The Knesset approved the first reading of a government- proposed bill on economic concentration late Tuesday. It would restrict cross-ownership of financial and non-financial corporations and limit the pyramid structures of new companies to two public levels.

The bill is based on the recommendations of the Committee on Strengthening Market Competitiveness, which submitted its final report in February.

It proposes enforcing separation of financial and non-financial holdings by prohibiting control of financial institutions by large non-financial corporations.

It defines a large financial corporation as one with at least NIS 40 billion in assets under management and a large non-financial corporation as one with at least NIS 6b. in Israeli sales.

Corporations will have six years to comply with the new regulations if and when they are implemented, not four years as the report proposed.

Some opposition MKs rejected the bill for not going far enough, including Meretz chairwoman Zehava Gal-On, who labeled it a “diet” version of the committee’s recommendations.

Cross-ownership of financial and non-financial institutions should be banned regardless of size, she said, adding that the six-year limitation proposed by the government serves precisely those who are responsible for over-concentration.

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