Tel-Aviv Stock Exchange Board Of Directors Approves Principles For Market Making In Stock Options

The Tel-Aviv Stock Exchange (TASE) Board of Directors approved principles for incorporating market makers in stock option trading. Trading options on individual shares are scheduled to commence at the end of March 2009. Initially trading options on Israel Chemicals (ICL) shares will be launch, followed at a later date by options on Bank Leumi L’Israel, Bank Hapoalim and Teva Pharmaceutical Industries.

In order to improve liquidity, TASE plans to appoint up to 2 market makers, according to the following principles:

1. Market Maker obligations – Each market maker will be obligated to quote bid and ask prices on Puts and Calls options on each of the 4 shares (Teva, ICL, Leumi and Poalim), within the guidelines stipulated by the TASE Board of Directors. The Board will consider, inter alia, the series, minimal quote size, maximum spread, and the length of the commitment undertaken by the market maker during any trading day.

   In order to ensure the quality of market making operations, TASE will allow market makers substantial flexibility, by using DMA quote generators.

2. Market Maker Remuneration – TASE will reimburse market makers for all trading and clearing fees incurred within the framework of market making activities. If this reimbursement does not exceed NIS 10,000 in a given month, TASE will issue a supplemental payment, such that the market maker will receive NIS 10,000 for that month.

3. Market makers will be required to engage in market making for at least one year.

The TASE Board of Directors approved these principles, upon which a detailed proposal regarding market making in stock options will be articulated and submitted for final Board approval.