In recent years, foreign companies in Israel have experienced many issues regarding bonds. According to the amendment to the Securities Law, which become effective in late January 2016, similar corporate governance rules applicable to Israeli companies that offer bonds will be applied to foreign companies.
Up until now, there was no formal application of the provisions of the Companies Act on foreign companies that issue bonds, but in practice, we have seen many times that the issuing companies have committed themselves to uphold many of the provisions of the Companies Act. Now, the issue will be regulated by law.
The amendment also extends the list of provisions that apply to foreign companies that issue shares in Israel. Provisions were added to the list regarding the Financial Statement Review Committee, mandatory appointed Chairman of the Board, the Securities Authority's power to impose monetary sanctions, the provisions regarding the process of settlement or arrangement and more.
To see the amendment to the Securities Law (in Hebrew), click here.
This amendment is of great significance to companies incorporated abroad that are considering issuing shares in Israel (including public offerings) and / or issuing certificates to the Israeli public. The underwriters and placement consultants should also be aware of this new amendment.