Yesterday, Financial Committee of the Knesset, had approved the law amendment proposed by the ISA permitting EIB (European Investment Bank) to issue securities to the public in Israel. The amendment is similar to the one made to the Securities Law in 2005, allowing World Bank to issue securities to the public in Israel.
Due to EIB’s singular business characteristics, the approved amendment allows the Bank to issue securities to the public, while exempting it from publishing a prospectus approved by the ISA.
The European Investment Bank (the Banque Europ?enne d’Investissement) is the European Union’s financing institution, which was established in 1958 under the Treaty of Rome to provide financing for capital investment furthering European Union policy objectives. The task of the European Investment Bank is to contribute towards the integration, balanced development and economic and social cohesion of the Member States. To this end, it raises on the markets substantial volumes of funds which it directs on the most favourable terms towards financing capital projects according with the objectives of the Union. Outside the Union, the EIB contributes to European development co-operation policy in accordance with the terms and conditions laid down in the various agreements linking the Union to other countries. Through the Bank’s Mediterranean branch, Facility for Euro– Mediterranean Investment and Partnership (FEMIP), EIB already invests in Israel and plans to exand its future investments here.
The amendment approved by the Knesset, is another step continuing to strengthen Israel’s engagement with EIB and is part of the framework agreement regulating the Bank’s activities in Israel. The agreement, signed in June 2000 and approved by the Government of Israel in 2006, stipulates that: “the Bank shall enjoy the most favored status granted to an international institution regarding its activities in Israel, or shall be treated most favorably in relation to all agreements pertaining to the treatment and/or protection of the Bank’s investments or regarding provision of financial services provided by the Bank, accordingly”. The framework agreement proposes an amendment allowing the Bank to offer its bonds in Israel and stipulates special provisions regarding taxation of the Bank.
According to the approved amendment to the Law, the EIB is authorized to offer the Israeli public, including by way of registering for trade on the TASE, non-convertible securities not imparting the rights of participation or membership in the bank and not convertible into securities imparting the aforesaid rights, without publishing a prospectus and other reports as required under the reporting companies’ law. According to the approved arrangement the EIB can offer its securities in Israel according to the “public offer document” and is required to submit financial reports to the TASE and the ISA in accordance with the special arrangement.