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The Tel Aviv Stock Exchange (TASE) published (November 7, 2018) a proposal for comments by the public for changing the trading timetable, which includes the following changes: the end of trading on Sundays at 14:30 instead of 16:30 today; the opening of the trading day at a later time than at present, on all days of the week, and to consolidate the opening auction timetable for all securities.
The TASE believes that these changes will lead to savings in the costs of TASE members and market participants due to the reduction in trading hours, without any decrease in the trading volumes. The proposed change will enable TASE members and other market participants to take advantage of the time available, among other things, for research, business development, strengthening ties with customers and handling computer infrastructures. In addition, the move will enable the TASE to align itself with the opening of the trading day on the leading stock exchanges in Europe.
Today, trading in securities on TASE, from the moment it is opened to receive orders in the pre-opening stage and until the time for closing trading after calculating closing prices, reaches 41.5 hours per week. The proposed changes will lead to a decrease of approximately 4.5 trading hours per week, without any harm being expected to trading volumes: the trading day will open 30 minutes later than the current situation, which will lead to a reduction of about 2.5 hours of trading per week. In addition, on Sundays, trading will end two hours earlier than today, which will result in a reduction of 2 additional trading hours per week.
An examination of the trading timetables of major stock exchanges around the world disclosed that there are exchanges in which all markets are opened at the same time, without a separation between the stock market and the bond market. In addition, the examination indicated that the pre-opening stage on stock exchanges abroad is usually shorter than that of TASE.
Another finding of the examination is that the Stock Market's trading volumes on Mondays through Thursdays is 2.5 times higher than that on Sundays, and there has been a significant decline in the share of trading on Sundays compared with Mondays through Thursdays. On Mondays through Thursdays there is a 150% increase in the volume of trading in shares during the last trading hour (16:30 to 17:30) compared with the rest of the day. The increase in trading volume is attributed mainly to the overlap with trading in the US and is reflected mainly in dual-listed shares. It should be emphasized that such an increase was not observed on Sundays.
In light of this, TASE requests that the following changes be made in the trading hours:
To change the closing time of trading on Sundays so that the closing auction will take place at a random time between 14:24 and 14:25, i.e. a shortening of two hours compared to the end of the current trading day on Sundays and a shortening of 3 hours compared to Mondays through Thursdays.
To shorten to 30 minutes the pre-opening phase in the Stock Market (in the bond, T-bill and institutional markets, the pre-opening stage is already 30 minutes now) and to consolidate the opening timetable for all the securities to coincide with the opening of trading hours on European exchanges, as follows: The pre-opening stage in all securities, excluding derivatives, will begin daily at 9:30, instead of 9:00, as of today. The opening trading stage, in all securities other than derivatives, will take place at a random time between 10:00 and 10:01 and will coincide with the time of opening on exchanges in Europe.
With regard to trading in derivatives, in view of the proposal to change the closing time of trading in securities on Sundays, it is proposed to end trading in derivatives on Sundays at 14:35 (about 10 minutes after the end of trading in securities, as currently exists in relation to each trading day). In derivatives as well, the proposed reduction is two hours in relation to the end of the current trading day in derivatives on Sundays. In addition, since it is proposed to postpone the opening of trading in shares from 9:45 am to 10:00 am, it is proposed to postpone the start of trading in derivatives by 15 minutes, i.e. at 9:45.
The public are invited to submit their comments on the proposal on TASE website by November 28, 2018. Afterwards, and taking into consideration the comments received, the proposal will be submitted to the Board of Directors of TASE.
