pasos para la elaboración del plan de marketing

1. Supervision over trading on the Stock Exchange

The control and supervision of trading on the Stock Exchange are conducted by electronic and other examinations, in an effort to identify irregular trading activities within and outside the Exchange, which may be indicative of violations of the Securities Law. In 2010, the Department developed new algorithms for the purpose of analyzing behavioral irregularities in the BI (Business Intelligence) system.

2. Supervision over the Stock Exchange clearing houses

During the reporting year, the Department staff promoted, through cooperation with the bank of Israel, issues and areas regarding the stability of the Stock Exchange clearing houses and ways to confront failures and emergency situations.

3. Supervision over the Stock Exchange Members Department and the Stock Exchange

As part of the supervision activity over the Stock Exchange Members Department and overall supervision of the Stock Exchange, the Department handled various aspects regarding the activity of Stock Exchange members, including stability requirements for non-bank Stock Exchange members (hereinafter - NBMs), documentation (IPs), client activity, and aspects regarding disaster recovery planning (DRP) for non-bank Stock Exchange members. As part of its ongoing supervision activity, the Department receives from the Stock Exchange current reports regarding irregular member activities, including details about the financial stability of NBMs.

4. Own account trading floors

During the year, the Department promoted legislation aimed at regulating own account trading floors. As part of this activity, the Knesset approved an amendment to the

Securities Law (Amendment 42), which regulates their activity. In addition, the

Department promoted the development of amendments regarding various aspects of own account trading floors, including requirements concerning the stability of trading floors, the manner in which they are marketed, permitted level of leverage, as well as regulations regarding the manner of safekeeping clients’ funds.

5. Stock Exchange rule making activities

Changes in the Stock Exchange Rules and Regulations

As part of the ISA's supervision over the proper and fair management of the Stock Exchange, the ISA's recommendation to the Minister of Finance is required for any changes made in the Stock Exchange rules. In addition, the ISA’s approval is required for any changes in the Rules and Regulations' provisions. For this purpose, the ISA recommended to the Minister of Finance to adopt revisions to the Rules and Regulations initiated by the Stock Exchange, and approved the revisions, as follows:

86

5.1 February 21, 2010

a. The ISA recommended the revision of provisions regarding the calculation of the

weight of an index share;

b. The ISA approved a revision to the price list (appended to the Stock Exchange provisions) for clearing fees charged for repo transactions;

c. The ISA approved the revision of the price list regarding non-cash payment of dividend, interest or redemption;

d. The ISA approved an amendment to the provisions concerning market makers in

share warrants;

e. The ISA approved the revision of provisions regarding maximum order size;

f. The ISA recommended to the Minister of Finance to revise the Rules and

Regulations regarding the suspension of trading in stocks of companies facing difficulties;

g. The ISA recommended to the Minister of Finance to revise the Rules and

Regulations regarding the definition of a limited partnership project for film production.

5.2 April 26, 2010

a. The ISA approved the revision of provisions regarding authorization by clients;

b. The ISA recommended to the Minister of Finance to revise the Rules and

Regulations regarding the initiated provision of information by the Stock Exchange to the ISA.

c. The ISA recommended to the Minister of Finance to revise the Rules and

Regulations regarding causes for suspension and revocation of Stock Exchange membership.

d. The ISA recommended to the Minister of Finance to revise the Rules and

Regulations regarding qualification conditions for risk controllers, credit controllers and compliance officers;

e. The ISA recommended that the Minister of Finance amend the Stock Exchange rules, while simultaneously approving an amendment to the regulations concerning the activity of custodians in derivatives;

f. The ISA approved the revision of provisions regarding changes in application forms to act as Stock Exchange market makers;

g. The ISA recommended to the Minister of Finance to revise the Rules and

Regulations regarding new Stock Exchange members and that temporary provisions become part of the Rules and Regulations;

h. The ISA recommended the revision of provisions regarding single share options;

i. The ISA approved the revision of provisions regarding circuit breakers and the possibility of changing the trading schedule in case of an event bearing wide ranging ramifications;

j. The ISA approved the revision of provisions regarding the upgrading of Stock Exchange index methodologies according to international standards.

87

5.3 August 11, 2010

a. The ISA approved the revision of temporary provisions regarding contract

certificates;

b. The ISA approved the revision of provisions regarding requirements for low volume securities;

c. The ISA approved provisions regarding the change of dates and update deadlines

for the low volume securities list;

d. The ISA approved a revision to the price list (appended to the Stock Exchange provisions) for clearing fees charged for repo transactions;

e. The ISA recommended to the Minister of Finance to revise Section 6.d of the 4th

Part of the Stock Exchange Rules and Regulations;

f. The ISA recommended to the Minister of Finance to revise the Rules and

Regulations, and also approved the revision of provisions regarding collateral values for assets, financial assets, and collateral requirements for short sales.

5.4 November 16, 2010

a. The ISA approved a revision of the price list (appendix to the provisions) regarding authorization to use Stock Exchange rates for the purpose of calculating indexes;

b. The ISA approved a revision of the price list (appendix to the provisions) regarding clearing fees for securities on T+1 dates;

c. The ISA approved the revision of provisions regarding the last day of trading in securities with the transition to T+1 inventory clearing;

d. The ISA approved a revision to the price list (appended to the Stock Exchange provisions) for clearing fees charged for repo transactions;

e. The ISA approved a revision of provisions regarding the deadline for announcing a new security to be traded on the Stock Exchange;

f. The ISA approved the revision of the price list (appended to the Stock Exchange

provisions) regarding trading and clearing fees for stock options.

5.5 November 25, 2010

a. The ISA recommended to the Minister of Finance to revise the Rules and

Regulations, and also approved the revision of provisions regarding equity requirements for NBMs and appendixes regarding equity requirements for NBMs.

88

VII Legal Counsel Department

Throughout the reporting year, the ISA Legal Counsel Department provided extensive legal support to all departments of the ISA.

This support included providing ongoing counsel to the various departments and handling various issues and inquiries which affected the departments' activities. Additionally, legal

support included participation in a variety of work groups. The Legal Counsel Department's

support also included providing ongoing counsel to the Plenum and to ISA committees, primarily on legislative interpretation and implementation, promoting legislation, addressing broad-reaching issues with clear legal aspects and aiding in implementing the legislation and rules that are relevant to the ISA's ongoing activity.

The Legal Counsel Department also coordinates and spearheads legal proceedings in which the ISA is involved, and addresses public inquiries on an ongoing basis.

Main legal issues that are fundamental to the ISA's activity, in which the Legal Counsel Department was involved, include

1. Administrative enforcement - The Legal Counsel Department promoted the formulation

and advancement of the Streamlining of ISA Enforcement Procedures Bill (Legislative Amendments), 2010. The Bill was approved by the Knesset Finance Committee on September 14, 2010, as a step towards its approval by the Knesset on its second and third reading and its subsequent publication. The Bill establishes an administrative enforcement mechanism, which will serve as a complementary alternative to criminal procedure.

This model is aimed at providing the ISA with an additional enforcement tool that is more effective and more suitable for use in statutory violations that the ISA is charged with enforcing. For more information, please see Section l, under Proposed Primary Legislation.

2. Establishing an economics section within the Tel Aviv District Court - The Department

promoted the formulation and adoption of the Courts Law (Amendment 59), 2010, published on July 27, 2010. The Amendment establishes an economics section in the Tel Aviv District Court, which is to hear the majority of the proceedings of an economic nature. For more details on this matter, please see Section g below, under Primary

Legislation. It should be noted that the Economic Section was established and

commenced operations on December 15, 2010.

3. Administrative rule making - The Department promoted the formulation and adoption

of the Administrative Powers of the Israel Securities Authority Bill (Legislative Amendments) of 2010. Similar to powers currently granted to other regulators in Israel

and abroad, the Bill proposes that the ISA be granted regulative rule making powers.An

exposure draft of the Bill was distributed on May 6, 2010. For more information, please see Section q below, under Proposed Primary Legislation.

4. Own account trading - The Department, together with the Department of Supervision

over the Secondary Market and the Financial Instruments Unit of the Investment Department, promoted the formulation and adoption of the Securities Law (Amendment 42) of 2010, published on June 15, 2010. The Department and the aforesaid parties further drafted the Securities Regulations (Own Account Trading) of 2010, which were

89

approved by the ISA Plenum on October 24, 2010. The Law and Regulations regulate alternative trading floors which allow investors to trade with dealers in various financial assets (foreign currency derivatives, indexes, commodities, etc.). The published amendment and the draft regulations, which are to validate the amendment, subject own account trading to regulation and supervision by the ISA. For more information, please see Section f below, under Primary Legislation, and Section 36 - Proposed Secondary Legislation.

5. Regulation of the securitization market - The Department was involved in various

activities aimed at regulating the securitization market in Israel. These activities were carried out in conjunction with the Corporate Finance Department, and included participation in an interdisciplinary team comprised of representatives from the Bank of Israel, the Tax Authority, the Ministry of Justice and the Ministry of Finance. For more information, please see Chapter 4 - Corporate Finance Department.

6. Prohibition on front-running - The Department promoted the formulation and adoption

of the Prohibition on Unfair Use of Information Bill (Legislative Amendments) of 2010. First and foremost, the amendment aims to prevent front-running transactions by

account managers and their employees. In addition, the amendment aims to establish a

comprehensive and coherent regulatory framework for holders and dealers in securities. Currently, such regulation is set out under the Regulation of Investment Advice, Investment Marketing, and Investment Portfolio Management Services Law of 1995 (hereinafter - the Advice Law), and under the Joint Investment Trust Law of 1994 (hereinafter - the Joint Investment Law). For more information, please see Section s below, under Proposed Primary Legislation.