A pedestrian looks at an electronic board showing the stock market indices of various countries outside a brokerage in Tokyo..
(photo credit: REUTERS)
The Israel Securities Authority on Sunday published draft guidelines to help ease regulation on small corporations, including an exemption from filing financial reports in the first and third quarters of every year and the creation of an alternate trading list for such companies.
“The proposal to ease reporting for small corporations and the creation of a separate trading list may significantly alter the situation of the stock exchange and return it to be a central source of capital in the Israeli economy,” ISA chairman Shmuel Hauser said.
The new regulations, if approved, would apply to corporations with revenues below NIS 300 million a year, which accounts for roughly 60 percent of corporations, the ISA said.
The hope is that easing the reporting requirements will help small corporations focus on investment and productivity.
On the flip side, investors will have less insight into the company’s well-being, which could discourage investment. The proposed regulations will be open to a period of public comment before moving forward.
The ISA has been trying to make the TASE a more inviting place for young companies, in particular, to raise capital.
In its annual report in June, the ISA said roughly 30% of companies trading on the TASE wished to delist, and 40 companies did so last year.
Israeli companies trying to grow may be turning to foreign exchanges such as the London Stock Exchange, the New York Stock Exchange or Nasdaq because they have greater liquidity and pools of capital, not to mention a certain prestige.
One strategy the ISA is pursuing is to make dual listings easier to confer the advantages of listing on foreign exchanges, without making it too much of a burden to list in Israel as well.