Outgoing Watchdog Calls for More Funds for Regulation

'Don't be surprised if you are asked to approve an additional budget for the ISA in the coming months,' said outgoing Israel Securities Authority Moshe Tery.

"Don't be surprised if you are asked to approve an additional budget for the ISA in the coming months," said outgoing Israel Securities Authority Moshe Tery, addressing the Knesset Finance Committee Tuesday.

Tery stressed that the ISA's enforcement activities need to be stepped up and that its budget was insufficient.

The committee was deliberating a budget of NIS 117 million for 2008, NIS 10 million more than last year.

Tery added that the capital market is bigger than ever before, and is approaching NIS 1.5 trillion.

"We have a very big job to do and the budget will not be enough," said Tery.

A closer look at the budget proposal reveals that this year, the ISA will spend NIS 1 million to rent office space in Jerusalem and Tel Aviv. Toward the end of 2007, the ISA increased its office space by 10%, partly to accommodate additional personnel.

The salary of Tery's successor, Prof. Zohar Goshen, will be NIS 766,000. He will be earning NIS 63,800 a month in 2008, 3.6% more than the NIS 61,600 that the ISA paid Tery per month in 2007. The ISA's international relations budget is NIS 400,000 this year, up 33% over 2007, and NIS 200,000 has been allocated for strategic consulting.

Tery and Goshen noted in the budget proposal that the number of registered companies and funds that are offering securities and participation units to the public is increasing significantly every year. The ISA now oversees 845 registered companies, compared to 783 at the beginning of 2007. Last year the ISA handled a record 334 prospectuses, more than 35% more than in 2006, which was also an extremely busy year.

In addition, the ISA is supervising 1,064 funds, up from 1,000 at the end of 2006 and 918 in 2005. Over the past two years, the funds department has handled some 200 fund prospectuses. The funds department needs to be better prepared for the scope and complexity of the heavy work load, which involves processing funds' prospectuses and reports.

MK Yakov Litzman (United Torah Judaism) objected the ISA's plan to hire a strategic advisor at a cost of NIS 200,000. Goshen responded that he supports the budget proposal the way it was submitted.

MK Haim Oron (Meretz-Yahad) commented that he is worried by the overall supervision of the financial market.

"There is not enough oversight of much of the money that should be supervised," said Oron, "such as the pension funds and the provident funds - this is money that belongs to widows, etc. The finance committee has twice approved decisions that required the finance minister to set up professional committees to divide this supervision between the Bank of Israel and the supervisor of insurance and the capital market. The Israeli system should be brought in line with that of other countries."

"What you are saying is not exactly right," responded Tery. "The ISA's quality of supervision is among the highest in the world."