The Israel Securities Authority on Monday signed a mutual recognition of prospectuses agreement with its French counterpart allowing Israeli companies to list securities in France, while easing the entry of foreign companies to list on the Tel Aviv Stock Exchange. "This is an historic event," ISA chairman Moshe Tery said. "It will only be a few years from now that the true meaning of this breakthrough will be fully appreciated. Today, Europe openly announces its recognition that the regulatory regime and the quality of reporting here in Israel are equivalent to those in Europe." Tery signed a memorandum of understandings with his French counterpart, Michel Prada, chairman of L'AutoritÃ© des MarchÃ©s Financiers. Under the framework of the mutual recognition agreement, the ISA said, Israeli companies will be able to list their securities in France, which will become their European "home market." For Israeli companies already acting abroad, the mutual accord will open additional capital markets, increase international exposure and widen the investor base. The mutual recognition of prospectuses also creates an advantage for foreign companies, enabling a rapid and simple access to list on the Tel Aviv Stock Exchange. The agreement will increase the volume of the local capital market, encourage foreign activities in Israel and diversify investment opportunities available to the Israeli investing public, the ISA added. In practice, the mutual recognition of prospectuses serves as a "single passport" for issuers of securities wishing to offer their securities in more than one member country. The principle of automatic mutual recognition means that companies will no longer have to ask each member country for regulatory approval of their prospectus for potential investors, or produce duplicative sets of documentation or respond to numerous additional national requirements. Companies registered for trade on the French regulated market, Euronext, or on the TASE will be able to list their securities on both stock exchanges simultaneously. This is the first time the ISA has signed a mutual recognition agreement with a foreign authority. Although the ISA has unilaterally recognized the American and British regulatory and supervisory regimes for the purposes of the dual listing of Israeli companies on the TASE, this dual listing recognition is not mutual but unilateral. In April 2007, following preparatory work by the ISA and the Euronext College of Regulators, a task force was set up by the Euronext regulators to examine deeper cooperation with the ISA. The aim of the task force was to look into the possibility of signing an agreement by which Israeli companies would be able to list on Euronext and foreign companies from the countries of the Euronext regulators would be able to list on the TASE. The mutual recognition of equivalency was to be the basis of the reliance on the regulatory regimes of the parties involved. The task force examined ways to provide cross-listed public companies with a reduced regulatory and bureaucratic burden for listing and offering securities. Following the signing of the memorandum, the ISA said it was working on the legislative amendments necessary to implement the mutual recognition agreement. Separately, the ISA reported that Finance Minister Ronnie Bar-On had approved an amendment permitting the European Investment Bank to issue securities in Israel without publishing a prospectus. This move comes after a similar agreement was approved under the Securities Law, effective March 2005, regarding the issue of special securities in Israel by the World Bank.