CEO of the Tel Aviv Stock Exchange (TASE), Yossi Beinart, said: "We are delighted that our efforts to bring companies into TASE are fruitful. We acted quickly to correct distortions for the benefit of the entire market while not closing the door to foreign companies looking to be traded on TASE".
In its meeting last Thursday (November 19, 2015), TASE's board decided the definition of "a foreign company with an Israeli Orientation" for the purpose of addition to indices and the weight cap for companies added to indices, until the implementation of the expected new indices methodology.
TASE's management announced early this year that it would take active and determined measures to increase trade volumes as well as the number of traded stocks and attract additional companies to be listed and trade on TASE. Diversity in and expansion of the base of companies listed on TASE are strategic goals for TASE, serving the benefit of the Israeli economy and capital market.
Due to the relatively long timeframes required for the implementation of in-depth actions to increase the number of stocks traded on TASE – including, among other things, legislation amendments for implementation of the recommendations of the R&D Committee and the encouragement of trade in general - TASE commenced active marketing efforts vis-à-vis companies listed on leading U.S. exchanges. These efforts have generated much interest among foreign companies in listing for trade on TASE, and several companies are presently considering the possibility of listing in Tel-Aviv.
The introduction of foreign companies into the trade in Tel-Aviv and the possibility of their addition into TASE's flagship indices have required TASE's management to make necessary adjustments in the entry rules into TASE indices – all until the implementation of the newly expected methodology in TASE's indices, which was announced several months ago and is scheduled to be completed in 2016.
As noted, a "foreign company" has been defined for the purpose of the directives that have been established. The TASE's board determined that a "foreign company" is a company incorporated outside of Israel and that "Israeli Oriented" will be defined in detail by a TASE committee, which will consist of the Chairman of TASE, the CEO of TASE, the Head of the Trading, Derivatives and Indices Department and the Head of the Economics Department,
The following considerations, among others, will be examined by the committee when making the aforesaid decision:
• Scope of operations in Israel, including R&D operations;
• Scope of assets in Israel relative to the size of the company;
• Scope of employment in Israel;
• Location of the company's headquarters in Israel;
• Dependency of the company on its assets in Israel;
• IPO in Israel;
• Scope of company stocks held by the public in Israel;
• Acquisition or merger with a listed company incorporated in Israel.
As determined by TASE's board, companies incorporated outside of Israel and are not "Israeli Oriented", which will be listed on TASE, will not be added to the indices until the launch of the new indices methodology. It was further determined that the weight cap for a stock added to TASE indices TA-25, TA-75 and TA-100 will be 4%.
The aforesaid adjustments were formulated during the past week, while conducting ongoing dialogue with active participants in the market and listed companies and examining the needs of all investors and players in the market, in order to maintain the balance of the indices and prevent distortions.
CEO of TASE, Yossi Beinart, said: "We have proven that we can act fast and, at the same time, not close our doors to companies listed on suitable exchanges and seeking to be dual-listed in Tel Aviv. We consider an increase in the number of companies listed on TASE a critical condition for its development. We take pride in the fact that our efforts to bring companies into TASE are fruitful, and we will continue to invest great efforts to further expand the circle of Israeli and foreign companies traded in Tel Aviv, for the benefit of the investors and the entire market ".
