On June 29, 2015, the European Securities and Markets Authority ("ESMA") published its position regarding the recognition of EU of prospectuses approved by the Israel Securities  Authority ("the ISA").

In accordance with this position, companies that have received a permit from the ISA to publish a  prospectus in Israel ("approved prospectus"), shall be entitled to approach the competent authority  in each of the EU countries, in order to obtain an approval to publish an approved prospectus  (together with the complementary document) in the EU. Where an approved prospectus and a  complementary document have been approved as a prospectus by one of the EU countries, then the approved prospectus may be used in other Member States.

  1. General:
    1. In accordance with Article 20 of the Prospectus Directive ("PD"), a competent authority authorized to approve a prospectus in each one of the European Union countries, may  approve a prospectus of a company incorporated in a country which is not an EU member state ("third  country"), provided that the prospectus was approved by the competent authority in the third  country, and the approved prospectus was accompanied by supplementary information, as specified by  ESMA publications on the subject ("supplementary document").
    2. On 23 March 2011, following an assessment of the requirements of Israeli laws and regulations on prospectuses, and a comprehensive comparison was made as  between the Israeli requirements and the EU requirements, ESMA published a statement setting out its view on prospectuses prepared according to Israeli laws and regulations.  In ESMA’s view, a prospectus prepared according to Israeli laws and regulations, together with a  supplementary document containing the information set out by ESMA, could constitute a valid  prospectus under the PD for the purposes of its approval by the home competent authority of a  Member State.
    3. On March 20, 2013, in accordance with changes in the regulatory framework of the PD, ESMA  published an opinion which outlines a framework for the recognition of prospectuses approved by a  third country, by the competent authority of an EU member ("recognition document of a third country  prospectuses").
    4. As stated above, on June 29, 2015, ESMA published an assessment regarding the regulatory  regime in Israel in connection with the publication of a prospectus (this publication  should  be   read  together  with  the  recognition  document  of  third  country prospectuses).
  2.  ESMA's outline in relation to recognition of EU countries in a prospectus approved by the ISA:
    1. Issuers  seeking  to make  use  of  this  arrangement  should  file  their  application  to   the competent authority in the home Member State. The application should be accompanied by a written  confirmation from the issuer that its third country prospectus has been prepared in accordance with  the legislation of the third country and attach the supplementary document to the prospectus. The  competent authority can, if satisfied that the requirements have been met, approve the third  country prospectus, together with the supplementary document, as a prospectus under the PD.  However, nothing under this framework prevents a competent authority from requiring an issuer to  include additional or modified disclosure relating to the information in the supplementary document  and the third country prospectus on a case by case basis, in accordance with the EU prospectus regime.
    2. Where a third country prospectus and a supplementary document have been approved as a prospectus under the PD, the PD approved prospectus may be used  in other Member States. However, the third country prospectus on its own would not be capable of being 33737 - 2591612/2 used.  It  should  be  noted  that  the  arrangement  does  not  address  the  dual registration procedure.
    3. The information which Israeli companies will be required to include, as part of the supplementary document, includes the following:
      1. a summary of the prospectus In accordance with the formula set out in the PD; 2.3.2.   balance sheets covering the latest 3 financial years and the audit report in respect of  each year;
      2. legal and arbitration proceedings: including a negative statement, if applicable;
      3. Details regarding risk factors that are material to the securities in order to assess the  market risk associated with these securities;

For the full version of the position - click here