Israel's 20 shekel bill. Photo: WikiCommons.

Israel’s Knesset took one step closer to allowing foreign funds to distribute investment products in the Jewish state, when the Finance Committee’s sub-committee on capital markets, insurance and savings on Sunday approved Amendment 15 to the Joint Investment Trust Law, Israel’s Globes business daily reported on Monday.

The amendment still needs to be approved by the Knesset plenum. The Israel Securities Authority, which promoted the change, said the amendment will likely be fully approved and enacted in 2015, according to Globes.

Subcommittee Chairman MK Yitzhak Cohen, from the Shas Party, said the committee’s approval marked “a historic day for the Israeli capital market.”

Cohen said, “For the first time, major overseas financial bodies, banks and funds, will be able to enter the Israeli market, and this will boost competition to the advantage of the average Israeli investor, who will now have a greater choice of investment products and will benefit from a substantial fall in the cost of investment.”

Israel Securities Authority chairman Prof. Shmuel Hauser said, “The amendment to the law will enable the Israeli public to diversify its investment portfolio and lower the cost of investment, and will mean greater competition in the industry.”

Opponents of the plan included representatives of the Israel Association of Mutual Funds and the Federation of Israeli Chambers of Commerce that argued that the amendment would not sufficiently protect Israeli investors from foreign banks.