September 11, 2013 / 1:22 PM / 4 years ago

UPDATE 1-Tel Aviv's stock exchange must demutualise to grow -regulator

By Steven Scheer

TEL AVIV, Sept 11 (Reuters) - Tel Aviv Stock Exchange’s (TASE) members must float the bourse to revive trading volumes that have slumped in recent years, Israel’s securities regulator said on Wednesday.

Volumes have halved since 2010 to 1 billion shekels ($279 million) a day and TASE has seen just three small share listings since the end of 2011.

A row between TASE’s management and the Israel Securities Authority (ISA) over how to boost trade forced the exchange’s chief executive and chairman to resign in July.

“Moving the exchange to a for-profit exchange is most important,” ISA Chairman Shmuel Hauser said, referring to a TASE flotation - one of 20 recommendations in an interim ISA report on boosting volumes and encouraging participation.

“Eight of the 10 highest volume stock exchanges globally are for-profit exchanges. We have to seriously study this,” he said.

A similar proposal in 2007 - when volumes reached their peak and members were making money - was rejected. Hauser said the change in circumstances may make the move more acceptable.

Lowering capital gains tax to 15 percent from 25 percent was also vital, he said.

That, however, would need approval from Finance Minister Yair Lapid. He was not immediately available for comment.

Other recommendations include studying the viability of trading on Fridays rather than Sundays, lowering or eliminating fees for trading and clearing, trading foreign currency and launching new financial products such as credit default swaps.

Trade on Friday, even for just two or three hours, would also help boost volumes, Hauser said. Israel’s work week is Sunday to Thursday.

He also said a TASE committee is considering “dozens” of candidates for CEO and that a decision is likely by mid-October.

A final version of the report is expected in November.

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