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Tel-Aviv Stock Exchange moves to expand crypto trading to nonbank customers
(Kitco News) - The Tel-Aviv Stock Exchange (TASE) is looking to expand its crypto trading services by allowing customers of its nonbanking members (NBM) to access its crypto desk, according to an announcement the exchange made on Monday.
TASE, which operates Israel’s only public equity trading platform, currently allows nonbanking financial institutions – which are defined as financial institutions that do not have a full banking license and cannot accept deposits from the public – to provide services like investments, consulting, brokering or cashing checks.
The proposal to change its rules has now been opened for a period of public comment, and once the comment period ends, it will be submitted for approval by TASE’s board of directors, the announcement said.
According to TASE, the turmoil experienced by the crypto market in 2022 has highlighted the need for regulation in the sector “that will mitigate the various risks (operational, legal, cyber and other) that are inherent in cryptocurrency activity.”
The rapid development of the cryptocurrency sector in recent years has led to an increase in involvement by TASE customers, resulting in a “growing demand from customers to transfer money originating in this activity into their accounts,” the exchange said.
The newly proposed structure will enable customers to deposit fiat money that can be designated for investment into cryptocurrencies and withdraw monies originating from those currencies via a “licensed provider of cryptocurrency trading services, or a licensed provider of custodial services for those currencies.”
Under the proposed structure, customers will deposit funds for purchasing crypto into their account with the NBM, and those funds will then be deposited in an omnibus account of the NBM with the provider of crypto trading services. Customers will then be able to submit buy orders, which will be conducted using the funds deposited in the omnibus account and will be recorded in the customer’s account with the NBM.
When the customer submits an order to sell, the trading service provider will sell the coins and credit the NBM's omnibus account, at which point the proceeds of the sale will be transferred into the customer’s account with the NBM.
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Tel Aviv Stock Exchange to develop a platform for trading digital assets |
Ultimately, regulators in Israel are looking to apply a similar regulatory regime to digital assets as is currently applied to non-digital assets, the release said, “taking into consideration the non-traditional and unique characteristics of this sector.”
For TASE, the purpose of proposing this update is to help advance Israeli capital markets in line with international standards, increase the ability of NBMs to expand their areas of activity and enable their customers to trade in cryptocurrency.
“TASE believes that the alignment of local regulation with international regulation will attract more foreign investments and foreign investors into the Israeli market, while at the same time will enable the Israeli public to invest locally, through supervised institutions,” the release said. “This move will facilitate the development and advancement of the Israeli capital market and encourage innovation and competition, while addressing the risks that are inherent in this activity.”
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