Client updates / Capital Markets

At the end of April 2026, the Israel Securities Authority (ISA) published a new draft directive regulating the activities of licensed investment advisors and marketers when providing one-off services and services in relation to alternative assets. The purpose of the directive is to reduce information asymmetries and mitigate potential conflicts of interest identified during ISA audits that, in some instances, even resulted in enforcement proceedings.

On the eve of Rosh Hashanah, a joint task force from the Bank of Israel, the Ministry of Finance, and the Israel Securities Authority published an interim report for public comments, proposing a major reform in the way financial institutions (mainly banks, TASE members, and other players) are paid for securities services and investment advice.

Prediction markets have experienced rapid growth in recent years, thanks to the emergence of platforms attracting millions of users, such as Kalshi and Polymarket. These platforms have proven successful in predicting the outcomes of diverse events.

The Israel Securities Authority (ISA) recently published audit reports scrutinizing the activities of various investment ventures and corporations that raised funds from the public without publishing a prospectus. The reports revealed a series of failures.

Two key developments in the US mark a step toward stablecoin market institutionalization. the US Senate approved new legislation regulating activities in the market for the first time, and Circle – the issuer of the USDC stablecoin, launched an IPO on the NASDAQ.

Foreign direct investments (FDI) in critical Israeli infrastructure and services, especially by entities representing foreign countries, are subject to oversight, mainly to ensure national security.

The European Securities and Markets Authority (ESMA) recently published its final report on the guidelines for supervisory authorities to detect and prevent market fraud in crypto assets under the Markets in Crypto-Assets (MiCA) Regulation.

The Israel Securities Authority (ISA) recently published a report summarizing its findings regarding offerings of securities without a prospectus. The report is intended for entities planning to offer securities to the public and presents the ISA’s position regarding the criteria for various exemptions enabling entities to offer securities without a prospectus.

Earlier this month, the European Data Protection Board (EDPB) issued draft guidelines on the processing of personal data through blockchain technologies.

The European Union launched MiCA (Markets in Crypto-Assets) Regulation, which provides a clear and uniform regulatory framework for CASPs and is considered a global model for crypto regulation.

The AI revolution in the Israeli capital market: The Israel Securities Authority allows financial institutions to use chatbots on their financial analyses platforms, but imposes clear rules and important restrictions on their use.

For years, the crypto industry has faced regulatory uncertainty, with the Securities and Exchange Commission (SEC) relying on “regulation by enforcement” rather than establishing specific rules for digital assets. Coinbase, one of the world’s largest crypto platforms, sought regulatory clarity—but found itself facing resistance from the SEC.

As part of proceedings brought by activist shareholders of Nano Dimension, the District Court ruled that ADS (American Depository Share) holders should be treated as shareholders of the company. The significance of this ruling in Israel: boards of directors will be precluded from relying on ADSs to try and block activist shareholders’ campaigns.

Last month, the State Attorney-General and the Israel Securities Authority published their positions with regard to the overruling mechanism.
The context relates to the requirement for public companies and private companies with publicly traded debentures to adopt and comply with a remuneration policy governing the terms of office and employment of their officers.

The Israel Tax Authority and the Ministry of Finance have published a memorandum of law to regulate the digital asset sector in Israel.

After the Markets in Crypto-Assets Regulation (MiCA) entered into force in June 2024, a significant step took place last July with the publication of the European Banking Authority (EBA) final Travel Rule guidance.

The Israel Securities Authority recently published a draft of a new directive for payment companies and holders of basic initiation licenses or approvals regarding reporting to the Authority. According to the Draft, payment companies and holders of basic initiation licenses or approvals are required to submit annual, semi-annual, quarterly, and immediate reports on various topics, such as audited or reviewed financial data, operational data, compliance with capital requirements, technological measures, corporate governance, compliance etcetera.

This year, the Israeli Capital Market, Insurance and Savings Authority issued a series of new and revised circulars regarding proper management and corporate responsibility by financial service providers.

Following the Financial Action Task Force’s announcements, the Israel Money Laundering and Terror Financing Prohibition Authority published a list of countries and jurisdictions at high risk of money laundering, terror financing, and proliferation financing.

A new trend that offers potential traders trading experience is challenging regulations and raising complex legal questions about the existence of a “trading platform” and the need for an investment advice or portfolio management license.