Israel may create track for smaller companies to list publicly

The Israel Securities Authority (ISA) is looking to create a new track for smaller companies to raise money, similar to the “Regulation A” program in the United States.

ISA chairman Shmuel Hauser said on Sunday there is a “financing vacuum” in Israel in which regulation does not do enough to help small- to medium-sized businesses.

“We are examining the creation of a path with more lenient regulation that suits this range – similar to the US Reg A,” he said during a speech at the Globes business conference in Tel Aviv.

“Doing this will allow a fresh way of thinking and a release from the conventional shackles that are not necessarily suited for small- and medium-sized businesses,” Hauser said, without elaborating.

The ISA and executives at the Tel Aviv Stock Exchange have been looking for new tools to help battle a drop in trading volume and company listings.

Hauser has partly blamed the bourse’s woes on an antibusiness environment in Israel as well as hefty regulations that his agency is in the process of easing.

The US Security and Exchange Commission says the benefit of “Regulation A” is that it allows companies to offer and sell securities to the public, but with more limited disclosure requirements than what you would currently expect from publicly reporting companies.

In comparison to registered offerings, it says, smaller companies in earlier stages of development may be able to use this rule to more cost-effectively raise money.

(Reuters)