Tel Aviv Stock Exchange Clearing House

The Tel Aviv Stock Exchange Clearing House, formally Tel-Aviv Stock Exchange Clearing House Ltd. and commonly TASE-CH, is the Israeli market infrastructure that clears and settles non-derivative securities transactions connected with the Tel Aviv Stock Exchange. It also provides central securities depository services and functions as a central counterparty for eligible securities transactions.^[1][2]

Overview

TASE-CH is one of the core post-trade institutions in Israel’s capital market. Its function begins after a securities transaction has been executed on a trading venue and continues through the processes that confirm obligations, transfer securities, transfer money, and record ownership or custody positions. In practical terms, it is the infrastructure that helps convert an executed trade into final delivery of securities to the buyer and payment to the seller.

The clearing house sits within the TASE group. TASE’s 2025 annual report states that TASE-CH is a wholly owned subsidiary of Tel-Aviv Stock Exchange Ltd. and that it is engaged primarily in clearing and settlement of securities, other than derivatives, and in providing services as a central securities depository.^[1] This distinguishes it from MAOF Clearing House Ltd., another wholly owned TASE subsidiary, which is responsible for options and futures derivatives.^[1]

The institution is important because most public securities market activity depends not only on trading but also on reliable post-trade settlement. If execution creates the bargain, clearing and settlement create the enforceable completion of that bargain. TASE-CH’s role is therefore central to market confidence, operational continuity, and the reduction of counterparty risk in Israel’s exchange-traded securities market.

Legal status and ownership

TASE-CH is incorporated in Israel and operates as part of the broader TASE group. The TASE 2025 annual report records that TASE-CH was acquired by TASE in September 2006 from TASE-CH members.^[1] In the same report, TASE lists Tel-Aviv Stock Exchange Clearing House Ltd. among its subsidiaries and shows TASE’s holding of equity and voting rights in TASE-CH as 100 percent for both 2025 and 2024.^[1]

A TASE-CH disclosure prepared under the Principles for Financial Market Infrastructures states that the clearing house is a private company limited by guarantee incorporated and registered in Israel, and wholly owned by TASE.^[3] The same disclosure states that, as an Israeli registered company, TASE-CH is subject to the Companies Law, 1999.^[3]

The clearing house’s corporate position is therefore distinct from the exchange’s trading function, even though both operate within the same corporate group. This separation matters in financial-market infrastructure because the risks and controls of post-trade activities differ from those of listing, trading, market data, and index activities.

Functions

TASE-CH performs several closely related functions. First, it clears and settles securities transactions, excluding derivatives. Second, it provides central securities depository, or CSD, services.^[1] Third, for qualifying transactions it acts as a central counterparty, or CCP, meaning that it interposes itself between parties and helps ensure the completion of transactions if a clearing member defaults.^[2][2]

The Bank of Israel describes the stock-exchange clearing houses as settling all transactions made on the Tel Aviv Stock Exchange and on MTS, a trading environment for primary market-makers. It explains that the clearing houses transfer securities from seller to buyer and the monetary price from buyer to seller.^[2] The same Bank of Israel page states that, to reduce risk to buyers and sellers, the clearing house serves as a central counterparty and assumes the risk that one party will not complete its side of the transaction.^[2]

TASE’s financial statements provide additional detail on the securities covered by TASE-CH’s central-counterparty activity. They describe TASE-CH as ensuring the execution of securities transactions cleared on TASE-CH, including transactions executed on TASE other than derivatives, transfers to custody, transactions executed on MTS, and transactions in the lending pool, subject to the relevant rules and by-laws.^[1]

The clearing house is also connected to custody and registration functions. The Bank of Israel notes that the stock-exchange clearing houses provide securities escrow services in which securities are registered in the name of a stock-exchange member through a recording company.^[2] TASE’s corporate structure also includes the Tel-Aviv Stock Exchange Nominee Company Ltd., which is separate from TASE-CH and is involved in registration of securities for publicly traded or reporting corporations.^[1]

Settlement and delivery-versus-payment

Settlement is the process by which the obligations created by a securities transaction are discharged. The Bank of Israel describes the stock-exchange clearing houses’ securities settlement as occurring on the day following the transaction and states that money and securities are transferred simultaneously between buyer and seller on a delivery-versus-payment, or DvP, basis.^[2]

DvP is significant because it reduces principal risk: the risk that one party delivers the asset while the other fails to deliver payment. In a DvP arrangement, the transfer of securities and cash is coordinated so that final transfer of one side is conditional on final transfer of the other side. For a market such as Israel’s, where exchange-traded shares, bonds, funds, and government securities may involve large daily flows, the settlement design is a key element of market stability.

The cash leg of settlement links TASE-CH to the Bank of Israel. The Bank of Israel describes ZAHAV, Israel’s real-time gross settlement system, as the platform through which final settlement of interbank payment systems is carried out, including the TASE Clearinghouse, Masav, and the Checks Clearinghouse.^[4] TASE-CH’s PFMI disclosure similarly identifies the Bank of Israel as the payments system, through its RTGS system, through which monetary settlement is executed.^[3]

Membership

TASE-CH membership is composed of institutions that participate directly in its clearing and custody arrangements. TASE’s 2025 annual report states that, as of December 31, 2025, TASE-CH had 21 members: 12 banks, including the Bank of Israel, 5 non-bank members, and 4 custodial members.^[1]

The membership structure reflects the clearing house’s role as a wholesale financial-market infrastructure rather than a retail-facing entity. Investors generally interact with brokers, banks, portfolio managers, or custodians, while the clearing house interacts with its members under the clearing-house by-laws, risk controls, collateral requirements, and operational rules. A TASE web page listing TASE-CH members describes the member categories as banks, foreign banks, non-bank members, and a custodial member.^[5]

Membership is important for risk management because the default of a direct clearing member can create obligations for the clearing house and, under some arrangements, for non-defaulting members. For that reason, clearing-house membership typically involves operational, financial, reporting, and collateral requirements. TASE-CH’s PFMI disclosure emphasizes the dependence of TASE-CH members on the clearing house for the clearing of securities in which they trade and on the default fund in the event of a default.^[3]

Regulation and supervision

TASE-CH operates under a license granted by the Israel Securities Authority. Its PFMI disclosure states that it operates as a settlement system under a license from the ISA in accordance with the Securities Law, and that the law regulates matters including corporate governance, clearing-house stability, settlement finality, obligations and rights of TASE-CH and clearing members, and supervisory arrangements implemented by the ISA.^[3]

The PFMI disclosure also states that on June 29, 2017, the ISA announced that TASE-CH could be regarded as acting in accordance with the relevant core principles.^[3] In January 2023, the ISA confirmed to the European Securities and Markets Authority that TASE-CH’s rules and internal procedures complied with Israeli legal and regulatory requirements, according to the same disclosure.^[3]

On March 15, 2023, ESMA recognized TASE-CH as a Tier 1 third-country central counterparty under applicable European regulatory rules, which the TASE-CH disclosure says made the clearing house eligible to provide settlement services in EU countries for a variety of financial instruments.^[3] This recognition is relevant to cross-border market access and to the treatment of Israeli clearing arrangements by European-regulated entities.

The Bank of Israel is not the securities regulator for TASE-CH, but it is highly relevant to the clearing house’s operations because the monetary settlement leg uses the central bank’s RTGS infrastructure.^[4][3] The Bank of Israel also identifies the stock-exchange clearing houses as part of Israel’s payment and settlement system landscape.^[2]

Risk management and central counterparty role

As a central counterparty, TASE-CH is designed to reduce bilateral counterparty risk between market participants. The Bank of Israel explains that the clearing house serves as a CCP to reduce the risk that one party to a securities transaction will not complete its obligation.^[2] In this model, the clearing house’s own risk controls are critical because it becomes a focal point for default management.

TASE-CH’s PFMI disclosure identifies several tools and governance mechanisms used in risk management. It notes that TASE-CH has mechanisms for mapping and estimating risks in its engagements and activities, including an annually updated recovery plan, quarterly assessments of the risk profile, annual updates of risk appetite and related limits, and an outsourcing risk-management policy.^[3]

The disclosure also states that TASE-CH uses a default fund and that the amount of the default fund is updated quarterly and at preset dates under the clearing-house by-laws.^[3] TASE-CH requires each clearing member’s collateral for its default-fund share to be deposited in cash, and it performs daily controls to compare required collateral with cash deposited by each member.^[3]

The same PFMI disclosure states that the size of the default fund is assessed against the financial resources needed to handle the default of the clearing member with the largest aggregate exposure under extreme but plausible market conditions.^[3] It also describes the default waterfall, including use of the defaulting member’s resources, TASE-CH’s independent resources in a required amount, and then the share of other clearing members in the default fund.^[3]

Liquidity risk is addressed through links with the Bank of Israel’s payment infrastructure, liquid assets, collateral practices, and recovery planning. TASE’s 2025 annual report states that cash collateral is deposited in an account at the Bank of Israel to ensure quick and assured access and to mitigate risks associated with deposit at commercial banks, such as credit risk.^[1]

Relationship with other market infrastructures

TASE-CH is part of a larger system of Israeli market infrastructure. Its closest institutional counterpart is the Tel Aviv Stock Exchange, which provides the trading venue and owns the clearing house. Its derivative-clearing counterpart is MAOF Clearing House Ltd., a separate subsidiary within the same group. TASE’s annual report explicitly separates TASE-CH’s role in non-derivative securities from MAOF-CH’s role in options and futures.^[1]

The clearing house is also linked to the Bank of Israel through the RTGS settlement system, and to the Israel Securities Authority through licensing and supervision. Its PFMI disclosure identifies the Bank of Israel, securities depository banks, service suppliers, outsourcing providers, other financial-market infrastructure bodies, the ISA, ESMA, and a commercial bank providing a credit facility as entities relevant to TASE-CH’s interdependencies.^[3]

These links mean that TASE-CH is not an isolated operational company. It is a node in a network that includes trading venues, regulators, settlement banks, custodians, central-bank payment systems, issuers, fund managers, and clearing members. The reliability of this network affects the completion of securities transactions and the handling of stress events.

Financial significance within TASE

TASE reports clearing-house services as a major revenue category. In its 2025 annual report, TASE reported NIS 147.635 million of revenue from clearing-house services in 2025, compared with NIS 88.926 million in 2024, an increase of 66 percent.^[1] The same report attributed the increase partly to higher volumes of activity, completion of regulation of over-the-counter clearing, linkage of clearing rates to the consumer price index, and increased custodian fees due to the value of assets held in custody at TASE-CH and a higher average commission rate.^[1]

The clearing-house services line represented 26 percent of TASE’s total revenue from services in 2025, according to the same table.^[1] This indicates that post-trade services are economically material to TASE’s group business model, alongside trading and clearing commissions, listing fees and levies, and data distribution and connectivity services.

Financial significance should not be confused with investment merit. In an encyclopedic context, the revenue data show the role of clearing and custody services in TASE’s operating model and the scale of clearing-house-related services relative to the group’s other activities. They do not imply any conclusion about TASE securities or any investment decision.

Distinction from the exchange and from MAOF

The Tel Aviv Stock Exchange, TASE-CH, and MAOF-CH are related but not identical. The exchange operates the market on which securities are listed and traded. TASE-CH handles the post-trade clearing and settlement of securities other than derivatives and provides CSD services.^[1] MAOF-CH issues and clears listed derivatives, including options and futures.^[1]

This distinction is important for understanding Israeli market operations. A share transaction on TASE requires a trading system for execution, rules for trading and membership, and then a clearing and settlement infrastructure to transfer money and securities. A derivatives transaction involves a different clearing house because derivatives generate different risk exposures, including margining and daily valuation arrangements.

Importance in Israel’s capital market

TASE-CH is a critical part of Israel’s securities-market plumbing. It supports settlement finality, delivery-versus-payment transfer, central-counterparty risk reduction, custody and depository services, and default management for securities market transactions. Its importance is therefore structural rather than promotional: it is a necessary institution for the routine functioning of the exchange-traded securities market.

The clearing house also illustrates the interaction between securities regulation and central-bank payment systems. The ISA licenses and supervises the clearing house under securities-market law, while the Bank of Israel’s RTGS system supports the final cash settlement leg. This combination is typical of modern financial-market infrastructures, where legal certainty, operational resilience, liquidity access, and risk controls must operate together.

Because TASE-CH concentrates essential post-trade functions, disruptions or weaknesses could have market-wide effects. For this reason, its disclosures emphasize recovery planning, stress testing, default funds, collateral, business continuity, and interdependencies with other institutions. In Israel’s capital market, TASE-CH is therefore best understood as both an operating subsidiary of TASE and a systemically relevant post-trade infrastructure.