Brokerage houses in Israel are about to face new regulation from Tuesday, strongly limiting couple of their activities or lifting costs of their operations.
This new regime includes compliance with internal controls and financial reporting of Israel together with US FATCA (Foreign Account Tax Compliance Act) related to US clients, who are not willing to report ti the IRS.
Israel companies will have to set insurance schemes to protect vs clients’ lawsuits, cyber-attacks or any malfunctions of the server, employees’ malpractice, etc.
Disclaimer will be published on each publication (even banner advertisement) and ads will be under approval obligation of ISA.
This will naturally affect companies under Israel regulation due to higher costs, as most of them will have to lift human resources, as well as capital to meet these regulatory conditions.
As expected, regulator sees these steps as positive due to limiting fraudelent subjects on the market and lifting the rating of existing institutions even after the regulation launch.
Israel clients will be mostly concerned over the lower maximum leverage, nevertheless Plus500, an Israeli broker seems to be interested in the Israeli license even under this tough regulation.
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