Tel-Aviv Stock Exchange Moves to Expand Crypto Trading to Non-Banking Clients

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(Kitco News) – The Tel-Aviv Stock Exchange (TASE) is looking to expand its crypto trading services by allowing customers of its non-banking members (NBM) to access its crypto desk, according to a announcement the exchange on Monday.

TASE, which operates Israel’s only public stock trading platform, currently allows non-banking financial institutions – which are defined as financial institutions that do not have a full banking license and cannot accept deposits from the public – to offer services such as investment, advisory, brokerage or cashing checks.

The proposal to change the rules is now open for a public comment period, and once the comment period has ended, it will be submitted to TASE’s board of directors for approval, the announcement said.

According to TASE, the crypto market turmoil in 2022 has highlighted the need for industry regulation “that will mitigate the various risks (operational, legal, cyber and others) inherent in cryptocurrency activity.”

The rapid development of the cryptocurrency sector in recent years has led to increased engagement from TASE customers, resulting in a “growing demand from customers to transfer funds derived from this activity to their accounts,” the exchange said.

The newly proposed structure will allow customers to deposit fiat money that can be earmarked for investments in cryptocurrencies and withdraw money originating from those currencies through a “licensed cryptocurrency trading service provider, or a licensed cryptocurrency custodian service provider.” those currencies”.

Under the proposed structure, customers will deposit money for buying crypto into their account with the NBM, and that money will then be deposited into an omnibus account of the NBM with the crypto trading service provider. Customers can then submit buy orders, which are executed using the funds deposited in the omnibus account and recorded in the customer’s account with the NBM.

When the customer submits a sell order, the trading service provider will sell the coins and credit the NBM’s omnibus account, after which the proceeds of the sale will be transferred to the customer’s account with the NBM.

Ultimately, regulators in Israel want to apply a similar regulatory regime to digital assets as is currently applied to non-digital assets, the release said, “taking into account the non-traditional and unique characteristics of this sector.”

For TASE, the purpose of proposing this update is to advance Israel’s capital markets in line with international standards, enhance the ability of NBMs to expand their business and enable their clients to trade cryptocurrency.

TASE believes that aligning local regulations with international regulations will attract more foreign investment and foreign investors to the Israeli market, while at the same time enabling the Israeli public to invest locally, through supervised institutions. the release. “This move will facilitate the development and advancement of Israel’s capital market and encourage innovation and competition, while addressing the risks inherent in this activity.”