The members of the Clearing House are members of the TASE, who have both the
organizational and technical infrastructure enabling them to clear transactions
and also substantial equity capital. (A list of the Clearing House members and
their equity capital as of 30.6.95 appears in Appendix "A".)
The satisfactory operation of the Clearing House depends on the stability of
its members and mainly those who are members of the TASE. According to the
Guidelines, a non-bank member must have minimum equity capital of approx. NIS 7
million or a smaller amount, being a function of its activity. (1)
A member of the Clearing House which is a bank clears its transactions in
the Clearing House through two accounts: a securities account in the Clearing
House and a current financial account with the Bank of Israel. After a bank
purchased securities on the TASE, its securities account in the Clearing
House is credited and its account at the Bank of Israel is
debited. On a sale of securities, the process is reversed - the member's
securities account in the Clearing House is debited and its
account at the Bank of Israel is debited.
The transactions of a non-bank member are cleared in the following way: the
securities are cleared in the Clearing House in the same way as with a bank
member, whilst the financial clearance, instead of being performed directly by
the Bank of Israel, is performed through a financial account with a bank member
of the Clearing House, which guarantees the non-bank member's financial
activity in accordance with a guarantee agreement made between them, which
inter alia specifies the maximum guarantee. For example, on a purchase of
securities by a non-bank member, its securities account in the Clearing House
is credited, whilst the financial account of the bank which clears that
member's financial transactions is debited.
As mentioned, the Clearing House has 23 members, whilst there are 26 full
members of the TASE. Each of the three TASE members who are not also members of
the Clearing House performs its clearance transactions (both securities and
financial clearance) through one of the members of the Clearing House. Clearance
is also effected in this way for membership candidates.
(1) The equity required of a non-bank member as a function of its activity is the total of the following:
- (a) NIS 2.3 million;
- (b) 0.25% of the value of the member's portfolios;
- (c) 0.4% of the member's trading turnover in the last half year;
- (d) 50% of the member's expenses in the last half year.