Israeli Fixed Income

Acupay’s Israeli fixed income tax compliance solution allows Israeli issuers to tap foreign markets via different structures depending on the issuer’s needs and the Israeli Tax Authorities’ guidance and rulings for a particular issuance.

Acupay will work with the issuer, the issuer’s counsel, tax counsel and underwriter as well as with the Israeli Tax Authorities; this allows us to develop tax mechanics and collection systems for the procurement of tax compliance information while also allowing Israeli issuers to raise financing from domestic and global markets. We do not supply a “one-size-fits-all” solution, but will ensure that the tax compliance procedures and the tax compliance information collected will fit any requirements by the Israeli Tax Authorities. At the same time, Acupay is conscious of developing tax mechanics that do not impact the marketability of the securities. Therefore, Acupay’s procedures will always target the back-office staff of the investors’ custodian banks and whenever possible, we rely on “Know Your Customer" (KYC) principles.

After the development phase, the tax compliance solution is implemented by cooperating with the issuer CSD, the ICSDs, and the paying agent. The Acupay tax compliance procedures create a tax compliance communications structure for the issuer, the tax authorities, the clearing systems, the custodians and the Israeli Tax Authorities. Acupay collects tax compliance information via its custodial network on settlement, for each coupon payment date and (if necessary) daily. The Acupay System automatically reconciles the data received from custodian banks and clearing system and creates payment reports with tax breakdowns for the paying agent, the issuer, the clearing systems and the custodian banks. After the payment date, it creates the necessary reports and compiles the required documentation for the necessary tax returns to the Israeli Tax Authorities as specified in local legislation and the respective tax ruling.

Acupay’s tax mechanics support plain vanilla Yankee bonds, as well as more complicated structures that allow issuers to tap the domestic markets via the TASE and at the same time offer the securities to investors all over the globe, including the Yankee market, the Kangaroo market, the Maple market, the Samurai market, the Bulldog market, the Panda market, and the Dim Sum market.

In July 2013, Acupay supported the US $1.4 bn. Yankee issuance by The Israeli Electric Company that was deposited in DTC and distributed globally via a 144A and Reg S tranche.