ISA seeks to eject cryptocurrency stocks from TASE


A proposed amendment to Tel Aviv Stock Exchange regulations follows highly volatile trading in shares of companies announcing cryptocurrency activity.

The Israel Securities Authority (ISA) published a draft guideline today containing drastic measures concerning stock exchange-listed companies active in cryptocurrencies. The ISA proposes a temporary, two-year amendment to the Tel Aviv Stock Exchange regulations whereby the shares of a company whose main activity is investment in, holding, or mining cryptocurrencies, such as Bitcoin, whose shareholders' equity is below NIS 100 million, and that does not have financial statements for at least three years, will not be able to be traded on the exchange, and its shares will be delisted. The ISA will not allow companies without "real" activity beyond cryptocurrency mining to join the stock exchange, and will even take steps to eject such companies.

The measure is a provisional one that does not represent full regulation of this area. ISA chairman Shmuel Hauser has warned several times recently of the dangers of trading in cryptocurrencies

The regulation process is expected to take months, and will be completed by Hauser's successor Anat Guetta. Public comment on the interim guideline will be accepted until January 25, so that TASE regulations will not be amended before that date, and it will take several weeks until it happens.

The ISA said, "The proposal comes against a background of extraordinary trading in securities of companies on the Tel Aviv Stock Exchange that announced that they intended to embark on activity in cryptocurrencies. In one recent case, a report by a company that it was entering coin mining led to unusual trading in the company's securities, to the extent of a rise of thousands of percentage points in its share price even before any substantial activity had taken place in it that could be assessed for its results. Such instances raise the concern that the share prices of companies that intend to become active in this filed are detached from their real value, and that the market behaves irrationally and unpredictably towards these stocks. This phenomenon, if it continues, is liable to have severe consequences in the future for the probity and fairness of trading on the stock exchange in general, and for investors' confidence in it."

Published by Globes [online], Israel business news - - on January 4, 2018

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