Sep.10, 2012 | 6:05 AM–Prime Minister Benjamin Netanyahu caused a stir a month ago by saying that every sector of the economy suffers from over-regulation, and last week Israel Securities Authority chairman Shmuel Hauser released a series of proposed measures to ease regulation. The Federation of Israeli Chambers of Commerce welcomed the recommendations, but suggested yet additional relief from regulation.
Chamber federation chairman Uriel Lynn sent a letter to Finance Minister Yuval Steinitz last week objecting to the regulatory approach taken by the ministry’s capital market and insurance division. While the ministry as a whole, Lynn wrote, is working to address the problem of over-regulation of the business sector, the capital market division is constantly creating new, disproportionate and unreasonable regulatory requirements.
“There is a need to reconsider and even freeze the entire mass of regulation that has already been passed, and set clear criteria for every additional regulation in the future,” Lynn wrote to Steinitz. He included data developed by the Chamber federation purporting to show that from the beginning of the year through the end of August, the Finance Ministry’s capital market and insurance division had issued 44 legislative amendments and other regulatory directives relating to companies managing provident funds alone, which were spelled out in 694 pages of text.
By comparison, for all of last year, the federation says, the division issued 43 regulatory directives or amendments that filled 528 pages; and between 2005 and this year, 2,278 pages of regulations have been issued for companies managing provident funds.
A senior treasury official said in response that the ministry is not on a campaign to ease regulation, but is constantly examining whether the regulations are necessary. “Everything we do is designed to protect the consumer. Where it’s possible to ease up, we are happy to,” the official added.
“Until a few years ago,” the official said, “the world of long-term savings and insurance was a very relaxed one. This relaxed world is changing. We expect that things will change at a certain pace while the companies hope they can do it at their own pace. No one is dragging his feet deliberately.”
No apologies from treasury
But the official also said he and his colleagues have no reason to apologize for their approach. “At the Federation of Chambers of Commerce, they speak from a specific stance and that’s a stance that they have to take for the sake of their clients. We have to see first and foremost to the needs of savers and the insured.”
According to Ronen Solomon, director of the finance and capital market sector at the federation, the effect of the regulatory burden is reflected in the decline in number of firms managing provident funds from 104 in 2005 to about 80 at the end of last month. And some of those still in business are about to shut down or merge, he added…Read More>>