Israel Securities Authority chairperson Anat Guetta today presented a strategic plan for 2019-2022, against the background of a week of arrests and raids on corporate offices of a number of companies listed on the Tel Aviv Stock Exchange (TASE).
The Securities Authority's strategic plan sets out four main goals aimed at "opening the Israel capital market to new areas of investment, creating new trading platforms, enhancing competition, and making the capital technological and advanced like capital markets in other countries," the Securities Authority states.
The goals of Guetta's plan are as follows:
1. Preserving the capital market
"The Securities Authority will publish its enforcement policy in criminal and administrative matters, as well as in the private sphere. The Securities Authority will also invest additional resources in reinforcing its investigative and intelligence, supervisory, and enforcement capabilities. It will strengthen the status of watchdogs, including trustees; step up supervision of underwriters and distributors; set standards for the activity of watchdogs, such as audit committees, directors, and investment institutions; and evaluate the supervisory and enforcement tools applying to the auditors."
2. Consolidation and expansion of the public market
The announcement states that the Securities Authority "will strive to consolidate and expand the public capital market in order to make it the first and leading investment option for the general public, the concerns managing the public's money, and commercial companies in search of financing. As part of this effort, the Securities Authority will take steps to diversify investment products in the capital market, including securitization; arrange additional trading platforms, such as a secondary stock market; encourage the listing of more companies for trading; strengthen the connection with the Israeli high-tech industry and encourage its more substantial participation in the Israel capital market; increase the public's holdings in TASE-listed companies; etc.
Promoting technological innovation in the capital market
"The Securities Authority will specifically and regularly assess technological trends and developments, respond rapidly and creatively to changes in the market, and create a supporting regulatory environment for the new activities. The resulting risks will be addressed without creating unnecessary barriers to activity in Israel. As a first step, the Securities Authority has established a fintech innovation hub that is currently providing regulatory advice to technology companies developing innovative financial products. Over the past year, the Securities Authority dealt with digital assets and blockchain technology. At this stage, digital assets feature high volatility and many risks. The Securities Authority will therefore continue assessing the matter in order to protect investors, but will also allow the sector to grow for the benefit of the industry and the Israeli economy. The Securities Authority will also take the lead in innovation in general, especially in fintech, in the realization of the benefit provided by this sector for investors, the strength of the capital market, and economic growth in Israel. The Securities Authority will consider removing regulatory barriers to fintech and supervision of it by encouraging regulation tech and supervision tech."
4. Promoting competition in the capital market
"The Israel capital market features a high degree of concentration in financial services and management of the public's capital," the Securities Authorities' announcement states. "The banking system plays a key role in the capital market. Healthy and effective competition improves services and products for investors. Competition also encourages innovation, reduces costs for the consumer, and improves the local market's competitive capability in global markets. Competition and a large number of players also bolsters capital market stability and provides essential conditions for proper activity, such as liquidity and price discovery. Competition is therefore essential to the existence of a stable, active, and sophisticated capital market.
"The Securities Authority will promote competition in the capital market in order to make it more efficient and accessible to the public, and to make it attractive in global markets. As part of this effort, the Securities Authority will safeguard competition for investors - the end consumers. The Securities Authority will make sure that the relevant information is available to the public, thereby facilitating comparison of services and products, while allowing simple and easy switching between services. The Securities Authority will ensure that regulation does not pose excessive entry barriers, and that companies do not take advantage of their size, access to information or customers, and being first in the market to keep other players out of the market. Among other things, the Securities Authority will encourage new financial and digital intermediaries in order to bolster competition in brokering and distribution of mutual funds in Israel."
"Strengthening the market makes the economy go," Guetta said. "That is the underlying principle of the Securities Authority's strategic plan that will guide its actions in the coming years. I am convinced that developing and strengthening the Israeli public capital market is in the national interest. Above all, the public capital market is designed to serve investors and the local economy. We are committed to opening the local capital market up to the world, to expanding it, and to making it a technological, advanced, and competitive capital market. We will preserve fairness in the capital market, which is an essential condition for winning investors' confidence and causing them to choose our market."
Published by Globes, Israel business news - en.globes.co.il - on February 25, 2019
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