JERUSALEM, April 7 The Tel Aviv Stock Exchange (TASE) must become a for-profit bourse as a means to revive trading volume that has slipped in recent years, a panel led by Israel's securities regulator said on Monday.
The TASE is currently owned by its members, mainly local and foreign investment banks.
A final report issued by an Israel Securities Authority (ISA) committee also recommended TASE introduce new financial products, such as credit default swaps, allow banks to become market makers and eliminate or lower minimum trading fees and those for trading and clearing.
"The committee recommends to TASE to take urgent action to change the ownership structure, as is accepted around the world .. to a corporation for profit, which separates as much as possible between owners and companies while minimising conflicts of interest between management of the bourse and of market players," the report said.
Volume has dropped sharply since 2010. It has recovered somewhat in the first quarter of 2014 to 1.3 billion shekels ($373 million) a day from 1.1 billion in 2012 but remains well below average daily volume of over 2 billion in 2010.
ISA Chairman Shmuel Hauser said a successful TASE is necessary as an alternative to investment in real estate.
"Turning the stock market into a generator of growth must be a national project," he said, adding the market needs to become more modern and innovative.
A row between TASE's management and the ISA over how to boost trade forced the exchange's chief executive and chairman to announce their resignations last July.
Since then, the bourse has named Yossi Beinart - the former head of the North American Derivatives Exchange - as CEO, and Amnon Neubach as chairman.
($1 = 3.4818 Israeli Shekels) (Reporting by Steven Scheer)