Investment Operations

TASE to Launch Blockchain-Based Securities Lending Platform

Digital Asset Custody and Servicing

Platform is the First of Its Kind and Will Enable Capital Market Players Direct Lending Among All the Major Financial Instruments

The Tel-Aviv Stock Exchange (TASE: TASE) has announced the first-ever launch in Israel of a Central Blockchain Securities Lending Platform, which it calls an innovative and groundbreaking financial technology.

There is currently no central securities lending platform in the Israeli market. Securities Lending is at present executed using inter-bank mechanisms within, and if necessary outside, banking group limits. As a result, analysts say, the market has not been fully exploited to satisfy the potential needs of economic agents.

According to a TASE statement, “the cutting-edge platform will transform the Securities Lending market in Israel by enabling direct lending among all the major financial instruments.” The platform, said the Exchange, will function as a one-stop-shop for all securities lending activities, permitting access to larger securities volumes within shorter timeframes, even operating in shorter-term positions.

In March 2020, TASE members were given access to an initial testing environment, in order to test lending transactions in the new platform and adapt their systems in preparation for the production phase.

“The Blockchain technology will present a new level of safety for securities lending and will support growth for transactions based on this new platform,” said Orly Grinfeld, EVP and Head of Clearing at TASE.

The use of Distributed Ledger Technology (DLT) as the basis of this new trading platform is expected to harness some of the blockchain’s primary advantages and features, such as direct peer-to-peer transactions, Smart Contract, and enhanced security through immutability.  All of these, said Grinfeld, are expected to benefit TASE, its custodians and their clients by reducing costs, increasing security and enabling the market to exploit its full potential.