Implementation of XBRL at the Israel Securities Authority

1. Implementation of XBRL at the Israel Securities Authority December 3-6, 2007 Vancouver, British Columbia, Canada

2. Implementation of XBRL into the ISA’s existing IT systems • Reasons for adopting XBRL • Harmonization with international standards • Adoption of IFRS in Israel (January 2008) • Exposure to foreign capital markets • Two Phases • Collaboration with XBRL International to receive acknowledgment • Changes related to MAGNA (the ISA’s electronic filing system)

3. The IT systems support the ISA’s goals of: Full and fair disclosure Tight supervision Efficient enforcement (including Intelligence and investigation) The IT tools are integrated to support the initiated processes, achieve highest efficiency Introduction – the ISA’s IT systems

4. The ISA’s Information Systems serve a variety of entities: Entities and individuals supervised by ISA General public ISA employees Tel Aviv Stock Exchange Commercial information distributors Other public agencies: Ministry of Finance, Bank of Israel, Ministry of Justice Introduction – the ISA’s IT systems (cont.)

5. Electronic Filing System - MAGNA MAGNA: A computerized system receiving and distributing, via the Internet, all filings required from the entities supervised by the ISA (operational since November 2003) • E-filing of reports (using electronic signature) on MAGNA is mandatory! • The filed electronic report is the only legally binding document! • Predefined identical data fields • Real-time, authentic report publication and fair disclosure: information is immediately accessible to the general public • Extensive use of XML to store and transfer data and electronic signature (PKI technology) • Archive system that stores documents indefinitely

6. Electronic Filing System - MAGNA (cont.) • Advanced search system enabling complete document retrieval according to a large variety of criteria including free text search • Ability to receive non-public reports for internal use (by the ISA) • Fully automatic distribution to the Tel-Aviv Stock Exchange and various commercial information distributors • Uniform and standardized reporting • Most significant cost reduction for companies • Downloadable for further end-user processing and analysis • Free-of-charge for non-commercial users • Over 300,000 reports have been filed, processed and disseminated to date

7. MAGNA - General characteristics • An enormous amount of data: prospectuses financial reports immediate reports transactions with controlling shareholders private placements acquisitions tender offers change of holdings • Forms for companies, mutual funds, investment advisors and portfolio managers • In total, hundreds of thousands of report pages per year

8. MAGNA - General characteristics (cont.) • Thousands of reporting entities throughout Israel, while only a few persons in each entity are approved to e-file reports • Short schedule: approximately one year to set up the system from kickoff to full production – developed by Taldor Group as a “turn key” project in which all aspects of the project were included • Extensive integration and tutoring • Service centers for assistance in reporting • Help desk provides telephone support to users

9. MAGNA’s Characteristics (Software Development Aspects) One of the most advanced technologies in the world (Excellence Awards),MAGNA leads in: • Complex interfaces vis-a-vis internal and external systems • Advanced procedures: • Individually tailored report forms: reporting entity identification and data downloads • Report type identification • Report fields Identification • Sent reports are encoded and signed • Validity and completeness testing • Service centers

10. MAGNA’s Characteristics (Hardware and Communications) • Availability and reliability: • 99.95% up time • No single point of failure • Computer room organization • DRP: Disaster Recovery Plan • Alternative site in case of crash or disaster, located in another city • Unique control & management system for hardware, software and business process control

11. MAGNA - Data Security Requirements • System must provide: • Identification • Authentication • Non-repudiation • Non-disclosure • Protection against intrusion • Protection from viruses and vandals • Protection of internal ISA information systems • Interface protection

12. MAGNA - Data Security Solutions • Solutions used to meet the above requirements: • PKI (Public Key Infrastructure) technologies • Use of external and independent certification authority, approved by law • Use of USB token as a cryptographic device • Use of GAP technology for physical separation as part of the PKI authentication process, including content inspection • Software security • Firewalls by various vendors • Intrusion detection packages • Anti-virus software • Security control and management system

13. Public Reporting Person Stock Exchange Query Files Forms Docs Data Docs Data Receive Docs Distribution Site Reporting Site e -filing system (MAGNA) Docs Data Docs Document Management System GroupWare Red Flags The ISA’s Operational Information System Architecture Control and Management system Data Security Data Market data Alerts

14. Adaptations of MAGNA to XBRL • Mandatory reporting using XBRL – pros/cons • Pros: • Better comparison amongst companies and amongst different periods of time • Maintaining continuity of reporting that began in the HTM era • Lower costs to the reporting entities (fewer fields) • Simpler implementation of reporting (no need to consider which fields to fill) • Choosing numeric fields due to the difficulty of converting verbal fields from Hebrew to English • Preventing "cherry picking" and other manipulations

15. Adaptations of MAGNA to XBRL (cont.) • Mandatory reporting using XBRL – cons. • Reporting entities are under mandatory requirements to fill in certain fields, thus discretionary decision is restricted • Restrictions on data provided to investors

16. Adaptations of MAGNA to XBRL (cont.) • No legislation changes are required • e-Filing of reports on MAGNA remains mandatory • Predefined fields remain obligatory • Transition process invisible to the reporting entity • The HTML fields remain in Hebrew • PDF file attached in the same manner as before • The only changes needed: adoption of IFRS requires changes in the fields

17. Adaptations of MAGNA to XBRL (cont.) • MAGNA Software Changes • About 200 fields were chosen from about 4000 that exist in the IFRS taxonomy • The fields were incorporated into the HTML file • In addition to creating an XML file, MAGNA will also automatically create an XBRL file, according to the taxonomy acknowledged by XBRL International • A new webpage created to display and enable download of financial reports in XBRL format

18. Steps taken to receive acknowledgement from XBRL International Inc. (XII) • Joining as a direct member of XII and participation at the XBRL 2006 annual conference • Developing the Israeli taxonomy (in a nutshell): • Based on the IFRS-GP taxonomy, prepared by IASB • A number of fields added (due to local legislation) • Translation of all IFRS terms into Hebrew

19. Developing the Israeli taxonomy (Cont.) • Use of online automatic tool (IFRS-GP Taxonomy Modules Manager) for base Schema creation • The base schema inherits from IFRS-GP including the relevant linkbases: Balance Sheet and two Income Statements (by nature, by function) • Using UBmatrix and Fujitsu tools to import the base Schema into the main Schema

20. Developing the Israeli taxonomy (Cont.) • Creating presentation links for relevant elements from Cash Flow • Adding two label Linkbases (one in English and one in Hebrew) for translation purposes • Adding extensions and creating presentation Linkbase for these extensions • Adding Reference Linkbase for translated legislation to English • Composing the summary document

21. Acknowledgment from XBRL International • Development process (Cont.) • Finally: Creating an XBRL instance document out of the MAGNA’s XML • Acknowledgment • the ISA recently received acknowledgement recognition from XII • Assistance from an XBRL expert • Mr. George Farkas from XBI Software Inc.

22. Demonstrations – e-filing using XBRL/MAGNA • e-Filing on MAGNA: • http://tofes.magna.isa.gov.il/tofes/general/pages/frmMain.asp?Type=303030303030303030303031 • MAGNA today: Hebrew Distribution Site • http://www.magna.isa.gov.il/ • MAGNA today: English Distribution Site • http://www.magna.isa.gov.il/Default.aspx?lang=en • MAGNA as of January 1st 2008: English Distribution Site containing XBRL • http://www.isa.gov.il/xbrl/

23. Steps to be taken in the near future • Expanding XBRL implementation in Israel • Running a pilot among 61 reporting entities that had implemented the IFRS standards by way of early adoption • Forming an Israeli XBRL jurisdiction • Expanding the usage of XBRL standards to additional sectors (governmental as well as the private sector)

24. Thank You For further information: Natan Herscovitz natanh@isa.gov.il 972-2-6556453