An unusual struggle between the stock exchange and the Securities Authority. The stock exchange filed a High Court case against the authority claiming that it prevents it from becoming a competitive entity and insists on the lack of authority to approve the exchange’s rates.
The petition states that the stock exchange tried, unsuccessfully, to resolve the disputes with the authority, the main of which is the failure to implement the reform in turning the stock exchange into a competitive business entity, while piling unreasonable obstacles on its activity in contradiction to the legislator’s intention.
Among other things, it is claimed in the petition that the Authority is acting without authority in its demand to approve the exchange rates for privileges to use stock and bond indices that it compiles. It is also claimed in the petition that the Authority refrains from making decisions on the issue, while its actions are tainted by a series of administrative flaws.
The result, according to the stock exchange’s petition, is an impairment of its ability to operate as a business and competitive entity as a center for raising capital for companies in Israel, according to the latest financial standards. This harms the stock market as well as the stakeholders in its activity and even the public as a whole.
The fight between the two has been going on for two years and originates from the reform that was made in 2017 and was designed to deal with the ongoing decline in trading on the Tel Aviv Stock Exchange. As part of the reform, it was decided on a structural change in the ownership of the stock exchange and it was determined that it will henceforth operate as a business-competitive body, most of the holdings in which are in the hands of the public.
According to the exchange, “despite the legislator’s intention in the reform, the Authority does not comply with the new regulation model and with the exchange’s transformation into a competitive business entity, and it is piling up unreasonable obstacles” and adds that “such price control harms the development of the index market in Israel and the exchange’s ability to operate competitively, and there is no He has every justification.”
The High Court ordered the Securities Authority to respond within two months, until November 2.
The Securities Authority responded that “the Authority acts according to the powers granted to it by law for the protection of the investing public. The stock exchange’s request to raise rates is regularly reviewed by the Authority and will continue to do so.”