TASE Derivatives Clearing House

The TASE Derivatives Clearing House, formally the Derivatives (MAOF) Clearing House Ltd. or MAOF-CH, is a subsidiary of the Tel Aviv Stock Exchange responsible for exchange-traded derivatives in Israel. It issues options and futures traded on TASE, clears and settles transactions in those contracts, and oversees their exercise according to contract terms. It also acts as the central counterparty in derivatives clearing, interposing itself between the parties to cleared trades. ^[1]

Institutional role

MAOF-CH is part of the TASE group, but it is distinct from the Tel Aviv Stock Exchange Clearing House Ltd. (TASECH). TASE describes the two as separate subsidiaries with complementary clearing functions. TASECH handles clearing and settlement for listed securities other than derivatives, while the derivatives clearing house handles options and futures. This division separates the post-trade infrastructure for derivatives from the infrastructure for other securities. ^[1][2]

The term “MAOF” is used by TASE in the name of its derivatives clearing operation and in the associated rules, member information and disclosure materials. TASE’s public description assigns the clearing house responsibility for issuance, clearing and exercise of exchange-traded derivatives. This means its role encompasses more than recording completed trades: it also covers contractual processes linked to the derivatives’ terms, including settlement and exercise. ^[1]

Central-counterparty function

In a centrally cleared trade, the clearing house becomes the counterparty to each side of the transaction. Instead of the original buyer and seller relying solely on one another to perform, each faces the clearing house under the clearing arrangement. TASE identifies MAOF-CH as a central counterparty (CCP) for derivatives transactions. Central clearing can organize the performance of contracts and concentrate the management of certain counterparty risks in the clearing institution; it does not remove market risk or eliminate the possibility of loss. ^[1][3]

The CCP role makes financial risk management central to MAOF-CH’s operations. TASE’s annual report describes the clearing house as managing margins received from members in relation to their ongoing activity and their clients’ derivatives activity, as well as a default fund established by MAOF-CH. These resources form part of the financial safeguards supporting the clearing process. Exact margin requirements and fund arrangements are governed by the applicable rules and disclosures, and can vary with the relevant products and circumstances. ^[4]

Margins are collateral intended to help cover exposures arising from a member’s positions. In broad terms, clearing arrangements use collateral and other financial resources to manage the risk that an obligation will not be met. A default fund is a pooled resource established under the clearing house’s framework to support loss management in specified circumstances. The exact order in which resources may be used, calculation methods, eligibility of collateral, and member obligations depend on the governing rules; readers should consult the current MAOF bylaws and risk disclosures for those details. TASE publishes a dedicated section for derivatives rules, margin information and risk-fund materials. ^[1][2]

Members and access

Market participants access derivatives clearing through MAOF-CH members. TASE publishes a directory identifying bank and non-bank derivatives clearing members, with contact information. The published list includes Israeli commercial banks and non-bank firms, illustrating that membership is not confined to banks. The list is an operational directory and may change over time; the exchange’s current member page is the relevant source for up-to-date names and contact details. ^[5]

Membership rules establish the terms on which firms participate in the clearing system and the obligations they owe to the clearing house and other relevant participants. More generally, TASE explains that its rules cover membership, trading and related market operations, and that changes to the rules are subject to approval by the Israel Securities Authority (ISA) and, in the process it describes, notification to the Minister of Finance. TASE cautions that its English-language regulatory guides are translations and may not reflect every amendment; where the English version differs from the Hebrew, the Hebrew text prevails. ^[2]

The membership structure is important for customers because exchange trading and clearing are institutionally linked but are not necessarily performed by the same firm in every customer relationship. The clearing house’s direct members participate in the clearing framework, while individual market participants generally deal through intermediaries according to the relevant market arrangements. Specific access arrangements, customer protections and responsibilities should be determined from applicable member rules and account agreements rather than inferred from the general description of the CCP. ^[2][5]

Products and lifecycle of a derivatives trade

MAOF-CH’s stated scope covers options and futures traded on TASE. A derivatives contract derives its value from an underlying asset, rate or index and sets out contractual rights and obligations. TASE’s investor education material describes derivatives activity on the exchange as part of its broader securities market. Product specifications, including the underlying reference, contract size, expiry, settlement method and exercise conditions, are established in the relevant contract terms and exchange rules. ^[1][6]

The clearing lifecycle begins after a derivatives transaction is executed on TASE. The trade is brought into the clearing framework, obligations are calculated under the contract and applicable rules, and the clearing house manages the associated collateral and settlement processes. At expiry or when exercise is otherwise applicable, the clearing house processes the contract in accordance with its terms. TASE states explicitly that MAOF-CH is responsible for clearing derivatives traded on TASE and for their exercise. This description does not imply that every contract is physically delivered: the settlement method depends on the product’s specifications. ^[1]

Regulation and financial-market standards

MAOF-CH operates within a regulatory framework overseen by the ISA. TASE’s disclosure page states that the ISA adopted the core principles for financial market infrastructures developed by the Committee on Payments and Market Infrastructures and the International Organization of Securities Commissions (CPMI-IOSCO), and established provisions intended to support the proper operation and financial stability of the clearing houses. TASE further reports that, on June 29, 2017, the ISA announced that MAOF-CH could be regarded as acting in accordance with those core principles. ^[3]

The CPMI-IOSCO Principles for Financial Market Infrastructures (PFMI) provide a framework for assessing important financial-market infrastructures, including CCPs. TASE says MAOF-CH publishes qualitative self-assessments and quantitative disclosures under the relevant frameworks. It reports that the clearing house began self-assessments in 2017 and has conducted them every two years since then. TASE’s disclosure page lists a 2025 self-assessment and quantitative disclosures dated June 30, 2026. These disclosures are intended to make information about governance, risk management and other infrastructure arrangements available to the public; they are not a guarantee against disruption or losses. ^[3]

TASE also maintains a dedicated regulatory section for derivatives (MAOF) rules and board resolutions. The exchange warns that the English translations of its rules are not binding and that amendments may not yet be incorporated into published guides. Accordingly, the applicable Hebrew bylaws and formal rule documents are the authoritative references for detailed legal obligations. ^[2]

Relationship to other Israeli market infrastructure

The derivatives clearing house is one part of Israel’s exchange-based financial infrastructure. TASE provides the trading venue, while MAOF-CH provides the derivatives-specific clearing and settlement framework. TASECH performs separate clearing and custody functions for securities and other services. The institutional distinction matters when describing a transaction: not all TASE trades are cleared by the same subsidiary, and the derivatives house should not be conflated with the securities clearing house. ^[1][2]

The ISA supervises the relevant clearing infrastructure as part of its broader oversight of the exchange and clearing activity. TASE’s account of the PFMI framework emphasizes operational and financial stability as objectives of the rules and disclosure regime. Such oversight and risk controls are designed to support orderly infrastructure; they do not mean that a clearing house guarantees the value of derivatives or insulates participants from changes in market prices. ^[3]

Public information and scope

TASE’s public materials provide several distinct sources of information about MAOF-CH: a general description of its role, a derivatives-member directory, rule and board-resolution materials, margin information, risk-fund materials and CPMI-IOSCO disclosures. Together, these describe the institution’s formal responsibilities, participants and risk framework. Because member lists, rules, parameters and quantitative disclosures can be updated, current operational details should be checked against TASE’s relevant publication rather than treated as permanent facts. ^[1][3][2][5]

The name “TASE Derivatives Clearing House” is therefore best understood as a reference to MAOF-CH, the TASE subsidiary dedicated to listed options and futures. Its defining functions are to issue the derivatives traded on the exchange, act as CCP, manage clearing-related obligations and resources, and process settlement and exercise in accordance with the contracts and governing rules. ^[1][4]