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The Capital Market Authority of Israel is seeking to fast track the licensing procedures for domestic fintech companies in order to encourage competition in the local market, Calcalist reported.
Currently, around 2,000 entities have applied for a license from the authority in various fields. A preliminary investigation by the Israel Securities Authority (ISA) revealed that at least dozens of companies that can obtain a work permit in Israel with minor changes to their business model and technology.
The Capital Market Authority intends to prioritize blockchain and financial technology. As such, it has set up dedicated industry teams with fintech and blockchain experts for reviewing the applications and expediting the licensing process.
“Business and technological innovation and the relationship with the industry are the basic principles that guide the Authority in its operations,” said Dr Moshe Barkat, the head of the Authority. “The Authority is engaged in the licensing and regulation of fintech companies on a regular basis, including digital insurance companies, P2P platforms and credit providers, digital wallets, Blockchain-based fintech ventures and other payment services providers.”
The authority is particularly interested in encouraging insurance technology (InsurTech). To that end, it has published a document to identify barriers that make it difficult for insurance companies to invest in such initiatives.
The Capital Market Authority has recently joined the Global Financial Innovation Network (GFIN), a global fintech sandbox formed in August 2018. GFIN counts over 35 financial regulators and international bodies as its members including the World Bank and the International Monetary Fund (IMF).
Last month, Israeli financial regulators signed a memorandum of understanding (MOU) with the Financial Services Supervision Department of the New York Department of Financial Services (NYDFS). The objective was to develop and encourage cross-border financial innovation by sharing information and enabling fintech companies to operate in both countries more easily.
