May 16 2017
ISA Chair Professor Shmuel Hauser: “The MOUs are a significant expression of trust in Israeli regulation and its conformity to international standards, and create access for Israeli firms to new markets.”
The ISA signed yesterday two memorandums of understanding (MOUs) on collaboration with European financial market regulators. The first MOU, signed with the UK FCA, establishes principles for cooperation, consultation, and exchange of information regarding FCA's approval for prospectuses filed by Israeli issuers. According to the agreement, Israeli prospectuses, after including a series of additional details, may be filed in the UK. The second MOU, signed with the German BaFin (Bundesanstalt fur Finanzdienstleistungsaufsicht) sets down principles for cooperation, consultation, and exchange of information concerning filing Israeli-issued prospectuses in Germany and filing German-issued prospectuses in Israel.
In July 2015, after an assessment performed by the European Securities and Markets Authority (ESMA) and the ISA in response to an amendment to the European Directive and changes in Israeli regulation, ESMA issued a decision that it recognizes Israeli regulation covering the contents and format of prospectuses under the Securities Law. The significance of the decision is that Israeli prospectus, with the addition of a series of additional information, may be filed in EU countries for the purpose of listing an Israeli company in an EU exchange, according to specific collaboration agreements in place with European regulators.
Signing the MOUs with the British and German authorities is part of the program to implement the ESMA decision by signing agreements with individual EU regulators on mutual recognition of prospectuses.
According to the MOU signed with the FCA, Israeli issuers whose securities are listed for trade in Israel before filing an application for listing with the UK authorities, or Israeli issuers who file applications for listing concurrently in both countries, may file a prospectus (after approval by the ISA and inclusion of the additional information defined in the ESMA decision) with the relevant UK agencies for listing in a regulated market in the UK.
The MOU signed with BaFin represents mutual recognition, and facilitates filing of Israeli-issued prospectuses in Germany (provided that the issuer’s securities are listed for trade in Israel, or that applications for listing are filed concurrently in both countries), and filing of German-issued prospectuses in Israel, subject to the terms of the MOU.
This step establishes the status of Israeli regulation and its conformity to international standards, reflects an expression of trust in Israeli regulation, and grants Israeli companies access to new markets, creates international exposure, and expands their potential investor base.