Concern Over Chillul Shabbos as Tel Aviv Stock Exchange Faces Changes

A man walks past a board showing stock fluctuations at the Tel Aviv stock exchange. Photo by Moshe Shai/FLASH90
A man walks past a board showing stock fluctuations at the Tel Aviv stock exchange. (Moshe Shai/Flash90)

Legislation to privatize the Tel Aviv Stock Exchange could have an unfortunate consequence – mass chillul Shabbos due to the operation of the Exchange on Friday nights. As part of the legislation, the Securities Authority and Finance Ministry are planning to include a provision that would have the Tel Aviv Stock Exchange operate Monday through Friday, as do exchanges in most of the West, instead of the current Sunday through Thursday schedule kept by the TASE.

In response, Eli Bavli, chairman of the Mutual Fund Association, an industry group, has written TASE chairman Shmuel Hauser a letter outlining the problem. “This provision will trigger all sorts of technical challenges that will surely increase chillul Shabbos.” The mutual funds will be required to act on behalf of clients when the markets are open, and order processing could stretch into the evening on Friday, especially during short winter days, the letter said.

Bavli has also asked for help on the matter from MK Rabbi Moshe Gafni (UTJ), head of the Knesset Finance Committee, and Deputy Finance Minister Rabbi Yitzchak Cohen (Shas).

Also opposed to the move are banks, where investment departments currently work largely on a Sunday through Thursday schedule as well. Unlike at mutual funds, bank employees are generally union members, and requiring them to work Fridays instead of Sundays will require massive renegotiations of contracts, and probably no end of labor disputes as existing contracts are renegotiated. According to business daily Calcalist, the provision for a Monday through Friday work week was the idea of members of Finance Minister Moshe Kachlon’s staff, and was inserted even in the wake of the banks’ opposition.

The privatization bill – which would reduce the influence of Israeli banks on the TASE – was the idea of Kachlon himself, and is aimed at turning the Exchange into a competitive body that would offer incentives to companies in Israel and abroad to list shares there. In recent years, the TASE has limped along with a very small number of new listings – even among Israeli start-ups that go public, which generally prefer to list on the NASDAQ or one of the London exchanges. The exchanges abroad have generally undergone a privatization process, allowing them to offer better conditions on commissions, partnerships and other features to new companies that list.

The TASE has taken several half-hearted steps in this direction in recent years, but they have not been enough. Advocates of full privatization – which will entail the establishment of a corporate structure, with checks and balances and a new Board of Directors – hope that the move will help improve things.

TASE chairman Shmuel Hauser said that “the TASE is a critical asset in the Israeli financial markets. This law will turn the TASE into a competitive and efficient body that will allow for international partnerships and cooperation, turning it into a modern organization, as has been done abroad.” Shai Ba’abad, Director General of the Finance Ministry, called the law “good news for the TASE and the Israeli financial market. This will allow for the expansion of the financial markets locally and internationally, relaxing regulations and encouraging investments.”