Will a second stock exchange be established in Israel? – Capital Market

The Ministerial Committee on Legislative Affairs has approved a government bill aimed at amending an old law; The proposal relates to the establishment of a designated stock exchange in Israel by removing barriers, including easing the conditions for registering on the stock exchange. This is a move that may constitute significant competition for the Tel Aviv Stock Exchange and at the same time it will allow institutional entities and investors to expand their range of investments.

The bill also addresses the expansion of the powers and tools of the Securities Authority, including the addition of layers of protection for the investing public to reduce and hedge risks.

The bill deals with three main issues: Increasing the powers of overseeing underwriters and distributors; Giving authority to determine the conditions for making offerings without a specific activity and designation in exchange for the issues, and giving authority to the Authority to establish new trading platforms. The bottom line is that the purpose of the proposal is an option for a quick response to the intensive changes that are taking place in the capital market. In addition, amending the law will give the authority many powers, such as: Authority to grant a license to open trading platforms that are not in the Tel Aviv Stock Exchange indices, and are intended for the strongest players in the market, including banks, insurance companies and more.

The proposal gives the Authority the authority to set conditions for the issuance of securities of corporations without business activity or assets, Those who wish to raise funds from the public without determining at the date of the issue a specific use for the issue funds. In such issues, there is no known or defined purpose at the time of the issue for the proceeds of the proceeds or the corporation does not have any business activity or assets at that time. In this state of affairs, the Authority seeks to increase the tools for the protection of investors beyond the proper disclosure tools, in the absence of business activity for which disclosure can be made.

The bill is intended to update the existing legal situation, among other things, in light of the impact of the technological developments that characterize trading in the world’s leading capital markets. These include examples of trading platforms with special characteristics, such as: conducting trading activities digitally using innovative technology or limiting dedicated trading activities to sophisticated investors only.

Minister of Finance, MK Israel Katz“After I set out to promote the establishment of another stock exchange, today we took an important step in which the Ministerial Committee for Legislation approved the opening of another stock exchange, which will be of great value to the Israeli economy, especially against the background of the corona crisis.” “Towards the regulation that is accepted in the rest of the countries of the Western world, and will promote capital and debt raising of small businesses from those that are commonly issued on the stock exchange. I will continue to work all the time to launch the economy and rapid growth.”

Chairman of the Securities Authority, Anat Guetta: “Along with the welcome increase in capital market activity, we are constantly on the pulse to update and tighten the basket of supervisory tools to safeguard the interests of the investing public. The Authority is aware of what is happening and is in continuous dialogue with the market, in places and intersections that require our involvement. “The parties involved in the offering act in accordance with the law to protect investors. The bill will provide the authority with the tools to hedge the risks that characterize Spock prospectuses – our goal is to build investor protection mechanisms and set a high and stringent threshold for entrepreneurs to reduce the risks involved in these issues.”