The Little Market That Could: Facilitating Cross Listing through Unilateral Regulatory Recognition

This chapter advances an in-depth account of the Israeli dual-listing arrangement (“DLA”) project. In the landscape of cross listing in securities markets around the world, the Israeli DLA provides a unique example of a regulatory regime that is premised on a strategy of unilateral recognition - namely, a wholesale acceptance by one country of another country’s regulatory choices as sufficient for discharging the former country’s regulatory requirements. Israeli law makers have gone to great lengths to implement this strategy. Nevertheless, their work proved incomplete despite its utmost importance for the local market, such that the Israeli DLA remains an unfinished business. Both the positive and the negative features of the DLA thus should be of interest to policy makers who wish to imitate the Israeli model or otherwise innovate in regulating capital markets.