Securities Law Update | June 2018
Israeli Securities Authority Expands Dual Listing Regime to Toronto, Singapore and Hong-Kong Stock Exchanges
The Israeli Securities Authority (“ISA“) has published amendments to the Israeli Securities Law, 1968 (the “Israeli Securities Law“) enabling companies listed for trading on the Toronto Stock Exchange, Primary Listing (“TSX“), Singapore Exchange Mainboard, Primary Listing (“SGX“) and The Stock Exchange of Hong-Kong Limited Mainboard, Primary Listing (“HKEX“) to benefit from the dual-listing regime of the Israeli Securities Law. These benefits enable companies that are traded both on the Tel Aviv Stock Exchange (“TASE“) and on the TSX, SGX or the HKEX to satisfy their reporting obligations under Israeli law by submitting to the ISA the reports such companies are required to make under the rules and regulations governing companies listed on the TSX, SGX or the HKEX, as the case may be.
The dual-listing benefits are available to Israeli and foreign registered companies originally listed on one of these foreign exchanges who want to list their shares on the TASE, or to Israeli companies originally listed on the TASE who want to list their shares on one of these foreign exchanges. Foreign companies that want to enjoy the dual listing benefits require the prior approval of the ISA, as is customary under the dual listing regime in Israel.
The new amendments extend to companies listed on the TSX, SGX and HKEX the same benefits that were previously only available to companies listed on NASDAQ, the New York Stock Exchange and the London Stock Exchange.
The regulations provide opportunities for companies traded on any of TSX, SGX and HKEX to access capital in Israel without significantly increasing their own reporting obligations. These amendments also provide additional opportunities for Israeli companies traded on the TASE to raise capital abroad without significantly increasing their reporting obligations.
Dual Listing under Israeli Law
The Israeli Securities Law and related regulations allow an Israeli corporation whose shares are traded on certain recognized foreign stock exchanges (“Foreign Stock Exchange“) or, subject to approval of the ISA, a corporation incorporated outside Israel (a “Foreign Corporation“) whose shares are traded on a Foreign Stock Exchange to dual-list its shares under the Israeli dual-listing regulatory regime.
An Israeli corporation or a Foreign Corporation traded on a Foreign Stock Exchange may list its shares on the TASE without having to submit a prospectus in Israel so long as either (i) the securities of the Foreign Corporation to be listed for trade on the TASE have previously been listed on a Foreign Stock Exchange for a at least one year or (ii) the market value of the shares of the corporation listed on the same Foreign Stock Exchange exceeds $150 million.
With respect to Israeli companies originally listed on the TASE, shareholder approval is required in order to convert to the dual-listing regime of the Israeli Securities Law.
Following dual-listing on the TASE and one of the Foreign Stock Exchanges, Israeli corporations and Foreign Corporations are permitted to offer other securities to the public in Israel (including bonds) based, in all material respects, on applicable foreign laws.
Until now, the list of “Foreign Stock Exchanges” included the following: the New York Stock Exchange (NYSE), NYSE MKT, the Nasdaq Global Select Market, Nasdaq Global Market, Nasdaq Capital Market, the London Stock Exchange Main Market, Primary Listing (LSE) and the London Stock Exchange Main Market, High Growth Segment. Following the new regulations, each of the TSX, SGX and HKEX is also considered a “Foreign Stock Exchange”.
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This alert is prepared as an informational service to clients and colleagues of Gross, Kleinhendler, Hodak, Halevy, Greenberg, Shenhav & Co. (GKH) and the information presented is not intended to provide legal opinions or advice. Readers should seek professional legal advice regarding the matters about which they are particularly concerned.