ISRAEL: Maximum Permitted Holdings in Bank Shares Increased

Monday June 27 2016

The Bank of Israel has revised the maximum permitted threshold for controlling shareholders’ holdings of banks shares in institutions managing customers’ funds (provident funds, insurance companies, mutual funds, and exchange traded notes) from 5 percent to 7.5 percent, subject to receiving a permit from the Governor of the Bank of Israel.

The increased threshold is applicable to entities acting on behalf of the general public and through financial rather than strategic motives.

The new policy is immediately effective.

In the majority of advanced economies, the shareholding requiring receipt of a regulatory permit is 10 percent (for example, UK, US, Canada, France, Belgium, Switzerland, and others) and in some countries the threshold is further increased to 15 percent (e.g. Austria, the Netherlands, Denmark, Germany, and others). In light of all these, the Bank of Israel views it as appropriate to ease the holding limit as noted.

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