The Israel Securities Authority and France's L'Autorite des Marchés Financiers (AMF) have signed a memorandum of understanding (MOU) opening their respective capital markets to trade in securities issued by both Israeli and French companies. The agreement will be based on mutual reliance of both agencies on the regulation existing in the other's country.
Securities Authority chairman Moshe Tery and AMF chairman Michel Prada signed the agreement.
The Securities Authority noted, "The concept underlying the agreement is similar to the single passport principle used by EU countries in relation to the regulation and supervision of European financial markets. The goal of the aforesaid EU legislation is to attain fully harmonized regulation of the field. Each country is responsible for adopting the European standards and ensuring that it complies with them. This process permits the EU states to recognize and rely upon each other's regulatory regimes and thus to dispense with any additional regulatory requirements in excess of those of the issuing company's home member state." It added that it has already begun working on the legislative amendments necessary for implementing the agreement.
This is the first agreement of its kind ever signed by the Securities Authority, and was made possible after the AMF reviewed the quality of the Securities Authority's financial supervision. Minister of Finance Ronnie Bar-On said that the agreement was a vote of confidence in the Israeli capital market, which met the high European standards.
The agreement is also an unprecedented step for the EU. For the first time a European regulator is implementing the new powers granted to it under the European directive permitting recognition as equivalent of regulatory regimes outside Europe.
Israeli companies will be able to register their securities for trading in additional stock markets without bearing the heavy regulatory costs that would have resulted in the absence of this agreement. The agreement will expose Israeli companies to international entities, expand the companies' base of investors, enable foreign companies to list on the Tel Aviv Stock Exchange (TASE), and will diversify offerings available to Israeli investors.
Published by Globes [online], Israel business news - www.globes-online.com - on January 31, 2008
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008