Dear Colleagues and Clients,

On February 1st, 2021 the Israel Securities Authority published a short guide, which summarizes the registration and ongoing requirements that apply to non-Israeli corporations that wish to act as “Underwriters” in Israel.

The Israel Securities Law, 1968 (the “Securities Law“) defines the term “Underwriter” as “an entity that took an Underwriting Obligation”.

The term “Underwriting Obligation” is defined as: “an obligation to purchase securities that are offered pursuant to a prospectus: (1) if such securities are not purchased by the public; or (2) for the purpose of selling such securities to the public”.

In essence, the Israeli regulation that applies to “Foreign Underwriters” (non-Israeli corporations that are entitled to serve as Underwriters in Israel), relies on the regulation that applies to their activity outside of Israel. As such, Foreign Underwriters (and entities that wish to become Foreign Underwriters), are exempt from many of the prerequisites and ongoing requirements that apply to Israeli Underwriters. Consequently, the standard registration process for Foreign Underwriters usually takes between four to six weeks. In addition, the ISA is entitled to exempt Foreign Underwrites from all or part of the applicable reporting requirements.

The ISA’s guide lays out the registration process and ongoing obligations of Foreign Underwriters in a summarized and practical manner.

The recent surge of IPOs on the Tel-Aviv Stock Exchange, along with the rising popularity of the “book building” allocation method (as opposed to the previously dominant “Dutch auction”), and the possibility to cross-list securities without triggering local prospectus and ongoing reporting requirements, present an opportunity for global underwriters.

For the ISA’s Guide >> click here

Our firm has extensive experience in advising Foreign Underwriters and we are happy to assist with any advice on this issue.

Corporate, Securities and Capital Markets

Herzog Fox & Neeman