Israel Securities Authority to Draft AI Regulation for Investment Advice Within Weeks
Translated & summarized from Bizportal by baba
Sefi Zinger, Chairman of the Israel Securities Authority, announced plans to release a draft regulation for AI in investment advice within two weeks. He highlighted the need to update regulations to match the rapid growth and increasing participation of private investors in Israel's capital market. Zinger also stressed the importance of addressing the regulatory gap for brokers and called for national priority for the capital market, which he described as national infrastructure.
The story in 5 lines · by baba
- Israel Securities Authority will publish draft AI regulation for investment advice in 1-2 weeks.
- Chairman Sefi Zinger called the capital market 'national infrastructure' requiring government attention.
- Approximately 400,000 new investment accounts opened in Israel recently.
- Daily trading volumes in Israel's capital market have nearly tripled to NIS 5.5 billion.
- Zinger highlighted a significant regulatory gap concerning brokers and dealers in Israel.
The Israeli capital market is experiencing rapid growth, but regulation and legislation are struggling to keep pace with changes, according to Sefi Zinger, Chairman of the Israel Securities Authority (ISA). Speaking at a Bizportal economic conference on Thursday, Zinger highlighted three key trends transforming the market: technological revolution, globalization, and the accelerated entry of private investors. He announced that the ISA plans to publish a draft directive for public comment within one to two weeks, which will regulate the use of artificial intelligence (AI) in investment advisory services. This initiative aims to enable financial institutions to leverage AI while ensuring investor protection, balancing innovation with risk management.
Zinger also identified a significant regulatory gap concerning brokers and dealers in Israel, noting that developed countries have established frameworks for such activities, while Israel has yet to complete similar legislation. This issue is becoming increasingly urgent as approximately 400,000 new investment accounts have been opened in Israel in recent years, with many individuals trading directly through apps and relying on non-traditional information sources like social media and AI. The ISA is also advocating for the advancement of the investment account reform, a tool designed to help the public consolidate various financial instruments in one place for competitive comparison and potential tax benefits, a concept also being pursued in Europe.
The ISA chairman presented data illustrating the Israeli capital market's significant expansion, with daily trading volumes nearly tripling to about NIS 5.5 billion. The stock exchange's market capitalization is approaching NIS 3 trillion, the bond market stands at approximately NIS 650-660 billion, and mutual fund assets are nearing NIS 1 trillion. Zinger emphasized that the capital market is a national infrastructure, crucial for financing the Israeli economy and impacting nearly every citizen through pension savings and direct investments. He called for greater attention and resources from the government and Knesset to support the market's development and ensure it remains competitive internationally, especially in light of technological advancements like asset tokenization and increasing cyber threats.