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The Tel-Aviv Stock Exchange (TASE: TASE) published today a draft for public comments concerning an update to the criteria for the inclusion of seasoned shares in the TASE indices.
The modifications are intended to prevent the entry of shares into the TASE indices without appropriate qualification periods, despite the occurrence of significant events in the companies.
The new Criteria only applies to seasoned shares that are not included in the TASE indices. It does not apply to shares that are listed on TASE in an IPO or under dual listing, nor does it apply to listed shares that are included in the TASE indices.
The proposed resolution is as follows:
A company reinstated from the maintenance list to the main list - 180 days
According to the current guidelines of the TASE Rules, a share listed for the first time may only be included in then Tamar Universe at the end of a 30-day qualification period commencing on the date of its listing. The qualification period is meant to ensure that the share is only included in the indices after it has been traded for some time and has attained stability. Nevertheless, the guidelines do not stipulate such qualification period for a share that is reinstated to the main list after being traded on the maintenance list, which will therefore qualify for inclusion in the TASE indices immediately upon its reinstatement to the main list. Since the transfer from trading on the maintenance list back to the main list is a significant event, the TASE staff believes that, in this case too, the trading in the reinstated share should be examined over a time period, which the Staff proposes be set at 180 days from the resuming of trading on the main list.
Drastic changes in the listed capital of a company - 180 days
Since a substantial change in capital over a short time frame may be indicative of material changes in the company itself, such as a large-scale allotment against the infusion of a new operation etc., where the listed capital of a seasoned share is doubled other than under an IPO, a sufficiently long qualification period would be required prior to allowing the inclusion of such company in the indices.
TASE proposes that, a seasoned share that is not part of the Tamar Universe, where the company's listed capital has increased by at least 100% during the 180 days preceding the record date - will not be included in the Tamar Universe, unless decided otherwise by the Indices Committee.
SPAC - 90 days
For a share being listed following a merger with a foreign SPAC, it is proposed that such share will only be included in the universes at the end of 90 days from the date of absorbing the business operation by the SPAC.
It is hereby stressed that, should the SPAC apply for dual listing prior to absorbing the operation, TASE will not allow the inclusion of its share in the universes pending the absorption of the operation.
TASE notes that, to the extent that the listing of Israeli SPAC's is made possible, they would be subject to similar provisions.
Fast track entrance for seasoned shares - exclusively into the Rimon Universe
In addition to the semi-annual updating of the universes, every month, on the record date for the updating of the parameters (monthly rebalance), TASE examines all of the shares that are not included in the universes (the expanded Tamar Universe and the limited Rimon Universe). A share that is not included in the universes which, on the record date for monthly rebalance meets the threshold criteria of one of the universes, as appropriate, will be added to the respective universe on the date of the monthly rebalance (“fast track entrance").
The TASE staff believes that the volume of shares joining by fast-track entrance is too extensive and therefore proposes that the fast-track entrance for seasoned shares be limited to shares that meet the criteria of the Rimon Universe (which has more stringent threshold criteria and includes about 230 of the 350 shares included in the expanded Tamar Universe).
