Clients updates / IPOs and Public Offerings

Small and medium-sized corporations are a central part of the Israeli economy’s growth engine and are considered major contributors to employment growth. The Israel Securities Authority is seeking to assist these businesses in diversifying their funding sources.

The Israel Securities Authority guides provides basic guidelines to corporations going public and answers critical initial questions.

A wave of IPOs continues to flood the market, prompting the Israel Securities Authority to publish a new staff position paper discussing three key topics.

Over the past year, raising capital through SPACs has become a hot trend on Wall Street. The Israel Securities Authority recently published the conditions and principles for SPACs to launch IPOs.

The Israeli Securities Authority has announced that distribution entities now may be liable for the contents of a prospectus. In a staff position paper published in late July, the ISA changed the rules of the game in the underwriting field by determining that a distributor, or an entity associated with a distributor, that purchases securities during an issuance and sells them within a short period of time (six months or less) shall be viewed by the ISA as an underwriter and shall be liable for the prospectus.

The Israel Securities Authority (ISA) recently published an advisory document for public comment ahead of the publication of a legal memorandum for the regulation of the securitization field in Israel.

On April 12, 2019, Arcturus Therapeutics Ltd., an Israeli public company traded on NASDAQ, published in the United States a prospectus and proxy statement (convening a general meeting of shareholders of the company). Publishing the prospectus is an advanced step toward completing an arrangement between the company and its shareholders.

On April 7, 2019, the Tel Aviv Stock Exchange (TASE) published a proposed amendment to the Stock Exchange Regulations, whereby the barriers to the entry of new TASE members will be removed and for the first time Israeli entities will be allowed entry into the stock exchange even if they operate exclusively for nostro.

Israeli Securities Authority Classifies Cryptographic Coins as Commodities Rather Than Securities. On March 19, 2018, the interim report of the Committee for Examination and Regulation of Cryptographic Currencies, which was established in August 2017, was submitted. The interim report examines the applicability of the Securities Law to offerings to the public in Israel based on decentralized registration.

Recently, a four month proxy fight over control of an Israeli incorporated NASDAQ traded company was settled, following a series of proceedings held before the Tel Aviv District Court. At a crucial juncture, the Tel Aviv Court was asked to issue a temporary injunction over a transaction initiated by the board, which included a highly dilutive (24.9%) issuance of shares.

On March 23, 2018, the TASE board of directors approved the launch of a new index in conjunction with the Ministry of Economy and Industry.

Recently a new Amendment to the Securities Law, concerning the restructuring of the stock exchange, came into effect.

It is not uncommon for Israeli incorporated companies to seek investments abroad. In many cases, such investments are done through public offerings on international stock exchanges. Securities issued by Israeli companies are traded on the NASDAQ, the London Stock Exchange and a variety of other exchanges, including Australia. These situations, which make perfect sense from a business perspective, give rise to interesting and sometimes quite complex legal issues.