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Nov 05, 2018

Client Update | Public Offering of Structured Notes – The Structures Are Back

The Israeli Securities Authority (the "ISA") has published draft regulations (the "Draft Regulations") regarding public offering of structured notes for public comment.

In the ten years since the global financial crisis, no structured notes have been issued to the public in Israel. The ISA recently published Draft Regulations that will allow the issuance of structured notes linked to currencies, securities indices or commodities.

According to the Draft Regulations, the only structure notes that can be issued to the public in Israel will be simple and static structured notes that allow no discretionary actions on behalf of the issuer and no active underlying assets management. At first, only principal protected structured notes that ensure a relatively low level of risk and that enable daily valuation by the investors will be permitted.

In addition, the Draft Regulations imposes limitations on the management of the deposits, the underlying assets and duration of the structure notes.

In light of the broad impact that the Draft Regulations is likely to have, if implemented, on this market and market participants, we are collecting comments from our clients and other relevant players in order to hold a dialogue with the Israel Securities Authority on this matter.

We invite our clients to discuss the main points of the Draft Regulations with us and to obtain clarifications regarding the consequences of these Draft regulations on their business.

Comments on the proposed Draft Regulations may be submitted to us until November 10, 2018.
 
To view the full wording of the Draft Regulations (in Hebrew) – click here.

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