Israeli companies listed on the Tel Aviv Stock Exchange (TASE) will now be able to automatically register for trading on the pan-European Euronext stock exchange in Paris.
Yesterday, the chairman of the Israel Securities Authority (ISA), Moshe Tery, and Michel Prada, the chairman of the French securities regulator, the Autorite des marches financiers (AMF), signed a memorandum of understanding opening Israeli and French financial markets to one another.
This is a sign of confidence in Israeli regulation and markets, as the agreement means that both countries regulators have faith in their counterpart's professionalism.
It is considered a major, and most likely last, accomplishment for the ISA under Tery, who completes his his five-year term this month. The agreement in many ways signifies Tery's accomplishments in making Israeli markets global by adopting and enforcing world standards.
The willingness of French regulators to accept Israeli standards of reporting and supervision, known as "equivalency," exhibits trust in the ISA's norms and work.
Euronext is based in Paris, but has as subsidiaries the stock markets in Lisbon, Amsterdam, and Brussels.
Israel is the first country outside of Europe to reach such a mutual understanding with the AMF. The ISA hopes that as a result of this agreement with the French regulators, which in fact opens up the doors to four European exchanges for publicly traded Israeli firms, other European countries will follow suit and let Israelis register and trade their shares. The ISA has started preparing the legislative changes needed to implement the agreement.
The understanding will allow these firms to register and trade on Euronext at a minimal cost, with relatively little effort needed for filing requirements.
The agreement is also a first for Israel too, as Israel has never signed such a mutual understanding. In the past the ISA unilaterally recognized British and U.S. regulatory requirments, and allows registration and trade of companies from those countries in Tel Aviv, but the recognition was not two-way and Israeli firms are not exempted in the U.K. and U.S.
Finance Minister Roni Bar-On said: "The agreement is a show of confidence in Israeli capital markets, which meet the high European standards. The global market views Israel as an equal."
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