On July 18, 2016 the Knesset approved a new law, the Supervision of Financial Services (Financial Services Regulation), 2016 ("Law"). The Law will require (with certain limited exceptions) the acquisition of a license in order to provide financial assets services or credit services. The Law defines a "financial asset" very broadly, including, inter alia, cash, checks, securities, and virtual currency in the definition. "Granting credit" is similarly widely defined, and seems to also apply to venture capital loans. The Law sets forth different requirements for basic licenses and broad licenses in each of the two areas, depending on the scope of activities of the provider. For example, a broad license for providing credit would be required for the provision of credit in excess of approximately 25 million shekels, and would be restricted to corporations incorporated and registered Israel.
The Law also grants a regulator authority to monitor organizations in these fields, with the objective of developing financial services alternatives to the banking system and to avert abuse by criminal factions for illegal purposes.
The Law will come into effect in June 2017 with regard to the provision of credit services
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