Tel Aviv Stock Exchange Ltd. — Management Reports 2022

Oct 24, 2022

October 24, 2022

Re: Strategic Plan for 2023 - 2027

Further to the stated in Section 1.36.2 of the Description of the Business of the Company included in the 2021 Periodic Report published on March 21, 2022 (reference no.: 2022- 01-032368) (hereafter: "the Periodic Report") in connection with the formulation of a new five-year strategic plan, the Company (hereafter, also: "TASE") announces that on October 23, 2022 the Board of Directors of the Company approved a strategic plan for the years 2023-2027 (hereafter: "the Strategic Plan"). As stated in the Periodic Report, the formulation of the Strategic Plan took into consideration of the progress of implementation of the principal strategic projects that were included in the Company's previous strategic plan as well as the principal changes, trends and developments in the financial markets and in the business environment of TASE.

Presented below are the principals of the Strategic Plan:

1. Strategic Goals

According to the Strategic Plan, the Company intends to promote four principal strategic goals:

• a. Further developing and enhancing the value proposition of the core activity of TASE The Company attributes significant strategic value to further enhancement and upgrading of its core activities and to increasing its value proposition to customers in the various segments.Within this framework, the Company intends to pursue: (1) the reinforcement of TASE's international profile and attraction of foreign investors; (2) a stronger connection with the investors, improvement of liquidity and upgrading of Israel's markets; (3) the regularization and upgrading of the mechanisms for the clearing and reporting of off-exchange (OTC) transactions.
• b. Strengthening the engagement with the end customers The Company will consider courses of action for strengthening the interrelations and the interfaces with its customers, in all relevant segments, whether directly or through intermediaries, as appropriate. Within this framework, the Company intends to pursue: (1) the

leveraging and upgrading of its digital assets and the creation of new digital assets. Additionally, and taking into consideration the greater volume of the information available in the financial markets, the demand for such information and the effect of technological innovations on the distribution processes in the market - to develop and make accessible innovative solutions and services in connection with stockexchange information; (2) to pursue the provision of direct services to local institutional investors and to market participants, all this in the light of common practices in other advanced markets around the world and in the spirit of generally accepted regulatory directives; (3) improvement and expansion of its value proposition in the private market, utilizing the expertise, reputation and operating solutions that it possesses, with emphasis on strengthening the engagement with the qualified or the classified customers to further this activity.

• c. Digital assets strategy Creation of a Blockchain (DLT) platform for trading in digital assets and gaining foothold in the Crypto arenas: taking into consideration, inter alia, the development and growth of new digital assets, TASE will pursue, similarly to moves that are advanced by other leading global exchanges, the implementation of innovative technologies, including, among others, the use of DLT, tokenizing of various asset classes and smart contracts, and the consideration of the implications and advantages of multiple potential courses of action in this context.
• d. Export of technological services and solutions to foreign exchanges TASE intends to promote the sale of technological services and solutions designed for small and medium exchanges, based on TASE's existing technological capabilities and those that will be developed as part of the implementation of the new Strategic Plan. The advancement of these moves will be, par for the course, subject to the obtaining of a specific approval from the Board of Directors of the Company, and shall be conditional upon the practicability of executing such moves concurrently with the advancement and execution of the other goals defined above.

2. Quantitative Goals

As part of the approval of the Strategic Plan, the Board of Directors of the Company has set a quantitative revenue target of a compounded annual growth rate (CAGR) from

organic growth of 10%-12% in the years 2023-2027. Achievement of the aforesaid goal depends, among others, on TASE's flexibility in determining its tariffs.

3. Restructuring of the TASE Group

In light of the strategic challenges presented by the Company's business environment, taking into consideration the strategic goals specified above, and based on a study of the operating structure of the leading global exchanges, the Board of Directors of the Company approved the advancement of a restructuring in the TASE Group in order to ensure the effective implementation of the Strategic Plan and to further the continued development and upgrading of the capital market for the benefit of the public. Within this framework, a new public holding company will be established, which will hold 100% in the Company that will become a private company, and at the same time the subsidiaries of the Company will be moved up, becoming subsidiaries of the new holding company and fellow subsidiaries of the Company and of new companies that would be established as part of the implementation of the aforementioned business and strategic plans of the TASE Group. It is hereby emphasized that the implementation of the aforesaid restructuring requires the obtaining of the approval of TASE's shareholders' meeting and various regulatory approvals, including the approval of the Israel Securities Authority.

1. Mergers and Acquisitions

As part of the implementation and advancement of its strategic goals, the Company intends to consider the implementation of a plan for strategic purchases and/or investments in its areas of activity and/or in areas that offer added value to its activity (programmatic M&A). Specific plans will be presented to the Board of Directors of the Company for approval, as necessary.

It is hereby clarified that the implementation of the Strategic Plan and the courses of action that may ensue from the principal strategic goals described above, requires, inter alia, the execution of significant changes to structure and infrastructure, this subject to regulatory restrictions that apply to the activity of TASE and to the ability of TASE to provide sufficient dedicated sources for this purpose. To the extent that an extraordinary investment is required to further any of the new strategic goals of TASE, or any of the ensuing courses

of action, the matter will be presented to the Board of Directors for discussion and approval, as required.

For additional information in connection with the Strategic Plan, see the presentation attached to this immediate report.

The information provided in this immediate report and in the attached presentation contains the principals of the Company's Strategic Plan, as formulated by it over the recent months and approved by the Board of Directors of the Company. The aforesaid information, including the rate of increase in the revenue of the Company, the restructuring of the TASE Group and the merger and acquisition activity, contains forecasts, assessments, estimates and other information pertaining to prospective events and matters, the realization of which is uncertain and is not in the control of the TASE Group. Accordingly, it is hereby clarified that the aforementioned forecasts, assessments, estimates and other information may not be realized or may be realized differently, inter alia as a result of inability to obtain the requisite approvals, and as a result of changes in the volumes of activity of the Company and in the relevant market conditions compared to those known at present or the realization of the risk factors that apply to the TASE Group, as described in Section 1.38 of the Periodic Report.

Yours sincerely,

Ittai Ben Zeev, CEO

TASE Strategic Plan

2023-2027

Disclaimer

This presentation vas prepared by The Televis Inte stration of the stration of the company and the subscillines of the company hereader of the Company' for the years 2023 - 2027. Accordingly, the information this presentation unequivocally constitutes forward-looking information.

The presentation des ratine, recommentation opinion of the Connany or an initiation o acept sub offer, and is menel soler or convention in potential investor, and is not a substitute for the reachnation and the reseint of the reseint of the peofic circumsances of each investor.

The internation ontained in this presentation is complete picture of the cata of the Company and its personal in culting the instruption in cultury the instruption in company is neessary to peose the ready will be aubished by the Comany, he he even of any ontradiction between the information and the information and the information on the informati the reports of the Company the Company stall great. This presentains should not be releo upon and structure of any include of any including of any including of any including whatseer, including as reading the data ontained therein. The presentation may nobusi niomation and or capestion a manner and or specification and or edi and breaking had differ from those presented in the Company Under no creamation a substitute for the reports of the Company and it is recommended to peose the reports of the Company.

The presentation ontains in the also, inter alle, on estimates and assessments of the Company and the regarded with aaline. Furthernon, the presentation nay contin data and assessments hat are have not been miseentently earnined by the Company is no recommiss on the company is no recommiss on the couray, a fines them reasonable. In securities in general and in a company in particular mind that past results are not neessarily indiative of future of fiture performane. This presentation contains in ornation, as defined in the Securities Loving information'. In some instance, forwards may be items such as "probabe", "articipates", "believ", "nand", "ontinues", "ould", plans", "project", "foress" and similar temr and expressions Subh information, incudinq information concerning the rate of increase in the cestuduing of the IASE Group and the merger and acquisition advinces in other information perialing o properies and matters, the realizion of which is not in the control of the TASE Group. Formation does not onstitue proven fact and is based soley on the persective of nanagenert of the Company, which management of the Company has knowledge on the presentation and is intended on the date to which it reales, Forrarie is subject o significant risks of nor-readiation, and such information is uncertain, canad to assessed in alvario and can be outside the control of the Company.

According), it is hereby clarifed that the formerion estimates and the information may not to realized differently, inter alle as a result of hability to obian the requiries approals, and a a result of the Company and in the elevan make conditions compared on the realization of the realization of the risk factor that appy to the TASE Grup, as described in Section in 1920 published on March 2, 2022 febence no. 2022 febence, the reacles of this presentation an callined that the adual results and achievenents of the future could materially differ from those presented in the is contained in this presentation

With the eception of an uncervice in accordance with the securitis laws transay to the Company make no undertaining o upote on nooth any information that is contained in the research of new infrance in addition, it sheep carried that the Company s strategy and pans, which an included in this presentation, are acourale and nav change acordinato resolutions of the Board of Directors of the Company, as staal be from time on time, including inter alle, due to habilit obtain any of the approvals required by law or the realization of any of the risks referred to above.

TASE Strategic Goals 2017-2022

TASE's Journey | Principal Developments Since 2017

TASE's Journey | Financial Results เพร, in millions)

Year ended December 31
------------------------

	2017	2018	2019	2020	2021	H1 2022*
Revenue from services	242	256	260	304	324	189
Operating cash outflow	191	194	197	209	221	116
Adjusted EBITDA (*)	52	62	୧3	95	103	73
% of revenue	21%	24%	24%	31%	32%	3%
Depreciation and amortization expenses	30	33	45	45	48	25
Adjusted operating profit*	22	29	18	50	55	47
% of revenue	9.0%	11.3%	6.9%	16.5%	17%	24.9%

(1) The results of the adjusted perating profit ectudes star-based payments appenses, reversel of the buildings inpairment and expanses with respect to tansies to ransises on

TASE's Journey | TASE's Financial Performance (NIS, in millions)

("The results of the adjusted EBTDA and the state-based payments appense, revesal of the building inpairment and expenses with respect to ransies in ransies in ransies in ran (**) Excluding the effect of the increase in marketing expense in the Authority's fee following the grant of a discount, the CAGR of expenses is 3.5%.

Principal Trends and Developments in the Business Environment

Money Supply

Why?

Increase in the institutional money supply, growth in the total bank deposits of retail customers, greater activity of foreign investors in Israel

Impact

Drives growth in the retail activity in the capital markets, increase in the foreign component of investments, investment in alternative assets and the entry of new players into the field.

The public's financial assets' portfolio approximates NIS 5 trillion

(55% of the portfolio is managed by the local institutional investors)1

Globalization in the Financial Markets

Implications

• Strengthening of global financial centers and the competition among them.
• · Challenging the position of local financial markets.
• · Regulation that advances the removal of barriers, global standardization and the entry of international institutions, including Big Tech.
• · Continued weakening of the home bias of local markets.

35% of the institutional investors portfolio is exposed to foreign assets

(1) Source: Bank of Israel

לניירות ערך לניירות ערך תלאביב
TEL AVIV STOCK EXCHANGE

Technological Innovation

Alternative Markets (Crypto)

Regulated Markets

Substantial dependence on regulatory adjustments and on the regulators' position

!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Increase in Retail Participation in the Capital Market

Trend, digitalization and upgrading of end-customers' tools, removal of entry barriers, effect of COVID-19.

Macroeconomic Environment

Regulation

The interest rate started climbing after several years of a zero-interest environment, as a result of the rising inflation. Concurrently, the markets started to "correct" with increased volatility.

This may potentially directly impact the liquidity of the markets, the value of the assets traded on TASE, investors' preferences etc.

Rising of the interest rate since the beginning of 2022 1 Federal Reserve (FED) Interest Rate, % (2018-Today)

(1) Source: Bank of Israel, Federal Reserve/ Processing by TASE.

Principal Regulatory Developments:

לניירות ערך הבורסה לניירות ערך תלאביב
TEL AVIV STOCK EXCHANGE

Comparative Review

TASE fees are significantly lower than those charged by the benchmark exchanges

(1) Source: ERDesk calculations

Comparative Review - There is Room for Growth

% EBITDA - compared to leading European exchanges

Source: exchanges, Bloomberg, ERDesk calculations, TASE Calculations

Goals of the New Strategic Plan

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The information regarding the Strategic goals contains forward-looking information may not be realized or may be realized differently, inter alia as a result of inability to obtain the requisite approvals, and as a result of changes in the volumes of activity of the Company and in the relevant market conditions or the realization of the risk factors that apply to the TASE.

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Strategic Plan for 2023-2027*

Connecting with Key Trends

Handling Competition

Synergetic Strategic Goals

The information reading the Strange sources of the may not be realized or may be realized of friability to othin the requiste approvis, and as a result of charges in the volumes of activity of the Company and in the realization of the risk factors that apply to the TASE.

Enhancement of TASE value proposition

The Strategic Rationale - Continued Organic Growth

Reinforcing TASE international profile

Development of OTC Market

Further Reinforcement of TASE's International Profile and Attraction of Foreign Investors

The Force Multiplier of Bringing Foreign Investors into the Local Market

· TASE's Value Proposition

Visibility

Reach

Valuation

الااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااااا

Proposed courses of action

• · Active marketing
• · Improving connectivity (institutionals, nostro, liquidity providers, retail)
• Incorporation of foreign issuers and intermediaries
• Expansion of geographic influence (Europe, Asia, Emirates)
• · Bringing in foreign assets

of the daily trading volume is attributed to foreign investors (in shares)

(1) Source: Economics Department, TASE

of the foreign investors transacting in non-dual shares hold up to 5 shares in TA-35

289 vs 1050

Most of the foreign investors transacting in TA-125 shares transact primarily in the index's dual shares

Liquidity and Derivatives Strategy

Enhancing liquidity in TASE's Markets

Challenges

Low retail participation rate, large (and/or blocked) institutional investors holding, dependence on the banks as the local distribution system, regulatory restrictions (price, product flexibility), limited liquidity in new issuances, insufficient depth for international players, liquidity not a priority for the issuing companies.

Proposed courses of action

• Adjustments on the trading methodology
• · Retail engagement
• Incentives for liquidity providers
• Upgrading of analytical tools

Liquidity and Derivatives Strategy / Relaunch of the Derivatives Market

TASE will launch a reform to strengthen the derivatives market

Circumstances

The number of active accounts has been decreasing during the last years

Increased institutional investors activity overseas

Lack of coordination / intermediaries/ distribution mechanism (no retail marketing, technically complicated, expensive)

The market is not aligned with international standards

Competition

Development of Off-Exchange Trading (OTC)

Alignment with international standards

Transparency - Reporting of transactions to the public/ the regulator

Transactions -Spread

"Immediate" reporting of OTC transactions

OTC Trading in Israel

130K

Number of

Annual OTC

transactions

Reporting and execution not aligned with international standards

9715

Total value of transactions

*Including the estimate of OTC transactions without monetary consideration

+50%

The number of "internal transactions" within a TASE member is more than 50% of total OTC transactions

Proposed courses of action

• Changes in clearing transactions (custodians and transfers)
• New system for the reporting of OTC transactions
• · Real-time distribution of information on OTC transactions
• · (Trade Repository)
• · Reporting of OTC transactions

Efficiency

Integrity

International Standard

The data is updated for the end of 2021. Source: TASE Clearing Department.

: C. 000

Direct customer engagement

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Digital, Data Distribution and Analytics

Data Distribution and Analytics

Leveraging the Digital Value proposition

• Digitalization of internal work processes
• Improvement of services and products to customers

Considering the provision of direct services to institutional investors and key players in capital markets

Institutional investors

trading, custody and lending first principal courses of action

• Membership in TASE Clearing house as a foundation for the provision of additional services.
• · Connectivity to complementary services (e.g., lending on the Securities Lending Pool)
• · Enabling the provision of custodial services for foreign and alternative assets

Creation of infrastructure for the provision of direct services to institutionals and key players in capital markets in the operational and posttrading arenas

Financial key players

principal courses of action

• Clearing of transactions in trust
• Direct connection to Clearing House services
• · TASE membership
• · Connectivity to the securities lending pool and to complementary services

Transforming TASE into a Siqnificant Private Market Player

The current value proposition

The challenge The lack of an efficient distribution system for qualified investors (+ insufficient motivation of the distributors)

The solution Establishing a qualified investors "loyalty program" [alternative distribution mechanism + innovative membership models]

• Supermarket of alternative products
• Opportunity to leverage innovative technologies
• Direct marketing to the customers
• All investor holdings (public and private) in one place
• Foundation for collaborations with third parties

Blockchain, Crypto and digital assets strategy

Creating a platform for digital assets Implementing Blockchain technology (DLT)

Possible courses of action

The platform will be suited for various asset classes that may gradually be introduced into it, depending on the developments in the market conditions and the requlatory environment:

• 1. Private Market
• Digital Bonds* 2.
• 1. Digital Assets (Crypto, Utility Tokens, NFT's)

The challenges

Requlatory unclarity, steep setting up and adjustment costs and local and international competition

(") TASE is promoting a dedicated POC for the issuance, trading of digital state bonds on a digital assets platform.

Venturing into the Crypto Markets

(*) Source: Publication of the Israel Securities Authority. (**) Source: Product of background talks with local capital market players.

Export of Technological Services and Solutions to other exchanges

TASE IT Services & Solutions Value Proposition

Synergies and the reduction of future development costs

• Stock Exchange Know-How
  • In-House Tech
  • New Tech Strategic Developments
    • Israel Brand

Reinforcing cooperations and TASE's international profile

Creating connectivity with other exchanges (small and medium) based on TASE technology

May include the purchase of holdings in other exchanges (subject to applicable approvals)

TASE's strategic plan includes investments in innovative technology

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11 - 1

DLT, Blockchain, Tokenization

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Development of advanced technologies

TASE intends to sell its proprietary technologies to small and medium exchanges

TASE develops proprietary trading technologies and infrastructure

לא הבורסה לניירות ערך תלאביב

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The information regarding the TASE Restructuring contains forward-looking information may not be realized or may be realized differently, inter alia as a result of inability to obtain the requisite approvals, and as a result of changes in the volumes of activity of the Company and in the relevant market conditions or the realization of the risk factors that apply to the TASE.

TASE Revenue Growth Target

How are we going to do it?

TASE Revenue Growth Target* 10-12%

CAGR 2023-2027

Organic growth

Updating of tariffs

Strategic projects

Additional measures

M&A

Efficiency

The information regarding the Revenue Growth Target contains forward-boking information may be realized differently, inter alia as a result of inability to obtain the requisite approvals, and as a result of the Company and in the relevant market conditions or the risk factors that apply to the TASE.

Israel is one of the world's strongest and fastest growing economies, however the local capital market taps only into a small portion of its inherent potential and the strength of the Israeli economy.

Realizing the unique potential of the local capital market as a foundation for the further growth of TASE.