119 on a “major” foreign exchange, and incorporating an SEC assessment of foreign regulatory robustness. The SEC has not indicated timing for any proposed rulemaking. In addition, in December 2025, the US Congress enacted a law to end the long-standing FPI exemption from Section 16(a) beneficial ownership reporting obligations for directors and officers of public companies. Importantly, SEC Chairman Paul Atkins has indicated that the SEC is considering exempting Israeli companies from planned tightening of the FPI rules, which would allow the vast majority of Israeli issuers to continue operating under established regulatory accommodations. This potential exemption reflects Israel’s strong existing regulatory framework for capital markets and the long-standing track record of Israeli companies in the US public markets. Corporate Governance Considerations Generally, FPIs are permitted to opt out of most NYSE and Nasdaq corporate governance requirements and may instead follow home-country practice. These companies must publicly disclose the ways in which their corporate governance practices differ from those followed by US domestic issuers. Additionally, under the Israeli Companies Law, Israeli “public companies,” which include those with shares listed on the NYSE or Nasdaq, are required to appoint at least two external directors. If such companies do not have a controlling shareholder (as defined in the Companies Law), they may (but are not required to) elect to opt out of the requirement to maintain external directors and certain board committee composition requirements. Board Independence US domestic companies are required to have a board composed of a majority of independent directors within 12 months of listing. Most issuers have a majority independent board at time of listing. FPIs may opt out of this requirement and apply home-country practice. As noted above, Israeli companies are required to have at least two external directors unless they are eligible and so elect to opt out of this requirement. Audit Committees FPIs are required, just as US domestic companies are, to have an independent audit committee that meets the requirements of Exchange Act Rule 10A-3. Audit committees under NYSE and Nasdaq rules must: » Be composed of only independent directors. » Have at least one audit committee financial expert. Both US domestic companies and Israeli FPIs are required to have audit committees composed of at least three directors. If an Israeli company has not opted out of the audit committee composition requirements under the Companies Law, its board would also be required to include all external directors and be chaired by an external director. The board chair as well as directors or affiliates of any controlling shareholder(s) should not serve on the audit committee. Under the Companies Law, the board of an Israeli public company must also appoint an internal auditor recommended by the audit committee. Other Committees US domestic companies are required by both the NYSE and Nasdaq to have (i) a compensation committee and (ii) a nominating and corporate governance committee, each composed of independent directors. Generally, each of these committees consists of three directors. FPIs may opt out of these additional committee requirements and apply home-country practice. “Israel’s strengths in technology, artificial intelligence, defense technology, and life sciences align closely with the sectors expected to drive US capital markets activity.” US — CAPITAL MARKETS
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