Moshe Tery, chairman of the Israel Securities Authority, is working to reduce the number of small companies whose trading liquidity on the Tel Aviv Stock Exchange is so low that it increases the potential for stock market manipulation. "Small companies don't interest me because they don't contribute anything. They're simply a place that attracts all sorts of manipulations. They require us to put energy and effort and we waste a lot of time," he told The Jerusalem Post. Tery noted that the companies have market capitalizations of only a few million shekels and are traded once a month, at most. Therefore, shareholders have difficulty selling the securities, leading some to artificially boost their values by placing fraudulent offers for a small number of shares at inflated prices in order to create an impression of interest and activity in the stock. They then sell their holdings in the company and the stock price falls back to its actual value, he said. "When the company is worthless, one man can have an influence. When there are many people in the market and many good companies, this can't take place," he added. "With big companies that have tens of thousands of people trading their shares around the world, one shareholder doesn't have enough influence to artificially increase the stock's value." However, Tery doesn't include research and development start-ups in this group and he is working with the Israel Venture Association to make it easier for such hi-tech companies to list on the Tel Aviv Stock Exchange (TASE). As the head of the Israel Securities Authority (ISA), it is Tery's job to protect those who invest in stocks and other securities by ensuring that companies provide full and accurate information about their affairs. But he can't stop investors making bad decisions. "There are a lot of companies that are not fit to be traded on the stock exchange. The ISA warns the public, but cannot forbid people from buying their stock," he said. The TASE has placed on a black list between 20 and 30 companies that have failed to meet minimum criteria for daily trading volume and market capitalization, which eventually could be removed from the TASE. They would join about 100 companies that already have been ejected from the exchange over the past three years. While the ISA is primarily a regulator, it is also working to expand the stock market, increase liquidity and widen the investor base. "We are striving to create a bigger, more transparent, varied, and developed market, like in the United States," said Tery. As such, the government has introduced several new financial instruments, including money market funds, funds of funds, and commercial papers. Money market funds are mutual funds that invest in short-term money securities such as bonds; commercial papers are short-term bonds; and funds of funds are funds that invest in other funds rather than directly in financial instruments such as shares. In addition, from January 1, Real Estate Investment Trusts (REIT), which are designed to allow investors to share the ownership of a group of income-producing properties, will be available to Israelis. While all these financial instruments are new to the Israeli markets, they have existed outside of the country for many years. "We aren't inventing anything. What exists in the world, we are introducing here," said Tery. His attempts to expand the capital markets also includes urging large Israeli companies that are listed abroad but not on the TASE to list on their home exchange. "I told them, 'we need you.' It is purely to their advantage to be dual-listed - it doesn't hurt them. I don't understand why they aren't listed in Israel. It makes no sense - it's purely something psychological." Tery declined to name names, but some of Israel's biggest companies are listed abroad but not on the TASE, including telecommunications billing software provider Amdocs, communications software company Comverse Technology, and Check Point Software Technologies, a developer of Internet security products. Nevertheless, Tery believes it's beneficial for companies to have a foreign listing as well as a domestic one, since it increases their liquidity and profile. The TASE has almost 700 listed companies, of which 43 also are registered in other markets, mainly London and New York. The TASE companies are worth more than NIS 530 billion combined and attract a daily average trading volume of almost NIS 1b. In addition, Israel has a bond market worth around NIS 350b., with NIS 1.3b. traded daily, and a mutual fund market worth around NIS 130b.