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Client Update | Prohibition Against Trading Foreign Securities – General Permit Conditions according to Section 49A – Draft for Public Comment

18 June 2018

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 stock 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 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 stock exchanges and to other entities wishing to offer securities-trading services.
A permit to stock 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 stock 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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