The Israeli Securities Authority ("ISA") has published a draft for the public’s comments regarding Bill regulating Broker-Dealers activity.
Brokerage activity in Israel, as well as the activity of dealers who do not operate as Trading Platforms (as defined in the Securities Law), is currently not supervised and regulated and create a significant regulatory gap.
The purpose of this Bill is to protect the Israeli investors, who use Broker-Dealer services, and to increase the public's trust and encourage competition between those service providers.
The Bill proposes to enact a special law aimed to regulate the broker-dealer sector in Israel and subjecting the entities engaged in this activity to the supervision of the ISA. As part of this draft law, there is a distinction between three types of activities: (1) brokerage activity; (2) dealer activity; and (3) the activity of a Stock Exchange member who carries out transactions in securities for himself only. It is proposed that the activities described above will require a dedicated license from the ISA.
It is important to emphasize that in our understanding, the Draft Bill not a substitute for the brokers obligation to apply to the Chairman of the ISA for a permit under section 49A of the Securities Law. To view the client updates with regard to Section 49A – click here.
Comments to the Draft Bill may be submitted by September 26, 2018.
The Draft Bill, should it pass, shall have significant consequences not only to Broker-Dealers, but also to various service providers and those who conduct business with such.