One advantage for public companies is the ability to raise large amounts of capital from the public within a relatively short time through follow-on offerings.
Starting in 2004, the reporting requirements for companies regarding annual financial statements were expanded, and contain detailed information, similar to a prospectus.
This annual reports format has allowed the Israeli Securities Authority (ISA
) to facilitate the process for listed companies interested in raising additional capital.
The ISA has decided to implement a prospectus publication system used in various capital markets worldwide. Under this system, several offerings can be performed based on one prospectus, called a “shelf prospectus”. The prospectus is valid for a period of two years, which can be extended by the ISA for one additional year. During this period, the prospectus is "open" for the purpose of listings by way of publishing a shelf offering report. Listing of the offering is possible within seven hours from the time of publication of the shelf offering report (of which five are trading hours).
The regulations stipulate some exceptions with regard to the type of companies to which the shelf prospectus procedure applies.
Types of Shares Offered
A listed company that has one type of stocks
may issue or allocate stocks only of the type listed for trading. A listed company whose capital includes different types of stocks can allocate stocks of the preferred type, in terms of voting rights.
Rights listing is the listing of securities offered equally to all of the company’s existing shareholders, and to all owners of convertible securities who are entitled to participate in the rights offering under the terms of the convertible securities. Shareholders and owners of convertibles entitled to rights may exercise the rights (usually at an additional charge) and receive the securities offered as rights or they may sell the rights on the TASE (one day).