As part of the Israel Security Authority's measures towards
easing some of the existing regulations, yesterday the ISA
published an order (Amendment to the First Addendum to the
Securities Law). The amendment significantly liberalizes the
definition of "accredited investor" to whom securities
may be offered or sold without having to publish a prospectus.
One of the most significant amendments to the law is that, while
today, two cumulative qualification criteria must be met in order
for an investor to be deemed an "accredited investor"
once the amendment comes into effect, such an investor may be
deemed as "accredited investor" even if he fulfills only
one of the relaxed criteria prescribed in the amendment. Another
amendment concerns an offeror's active
examination of an accredited investor's fulfillment of the
quantitative thresholds prescribed in the amendment. The amendment
will come into effect on March 25, 2016.
Following are the differences in the definition of
"accredited investor" between what is in effect now, and
the amended version.
Definition of accredited investor
An individual who fulfills two of these
criteria and who has issued his prior written consent to be deemed
as accredited investor:
The aggregate value of cash,
deposits, financial assets and securities owned by him exceeds NIS
He possesses expertise and
qualifications in the capital market or was employed for at least
one year in a professional capacity that required expertise in the
3. He carried out at least 30 transactions, on average per
quarter during the four quarters before he issued his consent to be
deemed a accredited investor.
Definition of accredited investor as of
March 25, 2016:
An individual who fulfills one of these
The aggregate value of the liquid
assets owned by him exceeds NIS 8 million;
His income during each of the last
two years exceeds NIS 1.2 million, or the height of the income of
the family unit of which he is a member exceeds NIS 1.8
3. The aggregate value of the liquid assets owned by him exceeds
NIS 5 million and his income during each of the last two years
exceeds NIS 600 thousand, or the height of the income of the family
unit of which he is a member exceeds NIS 900 thousand.
This amendment has far-reaching implications and opens up
business opportunities to those interested in raising capital
without having to publish a prospectus.
We would be happy to be of service to you, to provide more
details to you about this amendment, or to answer any question you
might have in this regard.
Originally published on February 25, 2016
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guide to the subject matter. Specialist advice should be sought
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In coming to its decision, the Court discussed the two-fold test that must be passed prior to the approval of a distribution of dividends.
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