Finance Minister Moshe Kahlon and the Director of the Tel Aviv Stock Exchange are planning to establish an alternative stock exchange that will cater to the needs of small and medium businesses. An inter-ministerial committee made up of representatives of the Finance, Justice and Economy Ministries, as well as officials of the TASE, will be meeting in the coming weeks to iron out details of the new exchange, TheMarker reported.
The two have been discussing the need for new methods to stimulate the economy, and have come to the conclusion that strengthening small and medium businesses is an efficient way to do that, the report said. Among the difficulties small and medium businesses have is difficulty accessing credit and limited markets. By enabling such businesses to raise money on a stock exchange, the two hope to bolster their ability to access funds.
One of the concerns with the plan is the generally high regulatory costs involved in public administration of a stock exchange. Such exchanges require a regulatory infrastructure and compliance with regulatory requirements, which could require small and medium businesses to incur extra expenses in hiring costs. Part of the plan will entail devising methods to lower those costs and regulatory requirements, the report said.
Treasury officials quoted in the report said that the establishment of a second stock exchange could have a positive influence on the business climate in general. In recent years, few new companies have registered to sell shares on the TASE, preferring stock exchanges in New York and London. By establishing an exchange for small and medium businesses, the economic activity surrounding investments could prompt more interest in the “big business” TASE.