Pilot Program with the Israel Securities Authority – 2nd Call for Proposals

1. Improve the efficiency of supervision and regulation by the Israel Securities Authority.
2. Protect the infrastructure and information systems of supervised entities.
3. Improve the efficiency of the capital markets and financial services in Israel.
4. Data and services accessibility to the public.

Challenges on ISA’s focus

General 

1. Increase accessibility of capital market to diverse populations with optimal matching of the investment to the costumer.
2. Examine the advantages related to the DLT technology regarding the development of trading platforms/stock exchange infrastructure.

Examples of Challenges

1. Expanding the TASE and capital market activities.
2. Implementing and encouraging ESG (Environmental, Social, and Governance)  investments in order to make it an important tool for investment decisions (for example: rating companies based on their ESG risk management).
3. Promoting the local high-tech sector and enhance its access to the Israeli public capital market.
4. Improving the TASE’s liquidity.
5. Reducing technological barriers in developing innovated investment products.
6. Tools designed to make financial regulation accessible to supervised entities and increasing certainty.
7. Overcoming the language barrier when investing or issuing on the TASE.
8. Streamlining and simplifying the ISA’s work, with emphasis on management and flow of information, and implementation of automation processes.
9. Improving compliance capabilities and reducing the compliance costs for supervised entities:
   • Tools integrating automation into the reporting processes of the supervised entities.
   • Avoiding reporting errors.
10. Evaluating the efficiency and influence of regulations and enforcement over time:
    • Tools for assessing the effectiveness of financial regulation over time.
    • Measuring the effect of regulation on the scope and nature of activity in the financial markets.
11. Data accessibility:
    • Ensuring access to complex and wide-ranging information found in a variety of internal and external information systems and sources in order to better extract and analyze information, generate alerts and insights.
    • Making information, relevant to the public, available when it is needed, intuitively and efficiently:
      • Combining wide ranging and unstructured databases into a unified database that underwent basic processing / analysis and producing initial insights.
      • Supervision tools based on advanced technologies.
      • Retrieving financial data from company reports without pre-tagging.
      • Transmitting relevant and objective information to the public for decision-making.
      • Improving the accessibility of financial reports to retail investors in a way that enables them to understand the meaning and impact of the reports.
12. Improving the customer Identification and Verification process (KYC) through digital means.
13. Improving the KYC process through online means with the purpose of identifying the appropriate risk level:
    • Understanding and analyzing investors’ needs.
    • Determining the appropriate risk level.
    • Tailor made costumer products – “personal distribution”.
14. Defining investors’ risk levels in a meaningful and measurable way. The idea is to enable the management of a portfolio within the defined risk level.
15. Increasing public involvement in capital markets activities:
    • Dealing with the decline of retail investors due to sophisticated robotic trading.
    • Combining wider audiences in capital markets activities and new investment channels.
16. Increasing competition in the capital market:
    • Promoting competition among various market participants in the capital market.
    • Eliminating entry barriers to investors, intermediaries, and service providers.
    • Increasing comparability between intermediaries and service providers.
    • Diversifying ways of distribution of products and services such as mutual funds, portfolio management etc.
17. Increasing the effectiveness and efficiency of the monitoring, detection and enforcement processes:
    • Early detection of law breaches.
    • Prioritizing audit topics based on all available information.
    • A dynamic and risk adapted supervision model.
    • Early detection of new products, tools and technologies, and the risks associated with them.
    • Detecting companies on the verge of bankruptcy.
    • Detecting irregular and unknown trading patterns.