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The Committees on Digital Asset Trading and Clearing Settlement Platforms and Supervised Investments in Digital Asset

21 June 2021

Dear clients and colleagues,

The Israeli Securities Authority (“ISA”) Chairwoman, Anat Guetta, appoints two Committees – the Digital Asset Trading and Clearing Settlement Platforms (“DAT”) Committee and the Supervised Investments in Digital Assets.

The DAT Committee, which will be headed by ISA’s chief economist Ilan Gildin, will study and analyze the features of digital asset investment products, perform a comparative review of the relevant legislation in developed countries, and recommend an outline of regulatory policy on these investment products. By doing so, the DAT Committee will aim to strike a balance between protecting individual investors and encouraging the innovation and diversification of investment products. The Committee was appointed directly following the work of the Committee to Examine the Regulation of Decentralized Cryptographic Currency Issuance (ICOs) to the Public, whose recommendations were published on the ISA website.

The Digital Markets Committee, which will be headed by Asaf Erez, who currently heads the trading platforms unit, will focus on promoting securities clearing and settlement services in Israel’s digital markets. At the same time, there is a growing need to increase the certainty surrounding the regulation of new securities clearing and settlement systems that will provide services to various types of trading systems, and particularly services to the special-purpose stock exchange to be established in the future. According to ISA, the introduction of Distributed Ledger Technology (“DLT”) may trigger a significant change in clearing and settlement procedures, and in the identity of the entities in charge of various clearing and settlement functions. Certain stages in the clearing and settlement mechanism may be reduced or even become redundant. Therefore, the Digital Markets Committee will evaluate possible models for the design and regulation of DLT-based clearing and settlement systems. Furthermore, the committee will analyze the advantages of using “digital shekels” (CBDC) to ensure safe, rapid DvP settlements. The Committee will also examine the challenges to clearing and settlement principles that each model poses, and explore practical solutions for resolving these challenges.

Developing the regulatory infrastructure applicable to new trading and settlement platforms may also be an excellent opportunity to integrate Israeli FinTech startups into the local financial services industry, which will have a positive impact on the Israeli capital market, both in terms of the cost of financial services and diversification of products and service offerings.
This publication joins a number of other initiatives of the ISA in these areas, including:

  • The report of the committee on promoting and institutionalizing digital markets in Israel;
  • Publication of the memorandum of law regarding a designated stock exchange;
  • Publication of a call for proposals inviting entrepreneurs to present proposals for the establishment of digital platforms and the inclusion of the issue in the pilot program in the field of FinTech;
  • Publication of a legal position regarding exemption from the stock exchange licensing obligation (available only in Hebrew).


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Our firm has a dedicated team that accompanies, among others, trading platforms, brokers, investment advisers and FinTech platforms, in proceedings before the ISA and other regulators.
We are at your disposal for any questions.
Herzog Fox & Neeman

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