Chapter Six - Trade in Futures

6.1 Listing for Trade

A future will be deemed listed for trade from the time it is issued by the Clearing House until its expiration date.

6.2 Unit of Trade: The unit of trade is one future.

6.3 Method of Trade

6.3.1 Trade in futures will be conducted on the TASE in accordance with the rules of semi-continuous trade ("Mishtanim") as prescribed in the TASE board of directors guidelines, subject to the modifications prescribed in the temporary guidelines of the TASE board of directors relating to rules for the listing of Maof-25 index futures and trade therein.

6.3.2 The maximum fluctuation in the price of a future on a single trading day is 15% of the closing price on the previous trading day, subject to cases in which unlimited fluctuation on the TASE will be permitted in accordance with the TASE board of directors' guidelines.

6.3.3 The TASE members' announcements in trade will be in fixed steps of NIS 10.

6.4 Results of Trade

The results of trade in futures will be published by the TASE in the official price bulletin. The publication will include the prices and volume of transactions which have been executed, as determined by the TASE.

6.5 Position Limits

6.5.1 At the time of opening an account for a customer in futures with a TASE member (hereinafter referred to as "the account"), the customer shall sign an undertaking not to exceed the customer position limits, on the same side (hereinafter referred to as "position limits"), whether with that TASE member or with that TASE combined with his open positions with other TASE members.

6.5.2 Customer position limits, on the same side, are fixed by the Clearing House.

The Clearing House may from time to time modify the customer position limits, on the same side, provided that it gives 30 days' notice thereof.

The Clearing House shall publish the customer position limits, on the same side that are fixed by it.

6.5.2.1 Customer position limits, on the same side, shall apply to all customers and be fixed by distinguishing between the following customer categories:

(a) a mutual fund manager, provident fund manager, vocational studies fund manager, pension fund manager and insurance company, in accordance with the size of their assets;

(b) a portfolio manager, in accordance with the number of his customers;

(c) other customers, in accordance with the size of their securities portfolios;

(d) nostro.

Customer open positions "on the same side" mean:

- the credit balance on call options which the customer has plus the debit balance (absolute value) on put options which the customer has plus the credit balance on futures which the customer has multiplied by two.

- the debit balance (absolute value) on call options which the customer has plus the debit balance on put options which the customer has plus the debit balance (absolute value) on futures which the customer has multiplied by two.

6.5.2.2 For the purpose of the customer position limits, the options and futures which are held in all the following accounts shall be taken into account:

(a) accounts which are in the name of the customer, whether alone or together with others;

(b) accounts which are in the name of relatives of the customer who reside with him or where one is maintained by the other, whether alone or together with others;

(c) accounts which the customer may operate in his discretion pursuant to a proxy;

(d) accounts of a corporation, 50% of whose share capital or voting power is directly or indirectly held in the name of the customer or in the name of the customer's relatives who reside with him or where one is maintained by the other.

6.5.3 On opening the account, the customer shall sign an authority in favor of the TASE member to execute in his account the purchase, sale or writing of a future in such a way as to reduce his total open positions on all his accounts with the member and with other TASE members to the position limits permitted for him.

6.5.4 The TASE member shall use his best efforts to notify a customer who is about to execute a transaction in a future if the transaction which the customer is about to execute might lead to the permitted position limits being breached, and he shall not execute it if in his opinion it appears that such limitation will be breached.

6.5.5 The TASE member shall notify the customer of any breach of the position limits on his accounts with the member immediately it is breached and require the customer to act to reduce it forthwith. Should the customer not reduce the open position, the TASE member shall act to reduce it.

6.5.6 Should it be brought to the knowledge of the Maof Clearing House that a customer is breaching the position limits by the combination of his holdings with several TASE members, the Maof Clearing House shall instruct each of the members through whom the customer acts that during the next three months the position limits of that customer shall be the customer position limits fixed pursuant to section 6.5.2 above, divided by the number of members through whom that customer acts and it shall also instruct each of the members to act immediately as provided in section 6.5.5 above in respect of such new position limits of that customer as aforesaid.

Should it be found that such a customer is again breaching the position limits, the members shall be precluded from executing Maof transactions for him for three months.

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