Regulator: TASE facing huge problems
Securities Authority chairman says Tel Aviv bourse on verge of serious issues unless major regulatory changes are made to address fall in trading volume
Israel Securities Authority Chairman Shmuel Hauser said the body was working on a plan to alter the regulatory landscape, including measures to remove barriers, lower costs to companies and ease disclosure requirements, but did not elaborate.
Stock trading volume has slid to an average of about NIS 1.1 billion ($309 million) this year and last, from NIS 1.7 billion ($480 million) in 2011 and NIS 2 billion ($560 million) in 2010.
This was mostly caused by the global downturn, but also because of an exodus of emerging market investors after Israel's bourse was upgraded to developed status from an emerging market.
There were no initial public offerings on the exchange (TASE) in 2012 and just one so far in 2013 - biotech firm Kadimastem that raised NIS 20 million ($5.6 million).
Hauser called for a regulatory overhaul during a special session of the Knesset's Finance Committee convened after two top officials at the bourse said last month they were stepping down.
TASE chairman: Turnover in bonds has grown
"If we do not change our perception about the TASE's importance as a means of (economic) growth, we may find ourselves with huge problems," Hauser said.
"We need regulation to protect investors but we have to be careful of excess regulation that could harm the market," he said. The state of the market must not be viewed as a "runny nose", with everyone simply waiting until it gets better.
TASE Chairman Saul Bronfeld, who submitted his resignation two weeks ago, spoke with a more positive tone, noting that despite falling stock volumes, turnover in bonds had grown.
"The big question is where are the players? Where did the institutional investors go?" Bronfeld said, adding that he had not heard any complaints over the bourse's services or pricing. "The problem lies elsewhere, not the exchange."
In his resignation letter, Bronfeld said the securities authority intervened too much in the TASE's executive management.
Ester Levanon, the TASE's chief executive, said last month she would step down from the bourse at the end of 2013, expressing disappointment the board did not support her plans to increase trading volumes.
