Finance Minister Avigdor Liberman is planning to submit to the approval of the ministerial legislative committee a request for the concurrent application of two bills promoted by his ministry and approved by the previous Knesset on first reading – to support and regulate FinTech (Financial Technology) in Israel, Walla reported Sunday (שר האוצר למען הגדלת האשראי החוץ בנקאי).
The first bill will lead to the establishment of a unique regulatory sandbox intended for advanced FinTech companies. Under the plan, regulators will be able to give regulatory relief to these entities while hedging their risks, allowing them to try their innovative products in the Israeli market to the benefit of consumers. This will constitute an innovative experimental environment in Israel, in cooperation with all the financial regulators in Israel.
The program will operate in accordance with the conclusions of an inter-ministerial team that examined the creation of a mitigating regulatory environment for FinTech companies. The team was coordinated by the Justice and Finance Ministries and includes representatives from the Securities Authority, Bank of Israel, Capital Market Authority, Anti-Money Laundering and Terrorist Financing Authority, and the Tax Authority.
The second bill will allow lenders to diversify and expand funding sources to grant credit, thereby reduce financing costs and expanding the competitiveness of these entities against the banking system. Under the bill, it will be possible for large non-banking lenders that comply with the provisions of the law to increase their fundraising ceiling via bonds from NIS 5 billion (roughly $1.5 billion) to NIS 15 billion (roughly $4.6 billion), as well as raise debt through commercial securities. In addition, various restrictions will be removed regarding the collection of promissory notes from all non-banking credit providers.
This bill will allow the non-banking lenders to increase and diversify cheaper sources of financing and reduce the dependence on the banking system. It will allow non-banking lenders to increase competition with credit from the banking system.