Yesterday (Monday), the Knesset Finance Committee approved regulations for the establishment of high-tech funds, which will invest in Israeli high-tech companies, including companies not traded on the stock exchange. According to the announcement published by the Israel Securities Authority, this move is aimed at injecting Israeli money into a sector mainly financed by US funds.
<p>These will be closed-end mutual funds, units in which will be tradeable on the stock exchange, unlike private venture capital funds which are only privately-owned and are not open to the general investor public. The funds will be required to make an initial raise of hundreds of millions of shekels, for which they will be able to request state guarantees. In addition, it seems that the fund's manager will be obliged to control at least 5% of the fund's units.
<p>Moreover, high-tech fund managers will be subject to obligations beyond those pertaining to all fund managers, including special regulations regarding the valuation of the non-tradeable assets held in the fund; additional details to be included in a high-tech fund prospectus; various disclosure requirements in the fund's annual and monthly financial statements; and mandatory immediate reporting of various incidents related to the fund.
<p>Minister of Finance Moshe Kahlon said, "The establishment of mutual funds focused on high-tech will encourage the investment of Israeli capital in high-tech companies, present an alternative to the bank credit funding the business sector, create competition among sources of capital, boost employment and economic growth, and provide attractive investment alternatives. The funds will represent an important tool for increasing trading in stock exchange listed companies, which will also boost trading turnover."
<p>Israel Securities Authority chairman Prof. Shmuel Hauser said, "This is a further step in a series of moves to encourage the operation of high-tech companies in Israel, recently approved in the Knesset. Establishing the funds will help promote high-tech as the Israeli economy's growth engine and encourage capital raising via the stock exchange, helping Israeli high-tech companies to keep their core operations in Israel."
<p><em>Published by Globes [online], Israel business news - <a href=" http://www.globes-online.com ">www.globes-online.com</a> - on August 9, 2016</em></p> <p><em>© Copyright of Globes Publisher Itonut (1983) Ltd. 2016</em></p>