June 22, 2020
Israel Securities Authority Approved New Financing and Trading Channels for Companies and Partnerships on a Separate Trading Platform for Institutional and Accredited Investors (Based on the TACT-Institutional System)
The new financing and trading channels are earmarked for the following sectors: real estate and investment property (overseas only); R&D (high-tech) including VC funds; financing funds, and other equity instruments backed by the government support programs for the business sector and SME financing programs (including programs established in light of the Coronavirus crisis).
The ISA approved a new private financing and trading channel that significantly facilitates debt and equity financing and trading in corporations and partnerships operating mainly in the following sectors: real estate and investment property (overseas only); R&D (high-tech) including VC funds; financing funds, and other equity instruments backed by the government support programs for the business sector and SME financing (including programs established in light of the Coronavirus crisis).
This new initiative will allow corporations and partnerships in these sectors to raise equity or debt on a designated trading platform for accredited investors, allowing investors to liquidize their investments.
Debt and equity raising and trading will be supported by the TACT-Institutional system, an existing TASE trading system used exclusively by institutional and accredited investors. To date, the TACT-Institutional was used only for trading in debt instruments —bonds and securities privately placed to institutional investors. This system will now be expanded to support additional types of tradable securities in specific sectors.
This new step is designed to provide access to liquidity for corporations, which are less inclined to go public than in the past, and encourage them to join the public capital market (the main TASE market) in the future.
A comparative study conducted by the ISA indicates that numerous exchanges around the world maintain platforms for brokering and investing in privately placed securities, such as the Nasdaq Private Market.
The new platform offers several benefits: To companies it offers access to liquidity and a fundraising alternative, and to accredited investors it offers a greater diversity of investment opportunities. To both, the new private market offers real-time trading on the TASE that includes efficient price discovery and automatic clearing by the TASE Clearing House.
The decision to open the new trading platform also aligns with the goals of the ISA's strategic plan to strengthen the ties between the capital market and Israel's high-tech industry. The ISA anticipates that the new platform's lenient rules of capital raising for accredited investors will make a significant contribution in bringing Israeli start-ups and other high-tech companies to the capital market, and in attracting new investors to this sector. The initiative will expand the range of investment opportunities available to institutional and accredited investors, and in the long term can be expected to contribute to the development of the public capital market.