Client Update | Prohibition Against Trading Foreign Securities - General Permit Conditions according to Section 49A

CLIENT UPDATE

Prohibition Against Trading Foreign Securities: Limited Permit Conditions under Section 49A – Draft for Public Comment

Dear Clients and Friends,

Following our Client Update of November 9, 2017 (to view the client update – click here), the Israeli Securities Authority ("ISA") has published a draft for public comment regarding the policy of granting permits to global exchanges and broker-dealers who wish to provide services to the Israeli public.

According to the Securities Law, it is illegal to offer securities-trading services through a securities trading system not managed by a licensed exchange in Israel. However, the Chairman of the ISA is authorised to grant a permit, subject to certain conditions.

On June 10, 2018, the ISA published a draft for public comment, regarding the conditions pursuant to which a general permit may be issued under Section 49A of the Securities Law. In the draft it is noted that there are different conditions that apply to exchanges and to other entities wishing to offer securities-trading services.

A permit to exchanges or anyone acting on their behalf – the wording of the proposed permit reflects the same conditions as set out in previous pre-rulings issued by the ISA. It is important to note that even exchanges that have previously applied to provide services in Israel and whose applications have been approved by the ISA, must reapply in order to obtain the permit.
Broker-Dealers Permit – according to the ISA's position, broker-dealers must apply for a permit, whether they wish to provide services to the general public or to qualified investors only.

To view the full draft (in Hebrew) – click here.

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Our firm assists a number of Israeli and overseas companies and has considerable experience regarding this issue.

Please do not hesitate to contact us should you wish us to examine whether your activity could be regarded as offering securities-trading services that require a permit, or if you have any questions or require any clarification regarding the draft and its implications.

Sincerely,
Herzog Fox & Neeman

KEY CONTACTS

Ilanit Landesman-Yogev | Partner
Head of Capital Markets and Securities Department
Tel: +972 3 692 2091
landesmani@hfn.co.il

Liat Maidler | Partner
Capital Markets and Securities Department
Tel: +972 3 692 2871
maidlerl@hfn.co.il

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Herzog Fox & Neeman, Asia House, 4 Weizmann St., Tel Aviv, 64239, Israel, 972-3-692-2020

The information contained in this newsletter is provided for informational purposes only, should not be construed as legal advice on any subject matter and should not be relied upon as such. Herzog Fox & Neeman accepts no responsibility for any consequences whatsoever arising from use of such information. Any content in this newsletter shall under no circumstances be considered as creating an attorney-client relationship between Herzog Fox & Neeman and any party and shall remain the sole property of Herzog Fox & Neeman. No reproduction, transmission, publication or any other form of dissemination shall be permitted unless the prior written consent of Herzog Fox & Neeman has been obtained.