Israel cabinet OKs bill to make Tel Aviv stock exchange for profit

JERUSALEM, July 3 (Reuters) - Israeli cabinet ministers on Sunday unanimously approved a bill to change the structure of the Tel Aviv Stock Exchange (TASE) to a for-profit entity.

Finance Minister Moshe Kahlon last week said he would submit the bill to a cabinet vote.

TASE’s members approved a demutualisation plan last year for Israel’s bourse, which is struggling with falling trading volumes and a declining number of listed companies.

“This is process that will bring economic growth, strengthen the stock exchange and allow it to return to its rightful place as a central engine of growth of the Israeli economy,” Kahlon said in a statement.

The move would also make Israel’s stock exchange more competitive, enable it to cooperate with foreign exchanges and end Israeli banks’ control over the exchange, he said.

The bill still needs parliamentary approval.

Under the plan, announced in 2014, member brokerages and Israeli and foreign banks including Citicorp, UBS and HSBC would become shareholders. It would also change the structure to a more modern exchange like in Western countries, where there is a separation between ownership and companies on the bourse.

Trading volumes this year have averaged 1.28 billion shekels ($333 million) a day, down from 1.45 billion in 2015 and well below 2 billion a day in 2010. The number of companies listed on the bourse has dropped by 200 over the past decade to 455.

$1 = 3.8460 shekels Reporting by Steven Scheer