ISA permits Leveraged Trading on Stock Exchange in Israel


ISA permits leveraged trading on stock exchange in Israel, thus opening up derivatives trading market to retail investors. The leveraged trading will be available only to the 35 largest stocks on the exchange. 

14 August, AtoZ Markets Reportedly, the Israeli Securities Agency (ISA) has approved the leveraged trading on the local stock exchange. Some of the local news outlets have been reporting that Israelis will be able to bet on CFDs at leverage levels of up to 20:1 and Forex up to 100:1.

ISA permits Leveraged Trading on Stock Exchange in Israel

In fact, leveraged trading in Israel has not been regulated before this February. However, the reports note that there are around 10,000 Israelis that are active in the CFDs market, while the monthly trading volume stands at 1.5 billion NIS ($404.5 million).

The ISA has approved CFD trading on the TA-35 stock market earlier this February. Leveraged trading in Israel opens up derivatives trading market to retail investors. Some of the industry insiders state that high leverage will allow the stock exchange to appear in the same line as its counterparts, thus increasing its turnover. The turnover of the Tel Aviv stock exchange has been standing on average of NIS 800 million per day ($215 million).

Under the new directive from the ISA, the exchange will have to cover the half of the turnover of a leveraged investment. Additionally, the leveraged trading will be available only to the 35 largest stocks on the exchange. This is due to the fact that authority is concerned about the possible manipulation of smaller shares. 

In addition, investors will not be able to go into the negative balance, while the companies will not be allowed to promote some specific products or offer bonuses. 

ISA Broker-Dealer Rules

Following on this, online reports state that the ISA has issued a draft of regulations for broker-dealers in Israel. The regulator reportedly states that the key aim of the bill is to boost the investor protection by lowering the risks associated with an investment. The authority plans to increase the public confidence and the stability of the market. It is known that ISA intends to bring all the relevant companies under its jurisdiction.

Anat Guetta, the ISA chairwoman, has been quoted as saying:

“The bill is intended to provide protection to the investing public through financial intermediaries and to contribute to the design of a fair and competitive market.”

Bill also looks into promoting competition between companies for the benefit of investors. Specifically, brokers will need to comply with the corporate governance rules, according to online reports. There are also new obligations concerning customer care, involving the rules for possible conflicts of interest resolution and freedom of data requirements.

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