Regulatory Alerts2019-02-28
Share Buyback by Banking Corporations
The Bank of Israel has amended Proper Conduct of Banking Business Directive 332 to lift the prohibition on banking corporations purchasing their own shares, subject to strict regulatory conditions. Authorized buybacks must comply with dividend distribution rules, not exceed 3 percent of issued share capital per plan, utilize the Israel Securities Authority safe harbor mechanism, and secure prior board and supervisor approval. The circular also relaxes restrictions on accepting bank-issued securities as collateral by permitting limited financing for customer transactions and share index investments, with total collateral capped at 5 percent of capital, effective immediately upon publication.
Share