Graphic Strip - Private Placements

Private Placements

Summary of Private Placement Rules

In a private placement, a company allocates shares or convertible securities to certain offerees (but not to the general public), in exchange for cash or assets.  

A listed company with one type of security may allocate securities only of the type listed for trading. A listed company whose capital includes different types of securities may allocate only securities of the preferred type, in terms of voting rights. A company may allocate convertible securities from series listed for trading, as well as convertible securities from series not listed for trading.

In some cases, as specified under the Israeli Companies Law, companies are required to convene an audit committee and at times even a general assembly in order to approve the private placement. The manner of approving the allocation and the required majority are specified in the Israeli Companies Law.

Private Placement Inspection by the TASE

According to the TASE Rules and Regulations, prior to making a private placement, the allocating company must apply to the TASE and request its approval for the listing of the allotted securities for trading. As part of the allocation process, there are a number of issues that the TASE must examine before approving the listing.
The following document details a number of highlights in the private placement examination by the TASE.
Letter to companies detailing the highlights of private placement examination by the TASE (Hebrew) >