Moshe Kahlon, the Israeli finance minister, and Ueli Maurer, head of the Federal Council of Switzerland’s Federal Department of Finance (FDF) signed a Memorandum of Understanding on 4 September 2017 to strengthen the cooperation of their financial services sectors,
The Times of Israel’s Shoshanna Solomon writes.
As part of the MoU, both will, according to an Israeli ministry statement cited by Solomon, carry on their regular financial dialogue alongside increasing cooperation in three ways. First, regulatory and supervisory collaboration will be increased. Second, financial innovation cooperation will be boosted. Third, the institutions and organisations that formulate international standards for financial services will strengthen their coordination together.
The same statement outlines an additional accord that was signed by the Swiss Financial Market Supervisory Authority; the director of Capital Markets at the Israeli ministry, Dorit Salinger; and the chairman of the Israeli Securities Authority (ISA), Shmuel Hauser, to provide a framework for fintech firms that outlines the regulatory requirements expected of them. It is hoped, the statement continues, that uncertainty and time to market will be reduced as a result.
Kahlon is quoted by Solomon as saying: “The Swiss economy is one of the strongest in the world, and the great interest they are showing in the Israeli economy … the high-tech industry and our fintech testify to Israel’s strength in these fields.”
The Swiss delegation also visited the CITI Accelerator, a hub for fintech start-ups located in Tel Aviv, the financial centre of Israel.
Switzerland isn’t the only nation Israel has designs on cooperating with for the benefit of its financial services sector. Kahlon confirmed that a ministry delegation will be in China on the week beginning 11 September 2017. This visit is the next step in their plans to solidify Israel’s status as a “global high-tech and innovation power”.
The Times of Israel article
Israel’s future financial linksWhile Kahlon is yet to visit China, the ISA has visited Hong Kong and Singapore to meet with senior officials, according to sources in Ron Stein’s report for
Globes.
Hauser and senior office holders visited Hong Kong recently to meet finance and innovation ministers, and “held work meetings with the managements of the securities authorities in Singapore and Hong Kong, the heads of the local stock exchanges, investment banks and law and accounting firms”.
"It's beneficial for a hedge fund to be in a country whose currency is weaker than the one they operate in”According to Stein, the ISA stated that these meetings were designed with the intention of preparing the groundwork for long-term working relations and cooperation between Israel, Hong Kong and Singapore.
The ISA also hopes that this can lead to “an opening for companies listed in Hong Kong or Singapore to have their securities dual-listed on the Tel Aviv Stock Exchange (TASE) and remove barriers that currently make it difficult for companies listed on the TASE to also be listed on the stock exchange in Hong Kong or Singapore”.
Currently, Israel’s dual-listing arrangement is only applicable to the London Stock Exchange and two more in New York.
Globes article
Weak pound adds to London’s lureWhile Israel is building bridges for its financial services sector, its fellow Swiss MoU signatories are seeing firms lured away from Geneva to London by the weak pound.
Tabby Kinder’s article for
Financial News also attributes a stronger recruitment market as part of London’s allure. Mirage Recruitment headhunter Barry Seath, cited within the article, says that hedge funds are moving individuals and whole head offices to London.
Another hedge fund planning to relocate to London is high-profile financial luminary Leda Braga’s Systematica Investments, according to Kinder, who adds that the $8bn hedge fund will need to clear regulatory hurdles first.
Kinder’s unnamed source says that Geneva’s operations have become “an expensive business”. The deprecation of sterling post-Brexit has made it cheaper for US dollar-denominated businesses to operate in London.
However, a spokesman for Systematica said the company had no plans to close any of their offices.
In June 2017, Amplitude Capital, headquartered in Switzerland and worth $1.6bn, announced that it would be reopening its London base and relocating the majority of its management operations there.
Their head of investor relations, Heiko Zuelke, said the current value of the pound “was a helpful side benefit”.
Kinder reported Zuelke as saying: “It’s beneficial for a hedge fund to be in a country whose currency is weaker than the one they operate in. The Swiss Franc is very expensive, so at the moment a lot of managers are worse off.”
The strength of London’s financial services sector, even during uncertain times, is an example other countries could follow. Israel is currently putting the foundations in place for a solid future for its sector, while Switzerland faces a challenge to stay competitive at the sharp end.
Financial News article
Seen a blog, news story or discussion online that you think might interest CISI members? Email jake.matthews@wardour.co.uk.