Lombard loans in Israel.
Private, securities-backed credit against Israel-listed shares — pledged, not sold, with ownership retained.
A Lombard loan against Israel-listed shares is credit secured by a pledge of equity listed on the TASE. The holder pledges the shares as collateral, draws cash against a fraction of their market value, keeps beneficial ownership and dividends subject to structuring, and recovers the position in full on repayment. It is a loan against shares rather than a sale of them — the Geneva private-banking form of what is elsewhere called a share-backed loan.
- Lombard loans are arranged against shares listed on the TASE (TASE).
- The pledge is not a sale: ownership, dividends, and the upside stay with the holder.
- Loan-to-value is calibrated to the specific position, funded in ILS or cross-currency.
- Structured under the ISA regime, with disclosure from 5%.
Eligible collateral and venues
Lombard Financing arranges facilities against equity listed on the principal Israel venue: Tel Aviv Stock Exchange (TASE). Eligibility at the position level turns on the liquidity and free float of the specific line, its volatility, and the size of the holding relative to its typical traded volume — the same variables that drive the loan-to-value.
Regulator and disclosure
Shares listed in Israel are regulated by Israel Securities Authority (ISA). Substantial-shareholding disclosure is triggered from 5%, and a pledge over a large line is structured with that reporting regime in view so that the transaction remains discreet and compliant. Where a holding sits near a control or takeover threshold, the structure is arranged to avoid disturbing the position.
Funding, custody, and structuring
Facilities are typically arranged for a tenor of twelve to thirty-six months, funded in ILS or in another currency on a cross-currency basis. Throughout the facility the pledged shares are held by a qualified custodian under bankruptcy-remote arrangements, so the security is clean and the holder’s ownership is preserved. Non-recourse, limited-recourse, and full-recourse structures are available, and the choice interacts with the loan-to-value and the pricing. One distinction is worth drawing at the outset: this is not a stock loan in the securities-lending sense, where title passes to a borrower who may on-lend or short the line. Here the shares are pledged and remain the holder’s throughout, as the comparison of Lombard, margin, and stock-loan structures sets out.
| Listing venue(s) | Tel Aviv Stock Exchange (TASE) |
|---|---|
| Regulator | Israel Securities Authority (ISA) |
| Currency | ILS (cross-currency available) |
| Disclosure threshold | From 5% substantial-holding disclosure |
| Principal indices | TA-35, TA-125, TA SME 60 |
| Indicative tenor | 12–36 months, renewable by agreement |
| Recourse | Non-recourse / limited-recourse / full-recourse |
Detail by listing venue
Each venue has a page of its own, setting out how securities-backed credit is arranged against shares admitted there — the disclosure regime, the settlement and custody chain, the eligible segments, and the currency in which a loan against shares is normally drawn.
- Lombard loans against TASE-listed shares — Tel Aviv Stock Exchange, Tel Aviv. ISA-regulated, with disclosure from 5%; indices TA-35, TA-125, TA SME 60.
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On this market, specifically.
The market and its listed universe
The Tel Aviv Stock Exchange is Israel’s only securities exchange, benchmarked by the TA-35, the TA-125 and the TA SME 60, with sector indices for banks and for technology. The listed universe runs to several hundred companies and is weighted towards banking, insurance, real estate and technology. Its defining feature is what is absent: many of the largest Israeli technology companies chose Nasdaq or the NYSE instead, and the dual-listing chapter of the Securities Law lets a company already listed on a qualifying foreign exchange also trade in Tel Aviv while reporting under the foreign regime. Ownership remains concentrated in controlling shareholders, alongside unusually large domestic pension and provident-fund holdings.
Who borrows against listed shares here
Israel’s concentrated holders divide sharply. On one side are the founders, early employees and venture principals of technology and life-sciences companies, whose paper wealth usually sits in a Nasdaq-listed line rather than a Tel Aviv one and is locked up, blacked out, or simply too visible to sell. On the other are the controlling shareholders of the older Israeli business groups, whose pyramid structures were reshaped by the concentration legislation of the last decade and who now hold flatter but still dominant stakes in banks, insurers, energy and real estate. Add diaspora families holding Israeli lines from abroad, and the common thread is liquidity that must not read as an exit.
Disclosure and regulation
Israeli securities law sets substantial-holdings disclosure at 5%, with interested-party rules that engage at lower thresholds for those close to the company — a feature a founder or officer weighs before pledging. The distinctive structuring point is dual listing: many of the larger Israeli technology and biotechnology names trade both in Tel Aviv and in the United States, so a pledge over such a line is arranged with both disclosure frameworks in mind. A Lombard credit over a TASE-listed position keeps the client’s reported holding, and its interested-party status, undisturbed by the security.
The legal form of the security
Security over Israeli assets is a pledge under the Pledges Law, and the perfection step depends on who grants it. A pledge granted by an Israeli company over its assets is registered as a charge with the Registrar of Companies within a short statutory window, and failure to register in time has consequences for the charge’s standing against third parties. A pledge granted by an individual is registered instead at the Pledges Registry. Where the shares are held through a TASE member, a control-style arrangement with that member sits alongside registration. Enforcement in Israel generally involves the Execution Office or the courts, so ask counsel how a realisation would actually run, and how quickly.
Custody and how security is taken
Israeli listed securities are held in dematerialised form through the TASE Clearing House and its member banks and brokers. Shares are typically registered on the company’s register in the name of a nominee company, with beneficial holdings recorded downstream in members’ securities accounts, so a client’s own name does not usually appear on the register at all. Security over such a holding is therefore taken at account level, through arrangements with the TASE member that holds the position and a notation against it, rather than by any change on the issuer’s register. Registration formalities then follow separately, and the exact steps should be confirmed with the custodian and Israeli counsel.
Currency and cross-border considerations
Israel removed the last of its exchange controls in 2003, and the shekel has traded freely since: it is fully convertible, floats against the dollar and the euro, and there is no approval regime for a non-resident borrowing against an Israeli line or for moving proceeds abroad. What remain are largely reporting obligations administered through the banking system. The real currency issue for Israeli holders is a mismatch of their own making: technology wealth is often denominated in dollars through a US listing while family spending, property and school fees are in shekels. A facility can be drawn in either, and choosing deliberately usually matters more than the basis-point difference.
Tax questions to put to your adviser
Israel abolished stamp duty on documents, so the transfer-tax question that dominates some markets does not arise here. The questions for an Israeli tax adviser are about characterisation and withholding instead. Does granting the pledge amount to a sale for capital-gains purposes, and does the answer change if the structure includes any transfer of title or downside protection. Does the holder count as a substantial shareholder, which affects the rate applied to gains and to dividends. What withholding applies to interest paid to a foreign lender, and does a treaty reduce it. In practice the operative document is often the withholding certificate the tax authority issues, so build that step into the timetable.
General information only — not tax advice. Treatment turns on your own circumstances and residence, and on law that changes.
An illustrative example
Consider a technology founder whose holding is in a company dual-listed in Tel Aviv and on Nasdaq, still inside a lock-up and subject to an insider trading window. Selling is neither permitted nor desirable. The existing custody position is pledged, with the registration step chosen according to whether the pledgor is the founder personally or a holding company, and a withholding certificate is obtained before interest is remitted abroad. The founder keeps the shares, the votes and the exposure, and repays from a later planned sale. The illustration is about the sequence of steps, not about any amount, ratio or price.
Illustrative only — not an offer, a quotation, or a commitment to lend.