How TASE is Enhancing Market Activity Through Block Trades at Closing Prices

Introduction

The Tel Aviv Stock Exchange (TASE) is making significant strides in enhancing its trading ecosystem through new mechanisms aimed at increasing on-exchange trading volumes. As part of this strategy, TASE has recently introduced block trading at closing prices, a welcome addition that aligns with international trading standards and responds to the evolving needs of investors.

What is Block Trading?

Block trading refers to the execution of large-volume transactions at once, providing investors the opportunity to trade significant quantities of securities without disrupting market prices excessively. Traditionally, large trades could lead to price fluctuations that may not reflect fair market value, particularly during volatile market conditions. TASE’s introduction of this mechanism aims to address such issues while motivating both investors and traders to engage more actively in on-exchange transactions.

Why on-Exchange Trading Matters

On-exchange trading offers numerous benefits, such as heightened transparency and reduced counterparty risk. All transactions conducted on-platform are fully documented, which minimizes operational errors and compliance risks. Moreover, the integration of a central clearing mechanism neutralizes counterparty risk, enhancing overall market liquidity, especially for bonds and shares. Globally, regulators are actively pushing for more on-exchange trading to foster a fairer and more transparent market environment.

TAL Trading Phase

In August 2025, TASE launched the TAL (Trading at Last) trading phase, which permits trades to be executed at the security's closing price after the closing auction. The response to this new trading phase has been overwhelmingly positive, with significant daily transaction volumes reported across equity and bond markets. Prior to the TAL launch, participation in the closing auction phase by foreign and institutional investors was notably low, but this new mechanism has changed that dynamic.

During significant market events, such as the bond index update on October 20, 2025, TASE saw a remarkable increase in TAL trading. For instance, TAL trading reached NIS 122 million, a clear indication of the growing acceptance and utilization of this trading strategy — TASE anticipates sustained growth, especially during upcoming equity indices' updates.

Expanding Trading Options

Recognizing the value that TAL provides to investors, TASE has decided to broaden its trading options within this phase to include block trades. By allowing block trades to be executed at closing prices, the exchange hopes to attract large-scale investors who were previously hesitant to operate within the traditional on-exchange trading structure. Investors can now execute large trades at the closing price or within predefined volatility limits, similar to what was previously available through Over-the-Counter (OTC) transactions.

This added flexibility is expected to significantly improve trading volume, as it diminishes the motivation to rely on OTC trades that often lack transparency. For instance, while OTC trades allow for price discounts without modifying share prices, TASE’s initiative lets investors achieve similar outcomes without imposing fluctuations on market prices throughout the trading day.

Achievements and Future Prospects

TASE reports a staggering NIS 91 billion in OTC transactions for shares and NIS 54 billion for bonds so far in 2025. Among the notable OTC transactions this year are significant trades involving Bank Leumi and Brack N.V., indicating a consistent demand for large-scale transactions.

By enabling block trading at closing prices, TASE is not only working to make the market more attractive for large investors but also aims to foster a more efficient and transparent distribution of securities overall.

Conclusion

TASE's strategic moves to incorporate block trading at closing prices can reshape the trading landscape by encouraging transparency and enhancing trading volume. As the exchange continues to evolve, stakeholders within the financial markets should anticipate further innovations aimed at bolstering participation and ensuring the integrity of trading practices. That's the future TASE envisions, where on-exchange trading not only thrives but also sets a benchmark for other exchanges worldwide.