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Maintenance

Maintenance Rules

​Maintenance rules are minimum requirements of the companies on TASE, which constitute a condition for their continued listing on TASE. The object of the rules is to encourage companies to increase the spread of their shares amongst investors and to cast real content into their activity. Rules of this type are customary on stock exchanges around the world and were introduced to TASE at the end of 1998.  

Maintenance Requirements

The quantitative requirements of the maintenance rules (detailed below) are based on the requirements for the listing for trade of new companies. Maintenance requirements are significantly less than listing requirements, because of the trend of allowing companies to continue to be traded in times of recession. Additional requirements relate to the company's activity. Non-compliance with one of the maintenance requirements constitutes cause for a security's transfer to the maintenance list and might even result in its delisting from trade on TASE.

The Maintenance List

The maintenance list is a list of securities that were removed from the main list because of non-compliance with the maintenance rules detailed below.
Securities that are included on the maintenance list are traded in the multi-lateral trade, twice a day only, at the beginning of the trading day (opening phase) and at the end of the day (closing action phase).

Causes for the Transfer of a Security to the Maintenance List

Quantitative Requirements

  • The value of public holdings in the company's shares is less than NIS 5 million. Shares will not be transferred to the maintenance list for this cause if the public holdings value therein is more than NIS 4 million and the company has appointed a market-maker.
  • The percentage of public holdings in the company's shares is less than 15% of the company's capital. Shares will not be transferred to the maintenance list for this cause if the public holdings percentage therein is more than 12.5% and the company has appointed a market-maker, or if the public holdings value therein is larger than NIS 15 million.

Transfer to the Maintenance List due to Quantitative Requirements

In January and July of each year TASE reviews public holdings value and percentage data
  • At the beginning of January it reviews the companies' data for December 31 of the previous year.
  • At the beginning of July it reviews the companies' data for June 30.
TASE sends a warning to each company that does not comply with the maintenance rules and gives it a six month extension, during which the company can take action to improve data and comply with the rules.
If at the end of the extension the company does still not comply with the maintenance rules in respect of which the warning was received, its securities are transferred to the maintenance list.

Activity Requirements

  • The company has executed a collection of shares and redistribution of shares or has executed a big private placement, in a percentage constituting more than 75% of the company's capital (transactions the result of which is a material change in the company's activity) and at such time it is not fulfilling the conditions required of a new company.
  • The company no longer has any real activity (Shell Company) and at such time it is not fulfilling the conditions required of a new company.

Transfer to the Maintenance List due to Activity Requirements

A company which has executed a big private placement or  no longer has activity and has become a shell company, and at such date does not comply with the requirements from a new company, is transferred to the maintenance list right after the date it published an immediate report thereon. In these cases, the company is not given an extension for compliance with the requirements.

What can Companies do?

Companies can act to improve the data in several ways, such as:
  • The sale of shares from interested parties to the public in order to increase public holdings percentage and value.
  • Publication of a prospectus and capital-raising, increasing both equity and the public holdings value and percentage.
  • Introduction of real activity in the volume required of a new company.

List of Companies included in the Maintenance List

A list of the companies included on the maintenance list can be found on TASE's website and on the "Maya" Internet system for publication of the companies' reports (selection from a group of companies).
 
Any company whose securities are included in the maintenance list is marked by addition of the word "maintenance" alongside its name. The company's securities are marked by the addition of the letter "M" alongside the security's name and its trade symbol.

For how long can Securities be traded on the Maintenance List?

The maximum period of time during which a security can be traded on the maintenance list is 48 months. If at the end of this period conditions enabling the security's renewal of trade on the main list are not fulfilled, the security will be delisted from trade. 

What is required for Renewal of trade on the Main List?

For renewal of trade on the main list, a company must comply with higher quantitative requirements than those stipulated as conditions for transfer to the maintenance list, in order to prevent a situation in which companies are transferred from the maintenance list to the main list and thereafter frequently returned to the maintenance list.
 
The conditions for the renewal of trade on the main list change after the first 24 months and are detailed under the renewal of trade chapter.

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