Israel Securities Authority Unveils Major Corporate Reporting Reform Draft
The Israel Securities Authority published a draft reform replacing board reports with management analysis, updating KPIs, and easing immediate reporting timelines for public companies.
The Israel Securities Authority has published a comprehensive draft amendment to periodic and immediate reporting regulations, translating the principles of the Hamadani Committee reform into binding rules. Led by Prof. Asaf Hamadani, the committee's proposal aims to fundamentally alter how public companies report to investors by reducing technical disclosure checklists, enhancing management analysis, and providing significant relief in immediate reporting.
Transition from Board Report to Management Discussion
The most prominent change is the replacement of the traditional board of directors' report with a management report. This new report presents the company's financial and operational status from the executive perspective, requiring detailed analysis of macroeconomic trends, cost structures, labor expenses, and material risks. Companies will also be formally required to disclose key performance indicators (KPIs) and detail their strategic business goals, expected threats, and market opportunities.
The draft introduces a dedicated financing section, requiring companies to transparently present their debt structure, loan covenants, interest rates, maturities, and cash positions to enhance investor liquidity visibility.
Streamlined Immediate Reporting and Disclosure Reliefs
Another major shift involves the immediate reports companies must issue to the stock exchange. According to the draft, the deadline will be extended so that reports are filed by 9:30 AM on the trading day following a 24-hour window from the moment the company learns of a material event. Furthermore, a dramatic relief is proposed for material transactions: the reporting obligation will only arise upon signing a binding agreement rather than during early negotiations.
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Public comments on the draft are currently open before the Israel Securities Authority formulates a final text.
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The regulations will be enacted by the Minister of Finance following approval by the Knesset Finance Committee.
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Once approved and published, the rules will take effect starting the subsequent fiscal year, giving public companies adequate preparation time.
