The Knesset Approved a Crowd Funding Law for Israeli Companies

On December 29, 2015 the Israeli Knesset approved (voted for second and third hearings) the Law for Encouragement of Investments in Hi Tech Companies – 2015, mainly allowing public offerings  via crowd funding online, without the need to file a prospectus. 

1. The law allows an offer of securities of a corporation incorporated in Israel, without the need to become a “Reporting Corporation” (i.e., a corporation the files a prospectus and is obligated to file reports to the Israeli Securities Authority and the Stock Exchange), subject to the following conditions:
   • The offer is carried out by “A Proposal Coordinator”- a company registered under the “Proposal Coordinators Registry” that promotes the offer for sale of securities by a website.
   • The offer shall no exceed an amount determined by the Minister of Finance (the amount has not yet been determined).
   • The respective investment amount of each investor may not exceed the amount determined by the Minister of Finance (to be determined also).
   • Furthermore, each investor may not exceed an aggregate investment amount for additional involvements. 
2. The Securities Authority shall maintain a “Proposal Coordinators” registry. 
3. Each Proposal Coordinator must submit an annual report and on going reports regarding the proposals made via its web site.
4. The Finance Minister may require additional report obligations.