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Client updates / High Tech
Although Israel is a world leader in the fintech field, companies operating in this area face many regulatory challenges. A newly published legal memorandum aims to enable the creation of a “sandbox”, with inspiration from various programs already implemented in Japan, Australia, and Singapore. The goal is to establish a unique experimental environment, a “regulatory sandbox,” where regulatory relief is granted to companies who choose to participate in the program.
A recent decision by the Economic Division of the Tel-Aviv District Court has emphasized the requirement for officers and decision makers in a company, to undertake a stricter review standard when making decisions, especially in conflict of interest situations. Accordingly companies must now increase the scrutiny on the decision making of directors in private companies, an important decision in light of the current economic climate.
The Israel Securities Authority has approved expanding the trading activity conducted on the trading platform for institutional investors of the Tel Aviv Stock Exchange (referred to as TACT), so that additional types of securities may be issued and traded on it.
A new, welcome initiative by the Israel Patent Office intends to allow entrepreneurs, through a preliminary and fast-tracked process, to submit an application for the provisional registration of a patent. This is a significant step, which could revolutionize entrepreneurial innovation in Israel and make it easier on many Israelis who wish to protect future patents. In the course of the fast-track process, the application is not considered for a year, and applicants are able to set an early submission date for the patent's registration.
Following a previous Israel Innovation Authority call for bids for companies developing technologies to help deal with the coronavirus crisis, the IIA has opened a channel to support companies facing financial hardships due to the virus.
Due to the coronavirus pandemic, the Israel Innovation Authority (IIA) has issued a major easement for the companies it supports, in the manner in which payroll expenses for companies in the midst of carrying out approved plans will be recognized.
The Governmental Cyber Security Unit has published a new directive according to which material service providers to government, infrastructure, and finance bodies will be required to adopt a common and unified standard for cyber protection.
In October 2019, Israel's Attorney General published a detailed guideline document addressed to the legal counsels of various government ministries.
Bank of Israel published a position paper with respect to the activity of banks' payment apps in the B2C market. The position paper is the conclusion of a long battle waged by credit card companies against the banks.
A precedential judgment was handed down on option plans for employees in respect of section 102 of the Income Tax Ordinance. The court ruled that when a tax assessor is notified of the allocation of options in accordance with section 102 and fails to respond within 90 days, the plan is approved and the assessor cannot later claim that this is not so, except in very exceptional cases.
The Ministry of Economy and Industry and the Authority for Investments and Development of the Industry and Economy are presenting a series of steps to bring the Encouragement of Capital Investments Law in line with the Israeli market of 2019.
A new circular by the Israel Tax Authority determines the terms for granting options to employees when the vesting of such options is contingent upon performance milestones or the occurrence of an IPO or exit event.
The Delaware Court of Chancery issued a precedent recently, whereby an acquisition agreement may be cancelled due to the occurrence of a “Material Adverse Effect” (MAE) in the acquired entity.
Israel’s Innovation Authority (the IIA, formerly the Office of the Chief Scientist) has issued new rules regarding the licensing of IIA-funded know-how for use by multinational corporations outside of Israel.
On June 2018, the Israeli Prime Minister's Office published a memorandum on the proposed Cyber Defense and National Cyber Directorate Law. This law is designed to regulate the National Cyber Directorate’s purpose, functions, and powers.
Moments before the new supervisory regime over financial asset service providers came into effect on June 1, 2018, the Minister of Finance signed an order postponing the effective date until the earlier of the following: October 1, 2018, or the issue date of the Prohibition on Money Laundering Order that addresses financial asset service providers.
While some uncertainty exists with regard to the regulatory regime that applies to public offerings of digital coins (ICOs), in the area of services related to digital currencies, regulations are expected to come into effect on June 1, 2018, within the scope of the Control of Financial Services Law.
The Tel Aviv District Court recently issued its ruling in a proceeding that has been underway for several months. The proceeding concerns a fintech company who filed a motion for an injunction that would prevent a bank from unilaterally modifying the terms and conditions for the fintech company’s bank account.
Israel's government recently set forth a decision approving the key points of a national “safe identification” policy. The purpose of this policy is to define how a person’s identity is to be verified when receiving government services in a digital mode, in order to improve the services being provided to residents, and to simplify the access to these services.