Underwriting reforms start Sunday

The reforms are aimed at increasing local activities in the primary market and encouraging the entry of foreign participants.

By MATTHEW KRIEGER
July 1, 2007 08:10

Underwriting reforms for the Tel Aviv Stock Exchange, which were approved by the Knesset Finance Committee in February, are set to take effect on Sunday after months of anticipation. The reforms are aimed at increasing local activities in the primary market and encouraging the entry of foreign participants. The reforms were proposed by the Israel Securities Authority and will allow underwriters to allocate securities to institutional investors in a public offering, as is the current practice in the US. The regulations also prohibit the underwriter, which is affiliated with a banking group, to act as a pricing underwriter (one who regularly participates in fixing the issuing price), in issues of companies whose overall obligation to the underwriting group is above 15 percent of the overall balance of the issuing company.


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