Israel Securities Authority and Stock Exchange Explore Extended Trading Hours

The Israel Securities Authority and the Tel Aviv Stock Exchange announced Tuesday the formation of two joint working groups tasked with examining the expansion of trading hours in Israel, including the implementation of an 'After Hours' trading phase, and the adoption of tokenization for securities. Both initiatives are designated as strategic projects for 2027, though currently, they are under review with no set launch dates or decisions made regarding their implementation.

The first working group will explore a framework for trading between 5:30 PM and 11:00 PM, following the regular trading day. Initially, this will focus on stocks and bonds, including dual-listed stocks and exchange-traded funds tracking international indices. These securities may be influenced by company reports, macroeconomic data, and trading on global markets, particularly the U.S. market, after the Tel Aviv exchange closes. The proposed model suggests a separate, dedicated trading environment that would commence as close as possible to the end of the regular session. Future considerations include expanding trading to additional financial instruments, such as derivatives.

The second group will focus on tokenization, which involves representing a security or its associated rights as a secure digital record, or token, on a blockchain-based infrastructure. According to the Securities Authority and the Stock Exchange, the underlying assets and investor rights will remain unchanged, as will disclosure, oversight, and investor protection rules. The primary change would be in the infrastructure used for registering, issuing, trading, and settling these assets. Potential benefits highlighted include faster and more secure clearing through atomic transfer of assets and payments, the use of smart contracts for automating corporate events and interest payments, and the opening of new distribution channels.