On February 10, 2016, the Israeli Parliamentary Finance Committee approved regulations (“Regulations”) which will enable the public offering of foreign mutual fund units in Israel. The Regulations will take effect within six months from the date of publication.
Prior to the enactment of the Regulations, the Israeli Joint Investment Trust Law permitted the offering of foreign funds in Israel. However, the conditions set out in the Joint Investment Trust Law, particularly the requirement that the Israeli Securities Authority (“ISA”) be convinced about the adequacy of the foreign regulatory regime applicable to the foreign fund, meant that in practice, units of foreign funds have not been, up until now, publically offered in Israel.
The Regulations prescribe conditions which a foreign fund must meet in order to obtain approval from the ISA to publically offer its units in Israel, while enjoying an exemption from most provisions of the Israeli mutual funds regulatory regime. The main criteria set out in the Regulations are:
After receiving a permit from the ISA for the public offering of units in Israel, the offering will be made using the foreign fund’s prospectus which was published abroad (in English). The prospectus must attach an appendix containing a Hebrew summary which includes information about its compliance with the terms set forth in the Regulations for the public offer of the fund in Israel, a description of the fund’s investment policies, details about fees, information about its performance and information regarding how to purchase and redeem units.
FBC has been advising the Israeli Association of Exchange Traded Funds for several years in connection with the legislative process relating to the regulatory reform allowing the public offering of foreign funds in Israel.
We would be delighted to provide you with further advice in this area.
For further information please feel free to contact:
Adv. Nitzan Sandor firstname.lastname@example.org +972.3.6944131