Innovation Authority, Securities Authority team to aid fintech cos


In a NIS 6 million scheme, Israeli fintech companies will have access to the Israeli Security Authority's databases and Tel Aviv Stock Exchange trading data.

The Israel Innovation Authority previously revealed that it would invest NIS 15 million in a program for "promoting investments by local investment institutions in Israeli technology companies" in cooperation with the Israel Securities Authority. Sources inform "Globes" that the Innovation Authority and the Securities Authority are now launching a fintech program with a NIS 6 million investment. The two authorities regard this as a means of encouraging companies to develop fintech solutions, with an emphasis on the capital market.

As far as is known, the Innovation Authority, headed by CEO Aharon Aharon, and the Securities Authority, headed by chair Anat Guetta, will shortly launch a program providing fintech startups with access to the Securities Authority's databases and the Tel Aviv Stock Exchange's (TASE) trading data. The Securities Authority sees this as a way of introducing financial innovation to the Israeli capital market, while at the same time introducing technologies that will make the capital market more accessible to the Israeli consumer. The plan is designed to aid local companies in developing their products for commercialization and market penetration.

Minister of Economy and Industry Eli Cohen said in this context, "The fintech pilots program by the Innovation Authority and the Ministry of Economy and Industry, in cooperation with the Securities Authority, will enable Israeli startups to acquire know-how and improve the readiness of their product for commercialization and penetration of the local market." Guetta explained that in her opinion, "This measure connecting Israeli startups to the TASE is of national importance. It is another element in the joint plan by the Innovation Authority and the Securities Authority, which regard this connection as a strategic means of strengthening and expanding the public capital market and diversifying financing opportunities for entrepreneurs."

The Innovation Authority and Securities Authority plan to hold a meetup in mid-December with entrepreneurs and companies interested in joining the program.

The new measure comes on top of a different program launched by the Innovation Authority last week in coordination with the Securities Authority concerning ways of increasing investment by investment institutions in Israel in the technology industry, with an emphasis on local startups and venture capital funds.

On the one hand, the Innovation Authority believes that the fact that institutions in Israel, particularly long-term savings institutions, keep their distance from startup investments constitutes market failure. On the other hand, many investment institutions say that it is not their function to promote technology investments, because such investments are not in the savers' interests, and could even prove inimical to them. They further explain that investments in Israeli venture capital funds have not been as successful as expected.

The Innovation Authority and Securities Authority are aiming mainly at long-term savings concerns supervised by the Capital Markets, Insurance, and Savings Authority, headed by commissioner Dr. Moshe Barkat. These institutions currently manage over NIS 1.7 trillion, and their job is to safeguard the income of savers after retirement.

Many investment institution managers believe that investments in technology companies and venture capital funds do not meet the standards required for managing savers' money. At the same time, the Israeli technology industry wants more of the public's pension money channeled to technology sectors. They believe that this will generate good returns for savers in the long term.

With no connection to the measures now being taken by the Innovation Authority and Securities Authority, the Capital Markets, Insurance, and Savings Authority is also promoting measures to advance investment in technology sectors by financial institutions under its supervision, primarily in fintech, which can also benefit the entire sector. As part of this, the Capital Markets, Insurance, and Savings Authority is considering making regulation more permissive in order to enable insurance companies to invest more in fintech.

Published by Globes, Israel business news - - on November 18, 2019

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