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TASE announced today that the incentive program to encourage Liquidity in TA-35 Index Derivatives will start on May 1, 2018. The program also been approved by the Israel Securities Authority (ISA). The new incentive program is based on widely used programs that are in operation at the world’s leading derivative exchanges and focuses on the major market participants who contribute to liquidity in TA-35 Index derivative trading.
The aim of the program, which was drawn up by TASE’s staff, is to increase the volume of trading activity in TA-35 Index derivatives. The program is based on the Revenue Sharing model, within the framework of which, market participants will participate in a share of the increase in TASE revenues resulting from increase in the turnover of such derivative trading.
The incentive program was drawn up in view of the strong competition from foreign exchanges, a large proportion of which operate a variety of incentive programs. The TA-35 Index derivatives are a success, not only locally but on an international scale as well: the TA-35 Index options were ranked seventh in the world based on trading volume in equity index options (according to the World Federation of Exchanges’ 2016 data). The proposed program will strengthen the attractiveness of the Israeli derivatives market.
Main points of the program:
- The program participants will be entitled to a payment at a rate of 30% of the increase in TASE’s revenues from trading in TA-35 Index derivatives. In other words, should TASE’s revenues increase as a result of a rise in the trading volume compared to the current volume, 30% of such increase will be shared among the program’s participants.
- Every participant wishing to join the program will have to register for it through the TASE member with whom it conducts its TASE derivative activity.
- The program does not impose any quoting obligations on its participants.
- The program will be open to any market participant that meets the threshold terms: a minimum average daily volume in options. The payment will be transferred each month to the participants complying with the threshold terms for receipt of the payment, in the month for which the payment is being paid. The threshold terms will be published in April.
- New participants will be able to join the program on an ongoing basis, on the dates detailed in the proposal.
- Program duration – one year with TASE having the option to extend this period.
