Israeli digital securities exchange gets preliminary green light from regulators

An Israeli startup that aims to create a technology-based digital stock exchange in the country’s digital ledger received its first sign of encouragement from the Israel Securities Authority.

In a letter of request submitted to the regulator on February 14th, Simetria sought ISA approval to operate a digital billboard as a preliminary step in the roadmap for the eventual launch of digital interchange. The letter indicated the increasing integration of DLT technologies into market infrastructures globally, and the evolution of legislative frameworks to accommodate this innovation.

In the case of Israel, a securities law memorandum published by ISA in 2020 proposed legislation that would facilitate the creation of innovative digital exchanges on a smaller scale:

“The Finance Ministry wants to promote securities trading activities on trading platforms that do not operate on the same scale as the Tel Aviv Stock Exchange, and have unique features or customized purposes, such as trading platforms intended for seasoned investors (such as insurance companies, pension funds, and banking companies) or platforms that It uses new technologies (such as blockchain technology). “

Thus Simetria’s letter asked ISA to agree to operate one of its products in the short term: a “digital billboard” would provide information about private companies raising capital in the primary market, as well as information about securities. Of the private companies offered for sale by their owners (the secondary market). On the bulletin board, potential sellers and buyers will be able to post sales and purchase indicators of various types.

According to a February 17 report in the Israeli newspaper The Globes, the ISA quickly approved Simetria’s request to run the billboard. Simetria co-founder and CEO Ziv Kennan said the approval brings Israel in line with those countries at the forefront of creating digital securities globally:

The ISA decision marked a milestone towards the creation of the Digital Stock Exchange in Israel […] Private companies will soon be able to offer digital securities to investors from international institutions on the Simetria technology platform in a way that allows them to raise capital and gain liquidity. ”

Oded Spearer, CEO of ISA, echoed Kienen’s view, who said himself that “digital stock markets are no longer in the distant future, but in the present now.”

In recent regulatory developments in the field of cryptography in Israel, several lawmakers have proposed amending the current tax legislation so that digital currencies such as Bitcoin (BTC) are not subject to capital gains taxes, but are treated like fiat currencies instead. The proposal, if pursued, would significantly lower tax bills for crypto investors in Israel.