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The ongoing operations of all the market players, including the ISA and TASE, are
regulated by an extensive body of laws, rules and regulations, the most important being
the Companies Law 5759-1999 and the Securities Law, 5728-1968 (“Securities Law”).
Dual Listing
The Securities Law provides a simple process for dual listing of both Israeli and non-
Israeli companies whose shares are traded on NYSE, NASDAQ and LSE. There are
currently 56 dual listed companies that include Israeli and U.S. companies such as Teva
Pharmaceutical Industries Ltd., Elbit Systems Ltd., Nice Ltd., Matomy Media Group Ltd.,
and many more. Pursuant to the Securities Law, dual listed companies are not subject to
the reporting requirements promulgated by the Securities Law and they are allowed to
publish the reports in the same form, substance, language and time as is required by the
rules and regulations of their main stock exchange.
Offering by Foreign Companies
In recent years the main IPOs and other fundraising was of debt securities. Of the 15
offerings during 2015, 9 were of bonds. Another recent phenomenon of the Israeli
market is the raising of debt by foreign real estate companies, who are issuing bonds
secured by liens as well asmortgages over property located outside of Israel. The appeal
of the Israeli market owes much to the low interest rates and the popularity of bond
issuances in general. This trend materially increased during 2015 and the first quarter of
2016. However, due to the collapse of one of these companies, which raised questions
as to the proper disclosure included in its offerings documents, this trend has slowed
dramatically.
Regulatory Reforms
The regulatory regime in Israel is extensive, excessive and intrusive. For example, a listed
company must adopt a remuneration policy that must be approved by the minority non-
controlling shareholders every three years and the terms of employment of its CEOmust
generally be approved by theminority shareholders. In recent years, it was recognized by
the regulatory authorities that excessive regulation may impair the capital market and
therefore they prescribed regulatory exemptions and reliefs that would apply to listed
companies, for example:
Initial Public Offering
The ISA has adopted measures to help companies significantly reduce corporate
governance requirements for listed companies. These measures include for example:
giving priority to IPO's prospectuses in the ISA review process; allowing meetings with
qualified investors (preliminary road show) before starting the IPO process ("testing
the waters"); relief from the approval of the remuneration of officers and controlling
shareholders.
R&D Companies
At the end of 2015, the Law to Promote Investment in Companies Operating in the
Elite Technology (High-Tech) Industry, 5776-2015 was passed, which determined
arrangements and concessions designed to encourage technology companies to list
their shares on the TASE and enable them to use various forms of capital raising (private
and public) in Israel and abroad. These concessions include allowing small companies
(as described below) to use U.S. Generally Accepted Accounting Principles (U.S. GAAP)
as their accounting method; permitting R&D companies to publish their prospectuses
and reports in English; providing exemption from the requirement to publish quarterly
financial reports and tax incentives.