TASE Trading Guide. Regulations to The Third Part of the Rules

Transcription

1 TASE Tradng Gude Regulatons to The Thrd Part of the Rules Ths s not an offcal translaton and has no bndng force. Whlst reasonable care and skll have been exercsed n the preparaton hereof, no translaton can ever perfectly reflect the orgnal. In the event of any dscrepancy between the orgnal Hebrew and ths translaton, the Hebrew alone wll preval. The reader s therefore warned to take proper professonal advce before actng further hereto, as nether The Tel-Avv Stock Exchange Ltd. nor the translators assume any lablty for accuracy hereof.

2 2 TABLE OF CONTENTS REGULATIONS Chapter 1: Chapter 2: Chapter 3: Chapter 4: Chapter 5: Chapter 6: Chapter 7: Chapter 8: Chapter 9: Chapter 10: Chapter 11: Chapter 12: Chapter 13: TRADING HOURS THE TRADING UNIT OF A SECURITY CALCULATION OF PRICES PRICE FLUCTUATIONS TRADING IN SECURITIES, EXCLUSIVE OF DERIVATIVES TRADING IN DERIVATIVES SHORT SALES CONDITIONS AND PROCEDURES FOR MEMBERS' OFF-EXCHANGE TRANSACTIONS TEMPORARY HALT IN TRADING PUBLICATION OF TRADING DATA CANCELLATION OF TRANSACTIONS, DUE TO TECHNICAL MALFUNCTION OR TECHNICAL ERROR MARKET MAKERS INSTITUTIONAL SECURITIES

3 3 1. TRADING SCHEDULE CHAPTER ONE: TRADING HOURS The schedule for tradng shall be as follows : A. For shares and securtes convertble nto shares: 1) The pre-openng phase shall begn at a tme to be set by the Board of Drectors between 8 AM and 9 AM, and t shall end for each securty when ts openng tradng phase begns. 2) The openng tradng phase shall begn at a tme to be set by the Board of Drectors between 9:30 AM and 12:00 AM; the Board of Drectors may set dfferent tmes for dfferent securtes. Notwthstandng the aforesad, n the event of a sharp fluctuaton n the theoretcal TA-25 ndex, whch shall be calculated mmedately before openng tradng n the frst securty for whch openng tradng s held on that tradng day (hereafter: "the last theoretcal TA-25 ndex"), or f the rate of change n the last theoretcal prce of a share ncluded n the TA-25 ndex s hgher than the statc threshold, wthn ts meanng n Chapter Fve of the Regulatons to the Thrd Part of the Rules, the openng tradng phase shall be postponed, as specfed n Chapter Fve of the Regulatons to the thrd part of the rules. The openng tradng phase for each securty shall end when ts openng prce s determned. 3) The contnuous tradng phase for each of the securtes shall begn when the openng prce for that securty has been determned, and t shall end at the begnnng of ts pre close phase. 4) The pre close phase shall begn at the tme that the Board of Drectors shall set, whch shall be between 3 PM and 6:10 PM, and whch shall end for each securty at the begnnng of ts closng tradng phase. Notwthstandng the aforesad, n respect of a securty ncluded n the llqud lst, wthn ts meanng n Chapter Fve below, and n respect of a securty ncluded n the mantenance lst, wthn ts meanng n subsecton 1. In Chapter four of the Regulatons, the pre-closng tradng phase of the securty shall begn when ts openng prce s set, and t shall end at the begnnng of ts closng tradng phase. 5) The closng tradng phase shall begn at the tme to be set by the Board of Drectors, whch shall be between 3:10 PM and 6:10 PM. The closng tradng phase of each securty shall end when ts closng prce s determned The Decsons of the Board of Drectors on the schedule for tradng are specfed n the Chapter "Decsons of the Board of Drectors" n ths gudebook.

4 4 B. In respect of bonds, bond opton certfcates. M.K.M., commercal securtes and nsttutonal securtes 1) The pre-openng phase shall begn at a tme to be set by the Board of Drectors, whch shall be between 8 AM and 10 AM, and whch shall end for each securty when ts openng tradng phase begns. 2) The openng tradng phase shall begn at a tme to be set by the Board of Drectors between 9:30 AM and 11:30 AM and t shall end for each securty when ts openng prce s determned. 3) The contnuous tradng phase for each of the securtes shall begn when the openng prce for that securty has been determned, and t shall end at the begnnng of ts pre-closng phase. 4) The pre-closng phase shall begn for each securty shall begn at a tme to be set by the Board of Drectors, whch shall be between 3 PM and 6:10 PM, and whch shall end for each securty when ts closng tradng phase begns. 5) The closng tradng phase shall begn at a tme to be set by the Board of Drectors, whch shall be between 3:10 PM and 6:10 PM. The closng tradng phase for each securty shall end when ts closng prce has been determned. C. For dervatves: Tradng shall begn at a tme to be set by the Board of Drectors, whch shall be between 9 AM and 10 AM and t shall end at a tme to be set by the Board of Drectors between 4 PM and 6:30 PM D. Tradng hours n Passover and Sukkot: 1) In respect of shares and securtes convertble nto shares the contnuous tradng phase shall end and the pre-closng phase shall begn at a tme to be set by the Board of Drectors, whch shall be between 1:30 PM and 2:30 PM, and closng tradng phase shall begn at a tme to be set by the Board of Drectors, whch shall be between 1:40 PM and 2:45 PM; 2) In respect of bonds, bond opton certfcates, M.K.M., commercal securtes and nsttutonal securtes the contnuous tradng phase shall end and the preclosng phase shall begn at a tme to be set by the Board of Drectors, whch shall be between 1:20 and 2:20 PM, and the closng tradng phase shall begn at a tme to be set by the Board of Drectors, whch shall be between 1:40 and 2:45 PM 3) Tradng n dervatves shall end at a tme to be set by the Board of Drectors, whch shall be between 1:45 and 2:45 PM.

5 5 2. A. Notwthstandng the provsons of the above secton 1, when one of the events specfed below occurs the General Manager of the Stock Exchange or a person authorzed by hm may prescrbe schedules that dffer from the schedules sad n secton 1, and that ether n respect of a sngle securty or n respect of a group of securtes: 1) There was or there s expected to be a large volume of tradng n a securty. 2) An error occurred, ether on the part of a member or on the part of the Stock Exchange, n the transmsson of orders to the Stock Exchange or n ther recepton there. 3) A fault occurred n communcatons between a member and the Stock Exchange, n consequence of whch an order or group of orders was not receved. 4) A fault occurred n consequence of whch an error may occur n tradng. 5) A substantve event occurred, n consequence of whch the openng of tradng was postponed or tradng was nterrupted. 6) An event occurred, n consequence of whch t s feared that t wll not be possble to conduct tradng accordng to the schedule sad n secton 1. 7) An event s expected to occur, n consequence of whch t s feared that t wll not be possble to conduct tradng accordng to the schedule sad n secton 1. B. 1) If, n accordance wth subsecton A. above, a tmetable dfferent from that set n secton 1 s determned for a sngle securty, then trade n t shall end no later than at the tme set therefore n secton 1 above. 2) If, n accordance wth subsecton A., a tmetable dfferent from that set n secton 1 s determned for a group of securtes, then tradng n them shall end no later than at 7:00 PM. C. If a schedule dfferent from that prescrbed n secton 1 has been determned under the above subsecton a., notce thereof shall be gven to the Stock Exchange members. 3. If tradng was halted by a fluctuaton of 8% n the TA-25 ndex, then the Managng Drector of the Exchange may change the tmetable and extend the tme for tradng. 4. Repealed 5. Frst tradng day n securtes The Stock Exchange shall publsh a notce about the frst tradng day n a securty untl 2:30 PM of any day that s a tradng day. When a sad notce has been publshed, the frst tradng day of that securty shall be on the next tradng day after the tradng day on wth the notce by the Stock Exchange was publshed.

6 6. Last tradng day n securtes B - 6 The last tradng day for the followng securtes shall take place at the tme specfed below: A. Convertble securtes 1. Opton certfcates - three tradng days before the last day of exercsng. 2. Convertble bonds and opton warrant certfcates three tradng days before the last day of exercsng or a day before the exercse date, respectvely. 3. Notwthstandng the aforesad, f - on the last tradng day of an opton certfcate, convertble bonds or opton warrant certfcates - there was a temporary halt n tradng the securty whch contnued more than 45 mnutes and at the end of whch tradng n the securty was not resumed on that tradng day, then the last tradng day of that securty shall be postponed to the next tradng day. A notce shall be publshed about the postponement of the last tradng day. 4. If the last tradng day was postponed as sad n subsecton 3. above and f on the next tradng day there agan s a temporary halt n tradng the securty and t lasts longer than 45 mnutes, and f after t ended tradng n that securty was not resumed on that tradng day, the last tradng day shall not agan be postponed. B. Corporate Bonds 1. Three tradng days before the orgnal day of redempton. 2. Notwthstandng the provsons of subsecton 1. Above, for corporate bonds on whch apply the tax laws of the Unted States ffteen days before the orgnal day of redempton. However, f ths day s not a tradng day, t's the prevous tradng day. 3. Notwthstandng the provsons of subsecton 1. above, f the prospectus of a corporate debenture prescrbed a record date for enttlement to fnal redempton, then the last tradng day shall be as sad n subsecton 1. above or three tradng days before the record date for enttlement to fnal redempton, whchever s earler. C. Government Bonds 1. If the regulatons, accordng to whch a Government bond was ssued, do not set a record date for enttlement to fnal redempton three tradng days before the day of redempton. 2. If the regulatons, accordng to whch a Government bond was ssued, do set a record date for enttlement to fnal redempton three tradng days before the record date for enttlement to redempton. D. M.K.M. three tradng days before the day of redempton.

7 E. Commercal securtes - three tradng days before the day of redempton. B - 7 F. ETN's 1) Index certfcates, currency certfcates, merchandse certfcates and complex certfcates a. ffteen days before the day of redempton; however, f that s not a tradng day the tradng day that precedes t. b. notwthstandng the provsons of subsecton a) above, f a record date for redempton was set for a basket certfcate, then the last tradng day shall be as sad n subsecton a) above or three tradng days before the date set for redempton whchever s earler. 2) Reverse certfcates three tradng days before the record date for redempton. 3) Covered warrants the tradng day before the day of expraton. 7. Tradng not held because of a company event A. 1) There shall be no tradng n a company's shares and securtes convertble nto shares on the Ex-date because of one of the company events specfed below (hereafter n ths secton: "company event"), provded that the Ex-date does not come after the determnng date and that one or more of the condtons specfed n subsecton 2) below apples: A rghts offerng; A dvdend dstrbuton n cash; A dvdend dstrbuton n knd; A company splt; 2) And these are the condtons: a) Adjustments that because of the company event must be made n the condtons for the converson of convertble securtes nto the company's shares are based on the closng prce of the company's share on the record date. b) The company has securtes convertble nto shares, whch are lsted for tradng, and accordng to ther condtons there s nothng that s due to each of the company events that prevents ther converson on the ex-date. c) To the extent that the case s one of a dvdend n cash, of a dvdend n knd or of a company splt the company has securtes convertble nto shares that are not lsted for tradng and accordng to ther condtons there s nothng that s due to the company event that prevents ther converson on the ex-date, and the company announced the dstrbuton of a dvdend n cash, of a dvdend n knd or of a company splt n a fxed total amount or for a fxed total number of shares, as the case may be.

8 8 3) a) If tradng dd not take place because of a company event, as sad n the above secton 7.a.1), the ex-day shall be postponed to the next tradng day sad n secton 7. Ths shall not apply agan on the postponed ex day. b) The provsons of the above subsecton 3)a) shall also apply f tradng n shares was suspended on the determnng day because of any other reason whatsoever. B. 1) Tradng n a company's shares and securtes convertble nto shares shall not be held on the ex-day, due to any one of the company events that are specfed below, on condton that the ex-day does not come after the determnng day: Unfcaton of captal; - Reducton of captal. 2) a) If tradng dd not take place because of a company event, as sad n the above secton 7.b.1), the ex-day shall be postponed to the next tradng day sad n secton 7. Ths shall not apply agan on the postponed ex day. b) The provsons of the above subsecton 2)a) shall also apply f tradng n shares was suspended on the determnng day because of any other reason whatsoever. c) Tradng n a company's securtes that are convertble nto shares shall not take place on the ex-day, because of any one of the company events specfed below, provded that the ex-day does not come after the determnng day, f the company has securtes convertble nto shares that are lsted for tradng and accordng to ther condtons there s nothng to prevent ther converson on the ex-day: A bonus share dstrbuton; A share splt; A unfcaton of categores of shares.

9 9 CHAPTER TWO: THE TRADING UNIT OF A SECURITY 1. In the followng nstances, the tradng unt shall be as specfed below: A. Cancelled. B. For bonds -1 NIS nomnal value, 1 US$ nomnal value or Euro 1 nomnal value, as the case may be. C. For opton certfcates that can be exercsed n shares or n opton certfcates - the tradng unt s a quantty of opton certfcates whch, f exercsed on the day of ther regstraton for tradng, would gve the rght to acqure one tradng unt of shares or of opton certfcates, as the case may be. D. For opton certfcates that can be exercsed n bonds or n convertble bonds - the tradng unt s a quantty of opton certfcates whch, f exercsed on the day of ther regstraton for tradng, would gve one hundred tradng unts of bonds. E. For opton certfcates that can be exercsed n more than one securty - the tradng unt s a quantty of opton certfcates, whch, f exercsed on the day of ther regstraton for tradng, would gve the rght to acqure one tradng unt of shares, or - f there s no exercse n shares - ts exercse on the day of ther regstraton for tradng would gve the rght to acqure one hundred tradng unts of bonds or of convertble bonds, or of the opton certfcate, as the case may be. F. For rghts - the tradng unt s one rght unt as appear n the ssue's prospectus. G. For dervatves - the tradng unt shall be one opton or one future, as the case may be. H. For Covered Warrants - the tradng unt shall be one covered warrant. I. For Hybrd Bonds the tradng unt shall be 50,000 NIS nomnal value. Hybrd Bonds Bonds ssued by a bankng corporaton or an nsurer can be converted nto a forced, whch was lsted to trade under Chapter twenty-two accordng to the second part of the rules. 2. Fractonal tradng Once a year, on the 25 th of December, and f that day s not a tradng day, on the tradng day thereafter, tradng shall be conducted n quanttes smaller than a tradng unt ("fractons"). The fractonal tradng shall be conducted by acceptng the member's wrtten orders, carryng them out at the closng prces of the prevous tradng day to the fractonal tradng day, and transferrng the balance to the credt or debt of the coordnatng bank. The member's orders as sad wll be receved untl December 24th by the stock exchange.

10 10 CHAPTER THREE: CALCULATION OF PRICES 1. The base prce for tradng any securty shall be the prce determned on the precedng tradng day as the closng prce, subject to the followng provsons: A. If a securty - other than the securty of a foregn company, as defned n the Stock Exchange Regulatons (Part Two) - was lsted for tradng for the frst tme, otherwse than as the result of swtchng securtes or as a result of a merger or splt of a lsted company, then no base prce shall be set on the frst tradng day; however, the contnuous tradng system shall - for operatonal purposes of tradng only - use an openng parameter, as specfed below: 1) For securtes other than dervatves - 1; 2) For dervatves - no openng parameter shall be determned and t shall be stated that the prce "has not yet been establshed". 3) For the securtes of a company lsted on a foregn Stock Exchange the last prce set for that securty on the foregn Stock Exchange, multpled by the known representatve exchange rate (n agorot) of the currency n whch tradng n conducted on the foregn Stock Exchange. B. The base prce of a securty of a company, of whch ts two knd of securtes that are lsted for tradng were combned nto one securty, shall be calculated as the weghted average of the closng prces of the securtes that were combned, accordng to the rato of each of the combned securtes to the company's captal, n accordance wth the number of shares of each of the combned securtes on the tradng day that precedes the day on whch they were combned. C. 1) The base prce on the frst tradng day of a securty s frst regstered for tradng as part of a merger process or of a spn-off process of a regstered company, shall be calculated n accordance wth the provsons of the Appendx to the Regulatons on Base Prces. 2) (a) The base prce of securty on the Ex-day shall be calculated n accordance wth the provsons of the Appendx to the Regulatons on Base Prces. (b) The base prce of a bond or a convertble bond on the Ex-day shall not be calculated n accordance wth subsecton 2) (a) above, f the tradng suspended because the company apponted a provsonal lqudator, a temporary recever or a recever. If the Stock Exchange has been notfed that the payment sn't accordng to the orgnal terms of the bond or the convertble bond, the base prce shall be calculated n accordance wth subsecton 2) (a) above. D. 1) The base prce of a securty, n whch tradng was renewed after t had been halted for not longer than three months shall be the last closng prce set for that securty.

11 11 2) In respect of a securty n whch tradng was renewed after t had been halted for longer than three months, no base prce shall be set; however, for the operatonal requrements of tradng alone, the TACT system shall use an openng parameter, as specfed for a securty when t s frst regstered for tradng otherwse than as the result of a merger process or of a spn-off process. E. In respect of the securty of a foregn company, as defned n the Stock Exchange Regulatons (Part Two), whch s lsted for tradng for the frst tme, the base prce for tradng shall be the last prce set for that securty on an Exchange abroad, multpled by the known representatve exchange rate (n agorot) of the tradng currency of the Exchange abroad. F. The base prce of a securty that was lsted for tradng for the frst tme, and replace, not as part of a merger proceedng lsted securtes ("Replaced securty") shall be equal to the closng prce of the replaced securty exchanged on the tradng day precedng the frst day of tradng of the securty for replacement. Purposes of ths secton "securty for replacement" means - a securty that all ts characterstcs are dentcal to those of the replaced securty. 2. Notwthstandng the provsons of secton 1 above, the base prce of a securty, other than a dervatve, shall not be less than one Agora per tradng unt. 3. The base prce of a securty shall be rounded off to the nearest level for the submsson of an order. 3A. A. 1) When the closng phase s concluded for a securty, the Stock Exchange shall calculate and publsh the closng prce for each securty separately, as specfed n subsecton B. below. 2) Closng prces shall be calculated one after the other for all the securtes; the order of the securtes, for calculaton of the closng prces, shall be random and t shall change every day. B. The closng prce shall be calculated as follows: 1) If the amount of transactons n the closng tradng phase reached an amount that the Board of Drectors wll prescrbe, then the closng tradng prce shall be the closng prce. The Board of Drectors may set dfferent amounts for dfferent categores or dfferent groups of securtes. 2) If the amount of transactons n the closng tradng phase dd not reach the amount determned under subsecton 3A.B.1) above, then the closng prce The Board of Drectors decded that the amount of transactons n the closng tradng phase, by categores of securtes, shall be as follows: a) for shares ncluded n the Tel Avv 25 ndex NIS 400,000; b) for shares ncluded n the Tel Avv 75 ndex NIS 200,000; c) for other shares and securtes convertble nto shares NIS 100,000; d) for bonds, bond optons, M.K.M. and commercal paper NIS 400,000

12 12 shall be calculated accordng to the weghted average of the prces of the transactons carred out n the closng tradng phase, together wth the transactons carred out wth the securty durng the last ten mnutes of the contnuous tradng phase. If the last transacton that was ncluded n the calculaton of the aforesad closng prce was a transacton that was carred out n the prce montorng aucton, wthn the meanng thereof n Chapter Fve of the Regulatons to the Thrd Part of the Rules (hereafter: "Prce Montorng aucton"), then for purposes of the calculaton only a proportonal part of the transacton shall be taken nto account, so that the cumulatve amount of transactons wll be equal to the amount prescrbed under the subsecton 3A.B.1 above). 3) If the amount of transactons n the closng tradng phase, together wth the transactons carred out wth the securty durng the last ten mnutes of the contnuous tradng phase, dd not reach the amount set under subsecton 3A.B.1) above, then the closng prce shall be calculated accordng to the weghted average of the prces of the transactons carred out n the closng tradng phase, together wth the last transactons carred out wth the securty durng the contnuous tradng phase, untl ther cumulatve amount reaches the amount set under subsecton 3A.B.1) above. For ths purpose, f, after the last transacton ncluded n the calculaton of the closng prce the amount of the sad transactons s greater than the amount specfed above, then the last transacton shall be ncluded n the calculaton of the closng prce. If the last transacton that was ncluded n the aforesad calculaton was a transacton that was carred out n prce montorng aucton, then for purposes of the calculaton only a proportonal part of the last transacton shall be taken nto account, so that the cumulatve amount of transactons wll be equal to the amount prescrbed under the subsecton 3A.B.1 above). 4) However, f the amount of transactons n the closng tradng phase, together wth the transactons carred out wth the securty durng the last thrty mnutes of the contnuous tradng phase, dd not reach the amount set under subsecton 3A.B.1) above, then the closng prce shall be calculated accordng to the weghted average of the prces of the transactons carred out n the closng tradng phase, together wth the transactons carred out wth the securty durng the last thrty mnutes of the contnuous tradng phase and together wth the last transactons carred out wth the securty before the sad thrty mnutes, n a quantty equal to the mnmum for calculaton of the closng prce. The mnmum quantty for calculaton of the closng prce s as follows: a) 1 In respect of shares, convertble bonds and opton bonds a quantty of securtes wth a monetary value to be set by the Board of Drectors, whch shall be between NIS 20,000 and NIS 50,000; 1 The Board of Drectors decded that the value of shares, convertble bonds and opton bonds, for the purpose of mnmum quantty for calculaton of the closng prce shall be 30,000 NIS.

13 13 b) In respect of convertble securtes not sad n subsecton 3A.B.4)a) above or n subsecton 3A.B.4)d) below - a quantty of convertble securtes equal to the mnmum quantty for calculaton of the closng prce of the convertble securty's underlyng asset, dvded by the exercse rato of the convertble securty; If the convertble securty can be converted nto more than one other securty, then the calculaton shall be made separately n respect of each of the securtes that arse out of ts converson and the largest of the amounts obtaned shall be the mnmum quantty for calculaton of the closng prce; c) In respect of rghts to shares and rghts to shares and convertble securtes the quantty of tradng unts equal to the mnmum quantty for calculaton of the closng prce; In respect of rghts to convertble securtes alone - the quantty of tradng unts equal to the mnmum quantty for calculaton of the closng prce of that convertble securty, of whch the largest quantty was offered n the ssue unt; d) In respect of bonds, bond optons, M.K.M. and commercal paper a quantty equal to the mnmum quantty for a securtes order. e) Notwthstandng the provsons of subsecton 3A.B.4)a) above, n the cases specfed below the mnmum quantty for calculaton of the closng prce shall be 1,500 tradng unts: - On the frst tradng day of a new securty and on each tradng day thereafter, up to and ncludng the tradng day on whch tradng n the securty frst takes place on the Stock Exchange; - On the frst tradng day of a securty, after tradng n t was halted for longer than three months, and on each tradng day thereafter, up to and ncludng the tradng day on whch tradng n the securty frst takes place on the Stock Exchange after the tradng halt. The provsons of ths subsecton shall not apply to hybrd bonds, as defned n subsecton 1.I of chapter 2 above. f) (1) The mnmum quantty for calculaton of a closng prce shall be calculated every month, on the last tradng day of the month, and t shall reman n effect durng the entre month, subject to the provsons of secton 3A.B.1)(2) below; (2) On the ex-day for rghts for adjustment the quantty of securtes shall be adjusted by the rghts dstrbuted accordng to the basc prce of the securty on that day; For ths purpose, f the last transacton ncluded n the calculaton of the closng prce was carred out durng the contnuous tradng phase, and f after the transacton was added the number of securtes n sad transactons exceeds the mnmum quantty for

14 14 calculatng the closng prce of the securty, then the last transacton n ts entrety shall be ncluded n the calculaton; If the last transacton ncluded n the calculaton of the closng prce was carred out durng the openng tradng phase or n the prce montorng aucton, then only the proportonal part of the sad last transacton shall be taken nto account for the calculaton, so that the quantty of securtes n the transactons wll equal the mnmum quantty for calculatng the closng prce of the securty; If the quantty of securtes n the transactons carred out before the sad thrty mnutes does not reach the mnmum quantty for calculatng the closng prce of the securty, then the closng prce shall be calculated accordng to the weghted average of the prces of all the transactons carred out on that day; 5) If no transactons were carred out durng the closng tradng phase and durng the contnuous tradng phase, then the closng prce shall be set at the openng prce of the securty on that tradng day; 6) If contnuous tradng was resumed after tradng n the securty was halted, then the sad closng prce shall be set as follows: a) If more than thrty mnutes are left untl the end of the contnuous tradng phase for the securty, then the closng prce shall be set as specfed n subsecton 3A.B.1) to 3A.B.4) above, as the case may be, but n no case shall transactons carred out before the addtonal openng phase be ncluded n the calculaton. b) If thrty mnutes or less are left untl the end of the contnuous tradng phase for the securty, then the closng prce shall be set as specfed n subsecton 3A.B.1) to 3A.B.3) above, as the case may be; for ths purpose, transactons carred out after the addtonal openng phase shall be ncluded n the calculaton. If the sad amount of the transactons does not reach the amount prescrbed under subsecton 3A.B.1) above, then the closng prce shall be calculated accordng to the weghted average of prces n the transactons carred out wth the securty n the closng tradng phase, together wth the transactons carred out wth the securty n the contnuous tradng phase after the addtonal openng phase, and together wth the transactons carred out durng the addtonal openng phase, or part of the transactons carred out durng the addtonal openng phase, untl ts cumulatve amount equals the amount prescrbed under subsecton 3A.B.1); c) If no transactons were carred out n the closng tradng phase and n the contnuous tradng phase after the addtonal openng phase, then the closng prce shall be set at the addtonal openng prce of the securty on that tradng day; d) If tradng n the securty was resumed durng the pre-closng phase, then the closng prce shall be set at the closng tradng prce.

15 15 7) If tradng n a securty was opened belatedly, because tradng n the securty was halted, then the closng prce of the securty shall be set as specfed n subsecton 3A.B.6) above, but wherever n subsecton 3A.B.6) t says "addtonal openng prce", read "openng prce", and wherever there t says "addtonal openng tradng phase", read "openng tradng phase". 8) In respect of a securty ncluded n the llqud lst, and a securty ncluded n the mantenance lst, the closng prce shall be calculated as prescrbed n subsecton 3A.B.1) above; f the amount of transactons n the closng phase dd not reach the amount prescrbed under subsecton 3A.B.1) above, then the closng prce shall be calculated accordng to the weghted average of the prces of transactons carred out wth the securty n the closng tradng phase, together wth the transactons carred out durng the openng tradng phase, or wth part of the transactons carred out durng the openng tradng phase, untl ts cumulatve amount equals the amount prescrbed under subsecton 3A.B.1). 9) Canceled. 10) a) Notwthstandng the provsons of subsectons 3A.B.1) to 3A.B.8) above, f the quantty of securtes, accordng to whch closng prces were calculated, s smaller than the quanttes specfed below, as the case may be, then the closng prce shall be calculated n the manner specfed n subsecton 3A.B.10) below: (1) In respect of shares ncluded n the Tel Avv 25 ndex a quantty of securtes equal to 0.5 of the mnmum sze of an order for those shares; (2) In respect of shares not ncluded n the Tel Avv 25 ndex, of securtes convertble nto shares and of rghts - a quantty of securtes equal to the mnmum sze of an order for those securtes; (3) In respect of bonds and bond optons a quantty of securtes equal to 0.1 of the mnmum sze of an order for those securtes; (4) In respect of M.K.M. - a quantty of securtes equal to 0.1 of the mnmum sze of an order for those M.K.M.; (5) In respect of commercal paper - a quantty of securtes equal to 0.1 of the mnmum sze of an order for those commercal papers; (6) In respect of securtes on the small captalzaton lst and on the llqud lst - a quantty of securtes equal to the mnmum sze of an order for those securtes n the contnuous tradng phase, f those securtes were to be traded n the contnuous tradng phase. (7) In respect of hybrd bonds, as defned n subsecton 1.I of chapter 2 above a quantty of securtes equal to the mnmum sze of order for those bonds. b) If the quantty of securtes, accordng to whch the closng prce of a securty was calculated, s smaller than the quanttes specfed n

16 16 subsecton 3A.B.10) above, as the case may be, then the closng prce shall be calculated n the followng manner: (1) The prce of the securty shall be calculated n the manner prescrbed n subsecton 3a.b.1) to 3a.b.9) above, as the case may be; (2) The dfferental between the prce calculated for the securty as sad n subsecton 3A.B.10)b)1) above and the basc prce of the securty shall be calculated (hereafter: "the prce dfferental"); However, f tradng n the securty was halted, then the prce dfferental shall be determned as the dfferental between the prce determned as sad n subsecton 3A.B.10)b)(1) above and the addtonal openng prce of the securty; (3) The rato shall be calculated of the quantty of securtes, accordng to whch the prce sad n subsecton 3A.B.10)b)(1) above was determned, to the quantty specfed n subsecton 3A.B.10)a) above, as the case may be (hereafter: the rato); (4) The product of the prce dfferental tmes the rato, shall be calculated (hereafter: the product); (5) The closng prce of the securty shall be set at the sum of the basc prce, plus the product However, f tradng n the securty was halted, then the closng prce shall be set as the sum of the addtonal openng prce, plus the product. c) The above subsectons a) and b) shall not apply to covered warrants. 11) If tradng n a securty was halted and was not resumed on the same tradng day, then the closng prce shall be set as sad n subsecton 3A.B.1) to 3A.B.5) and n subsecton 3A.B.7) to 3A.B.10) above, mutats mutands; 12) If a securty was not traded on any tradng day, then the closng prce shall be set at the basc prce of the securty on that tradng day. C. If a transacton that was ncluded n the calculaton of a sad closng prce was cancelled, then the General Manager of the Stock Exchange may order the closng prce of that securty to be calculated anew, n the manner specfed n subsecton 3A.B. above and the Stock Exchange ndces be recalculated accordngly. D. The closng prce of a securty s ts determnng prce and t shall be expressed accordng to the steps prescrbed n secton 3.D. n Chapter Fve below. 4. The prce of a securty traded on the Exchange, other than a dervatve, shall not be less than one agora and not more than 9,999,900 agorot per tradng unt.

17 5. The prce of a tradng unt of optons on a share ndex, on optons on share, on optons on fxed-rate non-lnked Israel government bond and on a foregn exchange rate shall not be less than NIS 1 and not more than NIS 999, The prce of a tradng unt n futures on a share ndex and of futures on a foregn exchange rate shall not be less than NIS 10 and not more than NIS 999, The prce of a tradng unt n three-month futures on nterest rates shall not be less than one percentage pont and not more than percentage ponts. 8. The prce of a tradng unt n futures on the Consumer Prce Index shall not be less than one pont and not more than 9, ponts.

18 18 CHAPTER FOUR: PRICE FLUCTUATIONS 1. Prce fluctuatons of securtes other than dervatves A. 1) The maxmum prce fluctuaton permtted on a tradng day, n the openng phase, shall be as follows: a) For shares and bonds convertble nto shares - 35% of the base prce of the securty; b) For opton certfcates and bond optons that may be exercsed n shares - 35% of the base prce of the exercsed shares, multpled by the exercse rato; c) For bonds - 6% of the base prce of the bonds; d) For bond optons - 6% of the base prce of the bonds to be exercsed, multpled by the exercse rato; e) For M.K.M. - 6% of the base prce of the M.K.M. f) For commercal paper - 6% of the base prce of the commercal paper; g) For nsttutonal securtes - 6% of the base prce of the nsttutonal securtes. h) For covered warrants unlmted. 2) Notwthstandng the provsons of subsecton 1) above, there shall be no lmt on the permtted prce fluctuaton n the nstances specfed below: a) On the frst tradng day of securtes traded for the frst tme and of securtes n whch tradng s beng renewed after a halt of more than one month, and n each day of the followng tradng days, untl and ncludng the tradng day on whch tradng occurred for the frst tme n the securty. b) On the last four tradng days before a securty s delsted from tradng; c) On the tradng day "ex rghts" of shares and convertble securtes; d) On the tradng day "ex spn off process" of shares and convertble securtes of the lsted company, n whch a spn off process was carred out; For purposes of ths secton "spn off process" - wthn ts meanng n secton 91.d. of Part Two of the Rules. e) On the last tradng days before a securty lapses or s redeemed; f) In the separate openng tradng, as defned n secton 1A.B of chapter 5 n these regulatons.

19 19 B. Durng the contnuous tradng phase, the pre closng phase and the closng tradng phase unlmted prce fluctuatons wll be permtted. C. Unlmted prce fluctuaton wll be permtted durng the Addtonal Openng Phase of a securty, for whch tradng had been halted for a set term. 2. Prce fluctuatons n dervatves shall be unlmted.

20 CHAPTER FIVE: TRADING IN SECURITIES EXCLUSIVE OF DERIVATIVES Phases of Tradng In these Regulatons: " The Reference Prce " - The prce of the last transacton n the securty; however, untl the frst transacton n the securty s carred out on a certan tradng day, the reference prce shall be equal to that securty's bass prce on that day; "Prce Montorng" a) In the openng phase, n respect to a securty that s not ncluded n the TA-25 ndex the postponement of openng tradng wth that securty n accordance to the Regulatons heren and subject to the exceptons specfed below. b) In the contnuous phase shft to a prce montorng aucton n the securty, n accordance to the Regulatons heren and subject to the exceptons specfed below. c) In the pre-closng phase - the postponement of closng tradng n the securty, n accordance to the Regulatons heren and subject to the exceptons specfed below. "Prce Montorng Aucton" "Mult-lateral Tradng" - Iceberg Order (ICE) "Fll Or Kll Order" (FOK) "Immedate Or Cancel Order" (IOC) Tradng carred out n the format of openng tradng, followng the use of prce montorng n the course of the contnuous tradng phase. Openng tradng, addtonal openng tradng, separate openng tradng, prce montorng aucton and closng tradng. A lmt order submtted wth three portons: total volume, ntal peak sze and addtonal peak sze that s ntended to be shown. Intal Peak sze of an Iceberg order" the porton of an ceberg order to be dsplayed n the order book upon submsson of the order. Addtonal Peak sze of an Iceberg order the porton of an ceberg order desgnated to be dsplayed n the order book followng the full executon of the ntal peak sze. Vsble porton of an ceberg order- the porton of an ceberg order desgnated for dsplay n the order book. Hdden Porton of an ceberg order" the total volume of the order less the porton of the order whch has been executed and less the vsble porton of the order at that tme; A lmt order to be carred out completely and mmedately; A lmt order to be carred out mmedately and completely;

21 21 "Stop-Lmt Order (STL) "Market Order (MKT)" "Lmt Order" (LMT) "Lmt Order for the Openng Trade (LMO)" Trggerng "Dynamc Threshold" - A lmt order, whch n addton to the prce to whch t s lmted, set that t wll become executable n the order book only when the prce of the last transacton equals or s hgher than a specfed prce, or alternatvely, when the prce of the last transacton equals or s lower than a specfed prce (hereafter: trggerng prce ). Upon trggerng, the order wll be regstered n the order book for executon accordng to the prce lmt desgnated on t; A buy order or a sell order, not lmted by prce, to be carred out at the market prce; A buy order or a sell order lmted by any prce; A lmt order to be carred out only durng the openng tradng phase; Submsson n the order book of a stop-lmt order for the purpose of executng transactons accordng to the prce lmt stpulated on the order. The expected rate of change n the prce of a securty compared to the reference prce of that securty, as the Board of Drectors shall determne, on condton that the transacton n whch the reference prce was set was carred out durng or after the last multlateral tradng n the securty. The Board of Drectors may set dfferent values of the Dynamc threshold for dfferent categores of securtes or for dfferent groups of securtes. "Statc Threshold" a) In the Pre-Openng phase The rate of change of the last theoretcal openng prce of the securty compared to ts bass prce, as the Board of Drectors wll prescrbe. b) In other tradng phases The expected rate of change n the prce of the securty compared to the prce determned n the last mult-lateral tradng that was held n the securty, as the Board of Drectors wll prescrbe. The Board of Drectors may set dfferent values of the statc threshold for dfferent categores of securtes or for dfferent groups of securtes. Tradng wll take place n fve tradng phases, as specfed below. A. The Pre-openng Phase No transactons wll be carred out durng ths phase of tradng. 1) A member may only submt buy and sell orders to the Exchange, as specfed below:

22 22 a) Lmt orders (LMT), where the prce s lmted between the basc prce and the lmt of the permtted daly fluctuaton durng the openng phase; b) Lmt orders for the openng trade (LMO), where the prce s lmted between the basc prce and the lmt of the permtted daly fluctuaton at the openng phase. c) Stop-Lmt Order (STL). Orders of ths type shall be submtted n the order book as trgger pendng orders and wll not partcpate n the Openng tradng phase. d) Iceberg Order (ICE), for whch the lmt starts at the base prce up untl the daly prce fluctuaton permtted n the Openng tradng phase. Orders that dffer from those specfed above shall be rejected and notce thereof shall be sent to the member who submtted them. 2) Orders submtted shall be regstered n the Order Book. 3) The precedence of the orders shall be determned as follows: a) Buy sde Orders stpulatng hgher prce lmts shall have prorty over orders wth lower prce lmts. b) Sale sde Orders stpulatng lower prce lmts shall have prorty over orders wth hgher prce lmts. c) For orders stpulatng the same prce lmt, buy and sell orders separately, prorty shall be set as follows: 1) Lmt orders, lmt orders for openng phase and the ntal peak of ceberg orders, accordng to the order receved by TASE; 2) Hdden portons of ceberg orders, accordng to the order receved by TASE. 4) a) The Exchange shall, for each securty separately, calculate and publsh the prce and the tradng volume that would have been determned, f the openng tradng sad below had been carred out for that securty at the tme the calculaton was made, and that n accordance wth the buy and sell orders for that securty receved untl the tme of the calculaton. (The sad prce shall hereafter be called the "theoretcal prce" and the sad tradng volume shall hereafter be called the "theoretcal openng volume"). The theoretcal openng prce of a securty s the prce at whch a full or a partal balance was reached between buy and sell orders, excludng trgger pendng orders, subject to the precedence set n paragraph 3) above and at whch the tradng volume s the hghest.

23 23 If the hghest tradng volume of a certan securty s reached at more than one prce, then the prce nearest the basc prce shall be the theoretcal prce. If no full or partal balance between buy and sell orders s reached or f no orders at all were submtted for that securty, then ts basc prce shall be the theoretcal openng prce of that securty. b) Publcaton of the theoretcal openng prces and of the theoretcal openng volumes for each of the securtes shall begn 10 mnutes after the begnnng of ts pre-openng. When, begnnng wth that moment, an addtonal order s submtted for any securty, and then up-dated theoretcal prces and theoretcal tradng volumes shall be calculated and publshed for that securty. 5) The move to the openng tradng phase a) Immedately before the begnnng of the openng tradng phase (hereafter: "The Orgnal Openng Tme") the last theoretcal TA-25 ndex and the last theoretcal openng prce for each securty shall be calculated. b) If the last theoretcal TA-25 ndex fluctuated by less than 2.5% compared to the bass ndex on that day, or f the rates of change n the last theoretcal prces of all the shares ncluded n the TA-25 ndex are equal to or lower than the statc thresholds determned for those shares - Openng tradng shall take place at the orgnal openng tme. If the last theoretcal TA-25 ndex fluctuated by 2.5% or more compared to the bass ndex on that day, and f the rate of change n the last theoretcal prce of a share ncluded n the TA-25 ndex s hgher than the statc threshold determned for that share, openng tradng on that day shall be postponed for a tme that shall be determned randomly and that shall be between 3 and 4 mnutes (hereafter: "The Frst Extenson").. c) At the end of the frst extenson, mmedately before the openng tradng, the last theoretcal TA-25 ndex and the theoretcal openng prce of every securty shall be recalculated. d) If the last theoretcal TA-25 ndex fluctuated by less than 2.5% compared to the bass ndex on that day, and f the rates of change of the last theoretcal prces of all the shares ncluded n the TA-25 ndex are equal to or lower than the statc thresholds prescrbed for those shares - Openng tradng shall take place at the end of the frst extenson.

24 24 If the last theoretcal TA-25 ndex fluctuated by 2.5% or more compared to the bass ndex on that day, or f the rate of change n the last theoretcal openng prce of a share ncluded n the TA-25 ndex s hgher than the statc thresholds determned for that share, openng tradng on that day shall be postponed for a second tme that s to be determned randomly and that shall be between 3 and 4 mnutes (hereafter: "The Second Extenson"). e) At the end of the second extenson, mmedately before the tme for begnnng the openng tradng phase, the last theoretcal Tel Avv 25 ndex shall agan be calculated. f) If the last theoretcal Tel Avv 25 ndex changed by less than 5% from the basc ndex on that day, openng tradng on that day shall take place at the end of the second extenson. If the last theoretcal Tel Avv 25 ndex changed by 5% or more from the basc ndex on that day, openng tradng on that day shall agan be postponed by an arbtrary amount of tme of between 44 and 45 mnutes (hereafter: "the frst crcut breaker"). g) When the frst crcut breaker s actvated, the followng shall take place: 1) Tradng n dervatves of shares and n dervatves of share ndexes shall be stopped. The sad tradng n dervatves wll be renewed when the openng phase of tradng n shares takes place, 2) A notce that the frst crcut breaker was actvated shall be publshed mmedately over the Stock Exchange nformaton dstrbuton system; 3) If the of the last theoretcal Tel Avv 25 ndex, as calculated under subsecton e) above, changed by 12% or more from the basc ndex on that day, then the General Manager of the Stock Exchange may postpone the openng tradng phase on that day by more than 45 mnutes or untl the end of the tradng day, and that n consultaton wth the Charman of the Board of Drectors. h) At the end of the frst crcut breaker, mmedately before the tme for begnnng the openng tradng phase, the last theoretcal Tel Avv 25 ndex shall agan be calculated. ) If the last theoretcal Tel Avv 25 ndex changed by less than 12% from the basc ndex on that day, openng tradng on that day shall take place at the end of the frst crcut breaker; If the of the last theoretcal Tel Avv 25 ndex, as calculated under subsecton e) above, changed by 12% or more from the basc ndex on that day, then openng tradng n shares, n securtes convertble nto shares and n ETN's of whch the underlyng asset s a share basket ndex shall be postponed and tradng n dervatves of shares and n dervatves of share ndexes shall be stopped (hereafter: "second crcut breaker").

25 25 j) When the second crcut breaker s actvated, the followng shall take place: 1) A notce that the second crcut breaker was actvated shall be publshed mmedately over the Stock Exchange nformaton dstrbuton system; 2) The General Manager of the Stock Exchange may, n consultaton wth the Charman of the Board of Drectors, postpone the openng tradng phase on that day by an addtonal 45 mnutes, or he may stop tradng untl the end of the tradng day. k) 1) If the openng tradng phase was postponed twce on the same day because crcut breakers were actvated and f the last theoretcal Tel Avv 25 ndex, whch was calculated at the end of the second crcut breaker, changed by 12% or more from the basc ndex on that day, then the General Manager of the Stock Exchange or a person authorzed by hm shall stop tradng n shares, n securtes convertble nto shares, n ETN's for whch the underlyng asset s a share basket ndex, n dervatves of shares and n dervatves of share ndexes, and that untl the end of the tradng day. 2) Notwthstandng the aforesad, the General Manager of the Stock Exchange may, n consultaton wth the Charman of the Board of Drectors, resume tradng on the same tradng day, f t s hs opnon that under the crcumstances there s justfcaton for dong so. When the decson to resume tradng has been made, the General Manager of the Stock Exchange may decde to change the tradng schedule and notce thereof shall mmedately be made publc on the nformaton dstrbuton systems of the Stock Exchange. A sad resumpton of tradng may be after less than 45 mnutes elapsed snce the notce of the tradng halt had been made. l) The provsons of the above subsectons f) to k) shall not apply on the tradng day after the day on whch the last theoretcal Tel Avv 25 ndex changed by 12% or more from the basc ndex of that day. m) In addton and subject to the aforesad, for a securty that s not ncluded n the TA-25 ndex the move to the openng tradng phase shall be as specfed below: 1) If the rate of change n the last theoretcal prce of the securty compared to ts basc prce s hgher than the statc threshold determned for that securty, prce montorng shall be actvated for that securty durng an nterval that shall be determned randomly and that shall be between 3 and 4 mnutes.

26 26 2) At the end of the prce montorng aforementoned n subsecton 1) the last theoretcal openng prce of the securty shall agan be calculated accordng to the orders for the securty that were submtted up to the tme of the calculaton. 3) If the rate of change n the last theoretcal prce of the securty compared to ts basc prce s equal to or lower than the statc threshold determned for that securty, openng tradng n that securty shall take place. 4) If the rate of change n the last theoretcal prce of the securty compared to ts basc prce s hgher than the statc threshold determned for that securty, prce montorng shall agan be actvated for that securty durng an nterval that shall be determned randomly and that shall be between 3 and 4 mnutes, followed by openng tradng n that securty. B. The Openng Tradng Phase 1) Durng ths tradng phase, sell orders submtted for each securty durng the preopenng phase, excludng trgger pendng orders, shall confront such buy orders, and an openng prce and tradng volume shall be establshed for each securty. 2) The orders regstered n the Order Book shall be carred out n the order of precedence set n subsecton A.3) above, at the openng prce determned as sad below. 3) a) The Exchange shall calculate the openng prce of each securty separately, n accordance wth the orders submtted durng the preopenng phase, excludng trgger pendng orders. If a transacton ncluded n the aforesad calculaton of the openng prce was canceled, then the General Manager of the Exchange may order the openng prce of that securty to be calculated anew, as specfed n paragraphs 4) and 5) below, and Exchange ndexes to be calculated anew n accordance therewth. b) The calculaton of the openng prce shall be made, for each of the securtes, one after the other; the order of the securtes for calculatng the prce shall be random and t shall change every day. 4) The openng prce of a securty s the prce at whch buy and sell orders are n full or partal balance, excludng trgger pendng orders, subject to the order of precedence prescrbed n subsecton A.3) above, and at whch the tradng volume s the hghest. If the hghest tradng volume of a certan securty s reached at more than one prce, then the prce nearest the basc prce shall be the openng prce. 5) If no full or partal balance between buy and sell orders s reached or f no orders at all were submtted for a securty, then the openng prce of that securty shall be ts basc prce and the tradng volume shall be zero.