The Israel Securities Authority and European Securities and Market Commission (ESMA) have reached agreement for ESMA recognition of Israeli regulations on prospectuses of companies. From now on, Israeli issuers may list their prospectus for shares on any EU regulated market, on the basis of a prospectus drawn up in accordance with Israeli regulation, with the addition of a ‘wrap’ which contains a number of supplementary disclosures.
This is the first time that the ESMA, which regulates markets in the EU, recognizes prospectus approved by the regulators of a non-EU country.
Securities Authority chairman Zohar Goshen said, "The Israeli market has today taken an important step forward in facilitating the access to funding for Israeli firms in Europe. We continue to place great importance and value on the effective regulation and supervision of prospectuses as a key means of increasing investor confidence and greatly welcome this development and the close dialogue we have had with ESMA which has ensured greater understanding of our regulatory regime."
The agreement gives Israeli companies exposure to a wider set of investors. It will also ease the process by which Israeli issuers may list on one EU regulated market and then apply that listing to other markets across the EU. EU retail investors will also benefit from a wider offer of securities.
"Globes" spoke with Securities Authority international affairs department head Yael Almog about the agreement with the ESMA.
What is the significance of this agreement?
Almog: "This is a major breakthrough. Israeli companies can now take a prospectus approved in Israel and submit it to the regulator in an EU country where it wants to issue."
Is the dual-listing procedure similar to the procedure for Nasdaq?
"We're not talking about dual-listing as on Nasdaq, where we are subordinate to US regulations, but an agreement that our regulation is recognized in Europe. We therefore see this agreement as a major achievement at both the declarative and reputation level. Israel is the first country recognized as an equivalent state with a regulatory system that protects investors. We've received an EU standard for securities regulation and disclosure in Israel.
ESMA vice chairman Carlos Tavares said, “The important work to develop a framework for third country prospectuses highlights ESMA’s strong commitment to harmonized application of the Prospectus Directive in a consistent manner across Europe."
Published by Globes [online], Israel business news - www.globes-online.com - on March 23, 2011
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