Major international firms could soon take up residence on the Tel Aviv Stock Exchange, after the Knesset Finance Committee approved a law that would allow foreign companies to list on the TASE. The law would allow Israelis to invest in shares of multinational corporations, in shekels and via their local stockbroker.
To qualify, a company must have a net worth of $50 billion or more. Such companies can sell shares on the TASE, regardless of their location or other circumstances. The company’s shares can be traded by Israeli brokers, whether or not a company has an official presence in Israel.
According to the law’s sponsors, the measure will help revive the TASE, which has been in the doldrums in the past few years. The measure will increase the level of liquidity on the exchange, and enhance foreign exhchange procedures for Israelis. According to Shmuel Hauser, chairman of the Israel Stock Exchange Authority, “we are providing Israelis with the opportunity to invest in large companies, in a safe manner. There are many people who buy shares in these blue-chip companies through foreign brokers, but they are very expensive. This law will make it easier for people to invest.”
With that, he said, Israelis should not be complacent about these investments. The fact is that despite their presence on the TASE, Israel has no sway over these companies as it would over home-grown sellers of shares. Thus, he said, caution should be exercised. “We don’t want anyone to think that their investments are fully protected under the same regulations as investments in Israeli companies. These firms are subject to different regulators,” he added.