Tehran Stock Exchange History


The Tehran Stock Exchange (TSE) is the Middle East’s largest and most important exchange. Established in 1967, the TSE is considered one of the oldest exchanges in the entire region.

This section will go over the history of the Tehran Stock Exchange and provide an overview.

Overview of the Tehran Stock Exchange

Tehran Stock Exchange (TSE) is the largest stock exchange in the Middle East, founded on February 9th, 1967. As a wholly owned subsidiary of the Iran Fara Bourse (IFB) Organization, it is responsible for providing means for financing enterprises and managing and privatizing public companies as established by the Iranian government.

In addition to trading in stocks, TSE is also devoted to derivatives trading; and promotes capital guarantee funds, asset management companies, and venture capital funds.

The Tehran Stock Exchange offers many markets, including primary, secondary, and tertiary markets. It enables trading shares in listed companies and other asset classes such as commodities, exchange-traded funds (ETFs), and mutual funds. The primary market is managed by Authorized Securities Exchange Brokers (ASBEs), while trades are executed through the Automated Order Book System (AOBS). The secondary market is composed of individual transactions between brokers daily.

With its goal of internationalizing the Iranian stock market and raising investor confidence by introducing homegrown solutions that meet international standards, Tehran Stock Exchange has invested heavily in cutting-edge technology to help facilitate accurate pricing without bias or margin erosion from traditional methods. It has also opened up opportunities for private investors worldwide to access these markets through brokerages and clearing houses such as Gostar Darou, a subsidiary of the Tehran Stock Exchange that focuses on expanding international participation in Iranian financial markets.

History of the Exchange

The history of the Tehran Stock Exchange dates back to 1936 when the stock market in Iran was first established with the help of a group of merchants at Serah-e Jomhuri Street in Tehran. This first exchange was known as “Anjoman-e Tse” (The Exchange Assembly). It operated under the supervision of the Iranian consulate in Paris and performed activities such as securities trading, order matching, and conducting market data analysis.

In 1956, after many years of gradual growth, the Anjoman-e Tse was dissolved and replaced by a state-controlled organization that would more accurately reflect the needs of a modern economy. This new entity was called “the Tehran Securities Exchange Organization” (TSEO), which still exists today as the main regulatory body for securities trading on Iran’s stock market.

Since its inception, TSEO has introduced numerous reforms to encourage public participation in capital markets. In 1969, it changed its name to Tehran Stock Exchange (TSE) and began offering itself as a public organization rather than its previous government-controlled system. Initially, TSEO launched the Iranian state stock index titled “TEPIX” but eventually developed more indices showing various segments within capital markets, such as:

  • Oil & Gas companies index – OGTEX
  • Banking Sector Index – BSE
  • Industrial sector index – IFX

Through its proactive stance towards licensing requirements for broker-dealer firms, listing requirements for companies, offering financial services, etc., TEPIX has become one of the most well-known exchanges domestically and among international investors.

Pre-Revolutionary Period

Before the Iranian Revolution of 1979, the Tehran stock exchange was the largest and most active in the Middle East region. Home to several banks, financial institutions, and investors, the market witnessed considerable growth in the 1970s.

The pre-revolutionary period of the Tehran stock exchange was characterized mainly by the emergence of new companies and a surge of foreign investments.

Establishment of the Exchange

The establishment of a stock exchange in Iran dates back to the late 19th century. The Pre-Revolutionary period was when foreign investments were actively sought, and foreign capital and technology were brought into the country.

In 1872, with assistance from Belgian brothers Gustave et Arthur Molitor, The Imperial Bank of Persia (now Bank Melli Iran) opened its doors to customers. This move created the foundation for a growing financial infrastructure in Tehran.

In 1876, Gosta Viktorsson – a Swedish explorer and entrepreneur – established The Imperial Iranian Company (IIC), which brought other foreign investors in and capitalized on the improvement of several industries. In the same year, The Persian Tobacco Revenues Administration (PTRA) was formed by an English concession seeking monopoly rights over growing and selling tobacco products within Iran; later, it became known as The British Tobacco Company (BTC) in 1890 after extending its monopolistic concession until 1933.

Several decades later, further developments helped shape Tehran into a legitimate financial center. Seeking better public access to funds for government-led investments in infrastructure projects and increased regulation to protect investors’ interests, the first stock exchange of Persia was established in Teheran on April 4th, 1927, under royal decree number 759 issued by Reza Shah Pahlavi – Emperor or King of Iran from 1925 until 1941 – through his minister Mostowfi Ol-Mamalek.

Early Trading Activity

The early stages of stock exchange trading in Tehran took place on a small scale within local communities. Early trades were mostly verbal agreements in which individuals met to purchase and sell privately-held companies, bonds, and other investments. At this time, the lack of an efficient centralized trading system meant that these kinds of limited trades took place irregularly solely based on sellers’ or buyers’ platforms or connections.

In the late 1800s, a formal stock exchange was established in Persia, as it was then known. This modernized version featured regulated pricing with standardized rules and regulations for trading activity across the region. By the early 1900s, many existing banks set up official departments for dealing with stocks and other financial instruments, helping to bring commercial banking activity into the mix.

At this stage, transactions were only limited to Tehran’s local businesses and did not become too internationalized due to restrictions imposed by foreign governments against Persian citizens purchasing assets abroad. As a result, local investors made up almost all of those investing in Persian stocks at this time and had little interaction with foreign markets. However, such interaction could have potentially offered more exposure to global stock market trends than investors within Iran’s borders by themselves had access to at that time.

Post-Revolutionary Period

After the Iranian Revolution of 1979, the Tehran Stock Exchange had to face many financial and political changes. During this time, the Iranian government significantly influenced the stock market. As a result, many foreign companies also withdrew from the stock market. Additionally, the Iranian capital market went through a turbulent period.

This section will look at the Tehran Stock Exchange during the post-revolutionary period.

Economic Reforms

In the post-revolutionary era, the Tehran Stock Exchange was used as a tool of economic policy. Financial liberalization measures such as creating state-run banks and other reform efforts were implemented to promote financial inclusion to jumpstart the economy and increase capital in the country. In addition, financial instruments such as treasury bills and public bonds listed on the exchange helped create a new class of secondary bonds and stocks that could be traded.

The introduction of state-owned banks, market liberalization measures, reduction of barriers to entry, and implementation of higher legal framework standards, combined with an established banking sector, encouraged investors and companies to take advantage of investment opportunities both inside and outside Iran via trading activities at TSE. In addition, economic Reforms aimed at promoting investment in TSE, such as improved market regulation since 1982, have also aided in its success. Due to these reforms, Foreign Direct Investment (FDI) has rapidly increased, making it one of the few major exchanges to host international FDI share offerings during this period.

The Tehran Stock Exchange also attempted to modernize its systems toward creating a legitimate market infrastructure. Establishing an automated trading system (ATS), capital adequacy regulations, and increased transparency have been instrumental in paving the way for greater foreign participation in Iranian listed securities and growth through an integrated stock exchange infrastructure system in Iran.

Expansion of Trading

The Tehran Stock Exchange has a long history that reflects the turbulent times of Iranian society. The exchange, founded in 1936, initially only traded shares through one trading member within a limited range. However, in the post-revolutionary period, the exchange expanded rapidly, allowing trading to become truly public by the 1980s.

In 1983 the Tehran Stock Exchange Rules and Regulations (TSERR) was implemented to provide a governance structure, protect investors and encourage orderly activity. According to these regulations, larger companies listed on the exchange began making their initial public offering during this period. Moreover, stock prices began to be regulated by market conditions – a practice first devised in European marketplaces during this same time – with price discovery for some stocks transferring from traditional buying/selling practices to an auction system complete with buy and sell orders made online in real-time.

To further support the transition from traditional stock pricing to a more open process tailored for foreign investment and the flow of capital into Iran’s economy, more advanced risk management techniques were added, as well as different methodologies for index construction and portfolio optimization services for investors. Additionally, derivative products, including futures contracts, have been traded since 1992 every Tuesday afternoon – allowing investors further access to protection or speculation against volatile markets within this sector of Iran’s economy. It helped foster a greater understanding of investing in Iran’s capital markets while supporting socially and economically healthy development over time.

Modern Era

Since 2000, the Tehran Stock Exchange (TSE) has undergone significant changes and developments. It includes new rules and regulations as well as technological advances in trading. As a result, companies that seek to be listed on the TSE also must meet certain criteria. Furthermore, the government has developed several programs to encourage domestic and foreign investment in the TSE.

Let’s look at some of the impacts of the modern era on the Tehran Stock Exchange:

Automation of Trading

In May 2018, the Tehran Stock Exchange (TSE) began efforts to automate its market by developing and linking the TSE Automated Trading System. This automated system was based on “Order-Driven Market” mechanisms, meaning orders entered by traders are automatically matched and recorded, enabling a more efficient and transparent buying/selling process.

The automation of trading has produced better investment access and higher liquidity. Not only have trading fees been reduced, but there are now fewer restrictions on the types of orders that can be placed. Additionally, brokers are provided with trade reports from vendors that allow for easier tracking of transactions executed on behalf of clients.

The newly implemented system is expected to reduce inefficiencies in the market and help facilitate greater capital flow domestically within Iran and from global investors interested in Iranian financial markets. Moreover, it will help boost investor confidence in the local exchange due to its increased transparency, accuracy, speed, and controls over particular ordering rules such as “Fill-or-Kill.” As a result of these improvements to market infrastructure through automation, the TSE is an attractive option for both domestic and international investors looking for a fair stock exchange with global standards.

Expansion of Trading Products

The Tehran Stock Exchange (TSE) has undergone significant developments since the Islamic Revolution in 1979. Following the privatization process that began in 1996, the TSE set out on the path of modernization and thus made considerable progress. Initially, the trading products offered on the TSE have only listed stocks, but it has now expanded its offerings to include the following:

  • Exchange-traded funds (ETFs) are baskets of securities, such as stocks and bonds, that mimic a particular benchmark index.
  • Real estate investment trusts (REITs) reflect equity investments in real estate properties.
  • Mutual funds consist of a pool of investments from different asset classes, such as stocks, bonds, cash equivalents, and other types of securities, which professional fund managers manage.
  • Options are contracts that give their owner the right – but not necessarily the obligation – to buy or sell an underlying security at a predetermined future date for a fixed price.

All these tradeable instruments help increase market efficiency through diversification and risk management opportunities brought about by improved integration with global markets. Moreover, by expanding its trading products to include more sophisticated instruments, more investors have participated in the exchange domestically and internationally, increasing short-term liquidity, stabilizing overall prices, and ensuring reasonable investment returns. Consequently, these developments have increased the financial stability of the Tehran Stock Exchange markets while preventing sharp swings in stock prices caused by excess speculation or insider trading.


The Tehran Stock Exchange has come a long way since its inception in 1967. From humble beginnings in 1967, when only one stock traded, to listing over 600 stores today, the Tehran Stock Exchange has seen tremendous growth and has become the largest of its kind in the Middle East.

This article has discussed the history and significant developments of the Tehran Stock Exchange. In conclusion, the Tehran Stock Exchange has emerged as a robust and dynamic financial exchange in the region, growing steadily and, in the process, making a huge impact on the Iranian economy.

Summary of Tehran Stock Exchange History

Established in 1967 and currently located in the center of the financial district of Teheran, Iran, the Tehran Stock Exchange (TSE) has experienced many fluctuations since its year of conception. The TSE first opened at Ray-Noor Tower with only ten companies listed and trading only four days a week. Since then, significant changes to the exchange’s legal structure and operations have been made, as well as substantial improvements in the external environment for Iranian capital markets, such as the deregulation of financial markets, privatization process, and greater access to global markets.

Today, the TSE consists of 3 leading indices – TEDPIX (indicating Tehran companies), IFX (Iran Fara Bourse Forward Index), and GIREX (indicating Iranian government bonds). In addition, over 500 listed companies on the exchange cover different sectors such as healthcare, consumer staples, consumer discretionary services, basic materials, etc. Moreover, recent reforms have increased competition amongst domestic and foreign intermediaries, such as brokers and custodians, to attract investors by offering more advanced investment products like derivative instruments. Other reforms include improved market infrastructure by introducing faster-automated trading systems and strengthened surveillance mechanisms.

Overall, despite certain restraints from current economic sanctions imposed on Iran by various countries around the globe, which makes foreign investments difficult and sometimes impossible for specific categories of investors, indicators point out that long-term prospects remain positive for this primary partner market in the Persian Gulf region’s capital markets.

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