Israel has announced plans to launch a secondary stock exchange catering to small- and medium-sized businesses after the Cabinet approved legislation Sunday proposed by Finance Minister Moshe Kahlon and Justice Minister Ayelet Shaked.
The legislation is based on the recommendations of a panel chaired by Anat Guetta, head of the Israel Securities Authority, that was submitted last month based on a comprehensive review of similar exchanges around the world.
The new exchange will be regulated the Securities Authority, but will be subject to less stringent regulation than the Tel Aviv Stock Exchange.
Under the terms of the legislation, companies will be allowed to list with a post-money valuation of up to NIS 300 million at the time of offering. The ISA will appoint a sponsor to accompany companies through the initial public offering process.
Companies whose values rise above NIS 600 million will be subject to the same corporate governance rules as the primary exchange but will be able to continue to be listed on the secondary exchange.
Companies will be able to make bond offerings of between NIS 6 million and NIS 36 million.
“The legislation paves the way for the creation of a platform that will primarily help small- and medium-sized companies that are the growth engine of the economy,” said Kahlon.
“The measure comes in addition to a number of steps we have taken in order to ease tax rates and the regulatory burden for small and medium sized companies. These measures have a direct impact on increasing growth and strengthening the Israeli economy.”