After we exclusively reported at the end of July that Israel’s Binary Options law, still working its way through the mechanisms of the country’s Knesset parliament, would be delayed into Q1-2018 at earliest, online newspaper The Times of Israel has written up a dramatic report of the final day of deliberations on the bill at the Knesset Reforms Committee late last week.
David Bitan, Likud party
According to The Times of Israel, after the bill had been voted on and approved by the Knesset members present, one of Israel’s most politically powerful people – the ruling Likud party’s coalition chairman, David Bitan – came into the room and demanded to change the wording of the bill.
As Israel’s government is a coalition of various parties, with the largest (Likud) party having less than half of the 61 seats needed to control the Knesset, all bills which go to the Knesset for final vote must effectively go through Mr. Bitan. And, with the Knesset now in summer recess until late October, any votes requiring a special Knesset session to be reconvened also requires Mr. Bitan’s approval.
Back to last Thursday’s meeting… David Bitan did not arrive alone to the committee meeting. According to The Times of Israel, he was accompanied by SpotOption CFO Moshe Avrahami. SpotOption, the largest provider of Binary Options platforms to brokers, likely has the most to lose should the bill pass in its current form, which would require the company to relocate virtually all of its activities outside the country.
Apparently both Mr. Bitan and Mr. Avrahami began to address the committee, arguing that the law should not apply to technology companies (such as SpotOption) which effectively sell software and do not engage directly with trading clients.
Mr. Bitan also said that he would not reconvene a special Knesset session to vote on the bill during the summer, saying “I’m very busy. And I can’t bring this up during the Knesset recess. Why is this so urgent? It can wait.”
Soon after the exchange in the room between Mr. Bitan and Reforms Committee Chair Rachel Azaria (Kulanu party, also a coalition member), a Knesset usher asked the press present to leave the room. However a source who remained told The Times of Israel that Mr. Bitan told Ms. Azaria and other government officials present that a family prominently involved in SpotOption are leaders of the Georgian faction of the Likud Central Committee, and that he (Bitan) needs their support to maintain his position in the Likud party.
The result?
As with much in Israeli politics, things remain muddled.
Technically, the bill was approved (which happened even before Mr. Bitan entered the room last week) and is ready to go back to the Knesset for its second and third readings followed by a final vote into law. (It will become law three months after a final vote).
However the Knesset does not reconvene until late October. If the bill’s backers including Ms. Azaria and Israel Securities Authority Chairman Shmuel Hauser (the real power behind the bill) don’t want to wait until then, then they may have to capitulate to Mr. Bitan and his backers and water the bill down to exclude a ban on platform providers, only banning Binary Options brokers. We’d note that the bill was already diluted once from its original intention, with a provision to ban unlicensed FX and CFD brokers removed.
Even if the bill’s backers are patient and are willing to wait until October, the powerful Mr. Bitan may be able to delay it even further, if he and his backers don’t get what they want.