Yesterday, after a wait of several months, Minister of Finance Moshe Kahlon acceded to the request of Prof. Shmuel Hauser for a further three-year term as chairman of the Israel Securities Authority (ISA). In May this year, Hauser will have been in the post for five years. The Ministry of Finance announcement said that during his additional term Hauser "will lead moves to reduce the regulatory burden and bring investors back to the stock exchange in Israel", goals that Hauser set for himself years ago.
At the same time, Kahlon released a draft bill for changing the ownership structure of the Tel Aviv Stock Exchange (TASE), after substantial delays in proceeding with the matter, which is being promoted by the ISA.
The ISA drafted the bill, and it underwent several changes since being sent for review and approval by the minister of finance before being submitted to the Knesset. The method of distribution of shares in the stock exchange among the stock exchange members was agreed between the members under TASE chairman Amnon Neubach. It remains to be decided how any shares will be given to TASE employees.
At any rate, the Ministry of Finance announcement states that "the bill stipulates that ownership of the stock exchange will become a corporate structure operating for profit, in a way that separates between ownership and the companies, unlike the existing model of a non-profit organization in which the brokers, the members of the stock exchange, most of whom are part of the banking system, control it."
The Ministry of Finance further states: "The structural change will lead to a reduction in the inbuilt conflict of interests that exists today between the management of the stock exchange and the various interests of the stock exchange members. In addition, the change will end the dominance of the banks in running the stock exchange, and it will contribute to the encouragement of competition on sources of finance in general and the provision of credit in particular, while boosting the supply of investment instruments offered to the public."
Minister of Finance Kahlon said, "We are commencing a move today for strengthening the stock exchange and restoring it to its appropriate position as an engine of the Israeli economy, a stock exchange that will open its door to businesses from Israel and around the world, a stock exchange that will create for the public a varied range of channels for saving. This move will bring us to an era of a more competitive stock exchange that will lead to a reduction in the high trading commissions that the public pays. With the aim of implementing the plan, I have decided to extend the appointment of Prof. Hauser as chairman of the Authority. Prof. Hauser will promote the bill together with Ministry of Finance director general Shai Babad."
Published by Globes [online], Israel business news - www.globes-online.com - on February 23, 2016
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