An Israeli start-up looking to set up a digital stock exchange based on digital ledger technology in the country has received its first encouraging approval from the Israeli Securities Service.
In a letter of application submitted to the regulatory authority on February 14, Simetria had obtained ISA approval to operate a digital bulletin board as a preliminary step in their roadmap for the eventual start of their digital exchange. The letter referred to the increasing integration of DLT technologies in market infrastructures worldwide and the development of legal frameworks to take this innovation into account.
In the case of Israel, a Memorandum of Securities Law published by the ISA in 2020 proposed laws that would facilitate the creation of smaller, innovative digital exchanges:
“The Treasury Department wants to encourage securities trading activity on trading platforms that are not on the same scale as the Tel Aviv Stock Exchange and that have unique features or specific purposes, such as: B. Trading platforms for discerning investors (e.g. insurance companies, pension funds and banking companies) or platforms that use novel technologies (such as blockchain technology). “
In the Simetria letter, the ISA was therefore asked to approve the operation of one of its products on short notice: a “digital bulletin board” that provides information about private companies raising capital in the primary market as well as information about the securities of private companies that offered for sale by their owners (secondary market). Potential sellers and buyers could post various types of sell and buy indications on the bulletin board.
The ISA has now swiftly approved Simetria’s application to operate the bulletin board, according to a report published on February 17 by Israeli newspaper The Globes. Simetria Co-Founder and CEO Ziv Keinan said the approval aligns Israel with these countries that are at the forefront of digital securities innovation worldwide:
“The ISA’s decision is a dramatic milestone for the establishment of a digital stock exchange in Israel […] Private companies will soon be able to offer digital securities to international institutional investors on Simetria’s technology platform to raise capital and gain liquidity. “
Kienen’s perspective was confirmed by Oded Spirer, CEO of ISA, who himself said that “the markets for digital securities are no longer in the distant future, but in the here and now.”
In other recent developments in crypto regulation in Israel, several lawmakers have proposed amending existing tax legislation so that digital currencies like Bitcoin (BTC) are not subject to capital gains tax, but rather treated like fiat currencies. The proposal, if followed up, would significantly reduce tax burdens on Israeli crypto investors.