We would like to bring to your attention, that on February 6, 2025, a joint task-force that includes members from the Bank of Israel’s Markets Department, the Accountant General’s Department at the Ministry of Finance, the Israel Securities Authority and the Tel Aviv Stock Exchange published a call for proposals in connection with their initiative, to evaluate developing and advancing a repo market in Israel. This task force invites the public to submit comments on key issues in connection with repurchase transactions (repo).

Repo Transactions are agreements that involve a transfer of cash by one party, in return for collateral in the form of a security, typically government bonds or other low-risk assets. In a repo transaction, the party transferring the security sells it to a counterparty, with an agreement to repurchase it at a redetermined date, making it effectively a sale and repurchase transaction of the security.

The task-force is interested in hearing public opinion on how the development of the repo market can improve financing and liquidity options, particularly in the context of Israeli government bonds, as well as its impact on local and international participants. Points that may be covered by public comments include identification of barriers such as legal, technological, operational, tax, and suggestions for solutions.

Repo transactions are a key financing tool in developed financial markets; however, in Israel, the repo market remains relatively small, with a low volume of local transactions. The growth of this market could increase the local financial sector’s marketability and liquidity as well as foreign investors’ access to the local capital market.

Responses to the request for proposals will be accepted until March 13, 2025.

For the publication>> click here.

Our Banking and Finance Department has been assisting many clients in entering into repo agreements, both in Israel and with foreign entities, particularly since March 2020, at the height of the COVID-19 pandemic.

We welcome this initiative and sees great importance in promoting repo transactions.

You are welcome to contact us to discuss your comments and forward them to the relevant authorities.