In July 2017, Amendment 63 to the Securities Law, 5728 – 1968, concerning the restructuring of the stock exchange, came into effect.
Amendment 63 prescribes that it will no longer be possible to offer securities trading services through a trading system being operated by a non-licensed entity, i.e. a system not managed by a stock exchange licensed to operate in Israel. This is a sweeping provision that does not specify any exceptions to the application. Neither does it differentiate between sophisticated customers and "regular" customers.
According to Amendment 63, entities who wish to offer securities trading services through a trading system managed by a foreign exchange must submit applications for a permit to do so to the chairman of the Israel Securities Authority.
Amendment 63 came into effect without transitional provisions being issued to entities already offering trading systems other than through the Tel-Aviv Stock Exchange, and there is some ambiguity about these entities' ability to comply with the provisions of the law.
Entities who wish to continue offering securities trading systems managed by a foreign stock exchange should seek legal counsel about the provisions of the law and about obtaining a permit from the chairman of the Israel Securities Authority.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
