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The Israel Securities Authority

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Requirements for Obtaining a License under the Israel Securities Authority (ISA)

To operate within Israel’s capital markets, businesses and financial entities must obtain a license from the Israel Securities Authority (ISA). The licensing process ensures that only qualified and compliant entities participate in the financial sector, protecting investors and maintaining market integrity.

Key Requirements for Licensing

  1. Company Registration:
  • The applicant must be registered as a legal entity within Israel.
  • The company’s structure must comply with Israeli corporate laws.
  1. Capital Adequacy:
  • The applicant must demonstrate sufficient financial resources to support the proposed business activities.
  • Proof of minimum capital requirements as determined by ISA based on the type of license.
  1. Business Plan and Strategy:
  • A comprehensive business plan detailing:
  • Proposed services and financial activities
  • Corporate governance framework
  • Projected financial performance
  • The plan must align with ISA’s regulatory standards for transparency and accountability.
  1. Qualified Personnel:
  • Key individuals, such as directors, executives, and compliance officers, must:
  • Meet ISA’s “fit and proper” criteria for experience, integrity, and professional qualifications.
  • Demonstrate expertise in financial services and securities management.
  1. Risk Management and Compliance Framework:
  • Applicants must submit detailed policies and systems for:
  • Risk management
  • Compliance monitoring
  • Anti-money laundering (AML) and counter-terrorism financing (CTF) procedures
  • Ensuring these frameworks meet ISA’s regulatory guidelines is essential.
  1. Financial Statements and Reports:
  • Submission of historic financial records if the entity is already operational, including:
  • Audited balance sheets, income statements, and cash flow statements.
  • Newly established entities must submit detailed financial forecasts.
  1. Internal Control and Reporting Mechanisms:
  • Implementation of strong internal controls to ensure transparent operations.
  • Systems for periodic reporting to the ISA as part of ongoing regulatory compliance.

Application Process

  1. Preparation of Documentation:
  • Gather all required documents, including financial statements, business plans, and governance structures.
  1. Submission to ISA:
  • Submit the application and required documents to the ISA for review.
  1. Payment of Licensing Fees:
  • Payment of applicable fees based on the type of license sought.
  1. Assessment and Evaluation:
  • The ISA will thoroughly evaluate the application to verify compliance with legal, financial, and operational standards.
  • Additional information or documents may be requested during the review process.
  1. Issuance of License:
  • Upon successful assessment, the ISA will grant the license, enabling the applicant to provide regulated financial services in Israel.

Ongoing Obligations for License Holders

After obtaining the license, entities must:

  • Comply with ISA’s periodic reporting requirements.
  • Maintain adequate capital reserves.
  • Ensure ongoing compliance with risk management and AML policies.
  • Participate in regular audits and inspections conducted by the ISA.

By fulfilling these requirements, applicants can secure a license to operate under the supervision of the Israel Securities Authority (ISA). This licensing framework ensures that Israel’s capital markets remain transparent, competitive, and secure, ultimately protecting the interests of investors and the public.