A technology company preparing a dual listing on the Tel Aviv Stock Exchange and a foreign bourse quickly discovers that Israel's capital markets rules carry requirements that differ markedly from those of New York, London, or Dubai. The documentary burden is substantial, the regulator moves at its own pace, and a misstep in the prospectus can delay a transaction by months – or trigger enforcement proceedings that permanently damage the issuer's reputation.
Capital markets activity in Israel is governed by a dedicated body of securities legislation administered by the Israel Securities Authority. Any public offering of securities requires a prospectus approved by that authority before distribution to investors. The approval process typically spans several months, depending on document completeness, the issuer's disclosure history, and the complexity of the offering structure.
This page sets out the principal legal instruments, procedural steps, common pitfalls, cross-border considerations involving the UAE and the EU, and a self-assessment checklist for international clients evaluating a transaction in Israel.
The Israeli capital markets regime and its regulatory foundations
Israel's capital markets operate under a body of securities legislation that has evolved considerably since the country's technology sector began attracting significant international capital. The Reshut Niirut (Israel Securities Authority, or ISA) is the primary regulator. It supervises public offerings, continuous disclosure, insider trading, investment fund management, and the conduct of market participants. Separately, the banking and insurance sectors answer to their own regulators, though their interaction with capital markets is substantial.
Israeli securities legislation draws from both the American model – reflecting the historical influence of US capital market practice on Israeli technology companies – and a distinct domestic legislative tradition. This dual influence shapes every aspect of a transaction: from the structure of a prospectus to the liability standards imposed on directors and underwriters.
For an international client accustomed to common law prospectus liability standards, the Israeli civil law approach to misstatement and omission may produce unexpected outcomes. Israeli courts have interpreted disclosure obligations expansively. Omissions that might attract limited liability in some jurisdictions can give rise to significant civil and regulatory exposure in Israel.
The Borsa Tel Aviv (Tel Aviv Stock Exchange, or TASE) is Israel's principal stock exchange. It operates equity, bond, and derivatives markets. TASE listing requirements sit alongside the ISA's regulatory rules and must be satisfied concurrently. For foreign issuers, a parallel set of rules applies – and the interaction between those rules and the issuer's home-country obligations requires careful mapping before the transaction begins.
Investment fund activity – whether through mutual funds, exchange-traded funds, or alternative structures – is subject to a separate layer of investment fund legislation, with licensing requirements imposed on both managers and distributors. Practitioners in Israel note that the licensing process can extend the timeline for launching a new fund product well beyond initial projections.
Key instruments and procedures for capital markets transactions
Israel's securities offering regime distinguishes between public offerings and private placements. Each path carries distinct documentary, regulatory, and timing obligations.
Public offering and prospectus approval. A public offering of securities in Israel requires the preparation and filing of a prospectus with the ISA. The prospectus must satisfy detailed disclosure obligations covering the issuer's business, financial condition, risk factors, use of proceeds, and management. The ISA reviews the draft prospectus and typically issues rounds of comments. Each comment round requires a substantive written response and often triggers amendments to the document. The total review period – from initial submission to final approval – commonly runs between three and six months for a first-time issuer. Experienced issuers with clean disclosure histories may complete the process more quickly.
Once the ISA approves the prospectus, the offering period opens. Israeli securities legislation sets minimum and maximum offering periods. The issuer must publish the approved prospectus and make it accessible to potential investors before any subscription is accepted.
IPO on TASE. An initial public offering on TASE combines the ISA prospectus process with TASE's listing requirements. TASE imposes minimum equity thresholds, minimum public float requirements, and corporate governance conditions. For international companies listing in Israel through a dual listing arrangement. TASE has developed specific rules allowing issuers already listed on certain recognised exchanges to rely on their home-country disclosure documents. subject to supplementary Israeli disclosure where the home-country standards fall short.
A common pitfall: assuming that a US or European prospectus can be used without significant adaptation for Israeli purposes. In practice, Israeli disclosure requirements in several areas – particularly related-party transactions and management compensation – go beyond what is standard in many other jurisdictions. Discovering this late in the process adds weeks of document revision and legal cost.
Private placements. Israeli securities legislation permits private placements to specified categories of qualified investors without a full prospectus. The conditions for qualifying as an exempt offering are specific. The number of offerees, the character of the investors, and the aggregate amount raised each affect whether the exemption holds. Exceeding any threshold converts the placement into a public offering subject to full ISA oversight. Practitioners in Israel note that international issuers frequently miscalculate the investor count by applying their home-country rules rather than the Israeli standard – a mistake that can void the exemption entirely.
Bond issuances. Israel has a developed corporate bond market. Issuances by foreign entities are possible but require careful structuring to satisfy ISA rules on foreign issuer disclosure and TASE bond listing requirements. Real estate companies from Eastern Europe and the former Soviet Union have historically used the Israeli bond market to raise capital. That practice brought regulatory scrutiny, and the ISA subsequently tightened its rules on foreign issuer disclosure and credit quality. Any foreign issuer considering an Israeli bond offering should conduct a detailed review of current ISA guidance before proceeding.
Investment fund registration. Launching a publicly offered investment fund in Israel requires ISA approval of the fund's governing documents and a licence for the fund manager. The documentation process is detailed. The manager must demonstrate adequate capital, systems, and personnel. The timeline from application to licence grant typically extends to six months or more.
For a tailored strategy on securities offerings and listing procedures in Israel, reach out to info@ferrazwhitmore.com.
Disclosure obligations, enforcement, and common pitfalls
Continuous disclosure is a central feature of Israeli securities regulation. Once a company's securities are listed or publicly offered, disclosure obligations run for the life of the securities. Material events must be reported promptly. Israeli securities legislation defines materiality broadly, and the ISA has enforcement tools that include administrative sanctions, trading suspensions, and referrals to criminal prosecutors.
The ISA has demonstrated a consistent willingness to act against both domestic and foreign issuers who fall short of disclosure standards. Enforcement actions for late or incomplete material event reports are not uncommon. The consequences extend beyond the immediate sanction: an enforcement history can complicate future offerings and impair the company's standing with institutional investors.
Directors and officers carry personal liability exposure under Israeli securities legislation. This liability is not merely theoretical. Israeli courts have shown a readiness to hold individuals accountable for prospectus misstatements and continuous disclosure failures. For a foreign executive unfamiliar with the Israeli system, this personal exposure is often the most surprising aspect of a transaction.
A non-obvious risk relates to the treatment of controlling shareholders. Israeli corporate legislation imposes specific duties on controlling shareholders in listed companies, particularly in related-party transactions. These duties interact with the disclosure obligations under securities legislation. An acquisition or financing transaction involving a controlling shareholder may require minority shareholder approval under conditions that have no direct equivalent in many other jurisdictions. Missing this requirement can invalidate the transaction.
Another common mistake is treating the Hebrew-language disclosure requirement as a secondary administrative matter. Israeli securities law requires that certain documents be filed in Hebrew. For a foreign issuer without Hebrew-language capabilities in its legal team, the translation process can become a bottleneck. Errors or ambiguities in translation have attracted ISA comment and, in some cases, required complete re-submission.
For clients whose Israeli capital markets activity connects to broader banking and financing structures. Our analysis of banking and finance legal services in Israel provides complementary guidance on the interaction between securities offerings and debt financing.
Cross-border considerations: UAE and EU dimensions
Israel's normalisation of relations with several Gulf states – particularly the UAE – has created new transactional corridors that intersect with capital markets practice. Israeli companies seeking Gulf investors and UAE-based entities considering exposure to Israeli securities must now navigate two distinct regulatory systems simultaneously.
In the UAE, the Securities and Commodities Authority and the Dubai Financial Services Authority (DFSA) each operate separate regulatory regimes. An Israeli company targeting UAE investors in a private placement must assess whether the offering constitutes a regulated activity under UAE financial services legislation. The answer depends on the category of investor, the marketing channel used, and whether the offer is made through the DIFC or onshore. Getting this wrong exposes the issuer to UAE regulatory liability alongside any Israeli compliance issues.
For clients considering parallel capital markets activity across both jurisdictions, our detailed examination of capital markets legal services in the UAE outlines the key structural differences and how to manage them in a dual-jurisdiction transaction.
The EU dimension arises primarily through the Prospectus Regulation, which governs public offers of securities in EU member states. An Israeli issuer seeking to raise capital from EU investors. or an EU issuer considering a TASE listing. must consider whether the EU prospectus passport regime can be used and whether a separate Israeli prospectus is required. The two regimes do not automatically recognise each other. Equivalence determinations exist for some purposes, but gaps remain that require bespoke structuring.
Israel is also a significant originating jurisdiction for technology company IPOs in the United States. The interaction between US securities law requirements and Israeli obligations for a company considering a Tel Aviv listing alongside or following a NASDAQ listing requires specialist advice that spans both systems. The key risk is that actions taken to satisfy US requirements – particularly around financial restatements or material event disclosure – may simultaneously trigger Israeli obligations that the company has not anticipated.
Tax structuring is a separate but connected consideration. The interaction between Israeli tax legislation, the tax rules of the investor's home jurisdiction. Additionally. Any applicable double taxation treaty affects the after-tax return on Israeli securities and therefore the attractiveness of the offering to specific investor categories. Structuring the offering without tax advice integrated from the outset can produce an economically inefficient result. A detailed guide to company formation and tax considerations is available in our guide to company formation in Israel.
To discuss how Israeli capital markets rules interact with your UAE or EU structure, contact us at info@ferrazwhitmore.com.
Self-assessment checklist before initiating a capital markets transaction in Israel
A capital markets transaction in Israel is appropriate when the following conditions are met:
- The issuer has audited financial statements prepared under internationally recognised accounting standards and is prepared to adapt them to Israeli disclosure requirements if necessary.
- The issuer's management team is able to commit sufficient time to the regulatory review process, which will require multiple rounds of substantive engagement with the ISA.
- The offering timeline is realistic – a minimum of four to six months for a first-time public offering, and longer if the issuer's structure is complex or its disclosure history raises questions.
- Legal counsel with direct experience before the ISA and TASE is engaged from the outset, not brought in after the prospectus draft is substantially complete.
- The treatment of controlling shareholders, related-party transactions, and minority approval requirements has been mapped in advance and built into the transaction timetable.
Before initiating the procedure, verify the following critical items:
- Whether the proposed offering qualifies for a private placement exemption or requires full ISA prospectus approval – this determination must be made under Israeli law, not the issuer's home-country rules.
- Whether any dual-listing arrangements with a foreign exchange are available and whether the TASE supplementary disclosure requirements have been assessed.
- Whether the Hebrew-language filing obligation has been resourced adequately, including translation review by Israeli legal counsel.
- Whether continuous disclosure obligations – including the material event reporting regime – have been explained to the issuer's officers and directors, who carry personal liability.
- Whether cross-border marketing of the offering to UAE, EU, or US investors requires separate regulatory clearance in those jurisdictions.
Frequently asked questions
Q: How long does the ISA prospectus approval process take for a foreign issuer listing on TASE?
A: For a first-time foreign issuer, the process from initial submission to final ISA approval typically takes between four and six months. This assumes the prospectus is substantially complete at the time of filing and that the issuer responds promptly to each comment round. A dual-listing issuer relying on a recognised foreign disclosure document may complete the process more quickly, but supplementary Israeli disclosure requirements can still add several weeks to the timetable.
Q: Can an international company market Israeli securities to investors in the UAE without ISA approval?
A: Marketing Israeli securities to UAE investors involves regulatory considerations in both jurisdictions. In Israel, the offering must either qualify for a private placement exemption or proceed under a full ISA-approved prospectus. In the UAE, the marketing activity may constitute a regulated financial promotion or securities offering under UAE financial services legislation, depending on where and how it is conducted. Engaging a lawyer in Israel and coordinating with UAE counsel before any investor outreach begins is the standard approach for managing this dual exposure.
Q: Is it true that an EU-approved prospectus can simply be used for an Israeli public offering?
A: No. Israel has not adopted an automatic equivalence recognition for EU prospectuses. An issuer with an EU-passported prospectus who wishes to make a public offer in Israel must still file with the ISA and satisfy Israeli disclosure requirements. Certain elements of the EU document may be incorporated, but Israeli-specific sections – particularly on related-party transactions, management compensation, and material risk factors under Israeli law – will need to be added. A law firm in Israel with capital markets experience should advise on the gap analysis before any filing is made.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our capital markets practice supports international issuers, investors, and fund managers operating in Israel and across the broader Middle East and Asia-Pacific region. We combine Portuguese civil law expertise with English common law tradition to deliver cross-border capital markets solutions – from prospectus preparation and ISA engagement to dual-listing structuring and investment fund registration. Our attorneys have advised on securities offering matters across civil law and common law systems, including transactions with Israeli, UAE, and EU dimensions. As an international law firm with deep Israel capital markets experience, Ferraz & Whitmore works with institutional investors, technology companies, and in-house legal teams who need results-oriented counsel across multiple legal systems. To discuss your capital markets transaction in Israel, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.