ISA Chairwoman Anat Guetta: “To enhance the market and to drive the economy — That’s the basis for the ISA’s strategic plan for the coming years, and it is these principles that will guide our work. I am confident that the development and reinforcement of the public capital market in Israel is a national interest. The public capital market is designed, first and foremost, to serve the interests of the investor public and our domestic economy, and the ISA is committed to take steps to expand and open our local capital market to the world, helping it transform into a sophisticated, competitive, technologically oriented capital market, and at the same time to ensure that it remains a fair capital market, which is a necessary requirement if we wish to preserve the trust of the investor public and ensure that investors choose our market.”
ISA Chairwoman Anat Guetta today announced the ISA’s strategic plan for 2019-2022. The plan aligns with the vision defined by the ISA senior staff to protect the interests of the investor public while strengthening and expanding the public capital market to create an attractive, fair, competitive and innovative market, with the ultimate aim of contributing to the development of Israel’s economy.
The strategic plan is based on four key goals. Work to promote these goals will open up the Israeli capital market to new investment areas, new trading platforms, and increased competition, transforming it into a sophisticated, technologically oriented market on par with the world’s most successful markets.
Following is a brief summary of these four goals, which will serve as the pillars of the ISA’s work in the forthcoming years, and the major projects that will constitute the core of the ISA’s work in each area:
- Maintaining a fair market: A fair capital market is a necessary condition if private and institutions investors, in and outside Israel, are to choose the Israeli capital market. To this end, the ISA plans to publish a new enforcement policy including principles of enforcement action. The policy statement will encompass administrative and criminal enforcement as well as the ISA’s involvement in private enforcement of the security laws. Furthermore, the ISA plans to devote extensive resources to perfect and reinforce its investigative, intelligence, supervision, and enforcement capabilities, and to enhance the status of gatekeepers such as audit committees, directors, and institutional investors. Actions will be directed to strengthen the roles and status of trustees, increase oversight of underwriters and distributors, define standards for gatekeepers’ activities, and examine the available regulatory and enforcement instruments that apply to auditors.
- Enhancing the public market: The ISA will take action to strengthen and expand the public capital market to ensure that it is the investment platform of choice for the general public, the entities that manage the public’s money, and business entities that seek financing. To this end, the ISA will take steps to diversify the offering of investment and securitization products on the capital market; establish additional regulated trading platforms such as a secondary stock exchange; encourage companies to list and trade; integrate Israel’s hi-tech sector more strongly into the Israeli capital market; and increase the public’s holding in publically traded companies, among other steps.
- Advancing technological innovativeness in the capital market: The recent decade has been characterized by the accelerated emergence of ground-breaking technological developments, together with the adoption of innovative technologies by financial markets. Fin-tech innovations are designed to enhance the efficiencies of and access to the market and reduce the costs of financial services. To encourage innovation development and adoption, the ISA will proactively examine technological trends and development, respond quickly and creatively to changes in the markets, and create a regulatory environment that supports innovativeness while addressing related risks and ensuring the elimination of obstacles and barriers that are unnecessary for the Israeli market. The ISA’s first step toward this goal is the establishment of a Fintech Innovation Hub that currently offers regulatory support to technology-oriented companies that develop innovative products for the finance sector. Furthermore, in the past year, the ISA examined the implications of digital assets and block-chain technologies, an area that is currently characterized by high volatility and multiple risks. The ISA will continue its examinations with the aim of protecting the investor public and facilitating the growth of this field in the interests of Israel’s economy and industry. Based on the appreciation of the field’s potential contribution to investors, the resilience of the capital market, and the growth of the Israeli economy, the ISA will also take steps to assume a leadership position in innovation, and specifically in fin-tech innovations, examine the elimination of obstacles related to fin-tech regulation and oversight, and promote innovative technology in financial supervision (SupTech) and regulatory action (RegTech).
- Promoting competition in the capital market: The Israeli capital market is marked by a high degree of centralization in financial services and management of public funds, and the banking system plays a major role in the capital market. Healthy and effective competition enhances efficiency and promotes improvements in the services and products available to the investor public. Competition also encourages innovation, reduces costs to consumers, and improves the Israeli market’s competitive position among other global markets. Competition and multiplicity of actors also contributes to the stability of the capital market and creates the necessary conditions for proper operations, such as liquidity and price discovery. Consequently, competition is imperative for a stable, active, efficient, and perfect capital market. To this end, the USA will work to ensure such competition for the investor public – the end consumers of the capital market – by ensuring that the public has access to relevant information that allows a comparison of services and products, and that switching between service providers is a simple and easy process. Furthermore, with respect to the regulated entities, the ISA will ensure that existing regulation contains no superfluous obstacles or barriers, and that size, access to information or customers, or first mover status are not exploited to edge out other actors. The ISA,’s actions to promote competition in the capital market will increase its efficiency, its accessibility, and its global appeal. Competition-promoting activities will include encouragement of the operations of new and digital financial brokers, increased competition in the field of brokerage and mutual fund operations in Israel.
Click here to the – complete plan on the ISA website.