Implementation of XBRL at the Implementation of XBRL at the Israel Securities AuthorityIsrael Securities Authority

December 3-6, 2007

Vancouver, British Columbia,

Canada

Reasons for adopting XBRLHarmonization with international standardsAdoption of IFRS in Israel (January 2008)Exposure to foreign capital markets

Two PhasesCollaboration with XBRL International to

receive acknowledgment Changes related to MAGNA (the ISA’s (the ISA’s

electronic filing system) electronic filing system)

Implementation of XBRL into the ISA’s Implementation of XBRL into the ISA’s existing IT systemsexisting IT systems

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

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.)

MAGNA: A computerized system receiving and distributing, via theInternet, 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

Electronic Filing System - MAGNA

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

Electronic Filing System - MAGNA(cont.)

An enormous amount of data:

MAGNA - General characteristics

financial reports

immediate reports

transactions with

controlling shareholders

private placements

acquisitions

Forms for companies, mutual funds, investment advisors and portfolio managers

In total, hundreds of thousands of report pages per year

prospectuses

change of holdings

tender offers

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

MAGNA - General characteristics (cont.)

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 identificationReport fields IdentificationSent reports are encoded and signedValidity and completeness testingService centers

MAGNA’s Characteristics (Software Development Aspects)

Availability and reliability:99.95% up timeNo single point of failure

Computer room organization

DRP: Disaster Recovery PlanAlternative site in case of crash or

disaster, located in another city

Unique control & management system for hardware, software and business process control

MAGNA’s Characteristics (Hardware and Communications)

System must provide:IdentificationAuthenticationNon-repudiationNon-disclosureProtection against intrusionProtection from viruses and vandalsProtection of internal ISA information

systemsInterface protection

MAGNA - Data Security Requirements

Solutions used to meet the above requirements:

PKI (Public Key Infrastructure) technologiesUse of external and independent certification

authority, approved by lawUse of USB token as a cryptographic deviceUse of GAP technology for physical

separation as part of the PKI authentication process, including content inspection

Software securityFirewalls by various vendors Intrusion detection packagesAnti-virus softwareSecurity control and management system

MAGNA - Data Security Solutions

Architecture

Reporting PersonPublic

Stock Exchange

Reporting Sitee -filing system

(MAGNA)Distribution Site

The ISA’s Operational Information System

Document Management

SystemGroupWare

FormsFiles

DocsData DocsQuery

Data

Docs

Receive

Docs

Docs Data

Data Security

Red FlagsMarket

data

Data

Alerts

Control and Management system

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

Adaptations of MAGNA to XBRL

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

No legislation changes are requirede-Filing of reports on MAGNA remains

mandatoryPredefined fields remain obligatory

Transition process invisible to the reporting entityThe HTML fields remain in HebrewPDF file attached in the same manner as

beforeThe only changes needed: adoption of

IFRS requires changes in the fields

Adaptations of MAGNA to XBRL (cont.)

MAGNA Software ChangesAbout 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

Adaptations of MAGNA to XBRL (cont.)

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 IASBA number of fields added (due to

local legislation)Translation of all IFRS terms into

Hebrew

Steps taken to receive acknowledgement from XBRL International Inc. (XII)

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

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

Developing the Israeli taxonomy (Cont.)

Development process (Cont.)Finally: Creating an XBRL instance

document out of the MAGNA’s XML

Acknowledgmentthe ISA recently received

acknowledgement recognition from XII

Assistance from an XBRL expertMr. George Farkas from XBI Software

Inc.

Acknowledgment from XBRL International

e-Filing on MAGNA:http://tofes.magna.isa.gov.il/tofes/general/page

s/frmMain.asp?Type=303030303030303030303031

MAGNA today: Hebrew Distribution Sitehttp://www.magna.isa.gov.il/

MAGNA today: English Distribution Sitehttp://www.magna.isa.gov.il/Default.aspx?lang

=en

MAGNA as of January 1st 2008: English Distribution Site containing XBRLhttp://www.isa.gov.il/xbrl/

Demonstrations – e-filing using

XBRL/MAGNA

Expanding XBRL implementation in IsraelRunning a pilot among 61 reporting

entities that had implemented the IFRS standards by way of early adoption

Forming an Israeli XBRL jurisdictionExpanding the usage of XBRL standards

to additional sectors (governmental as well as the private sector)

Steps to be taken in the near future

Thank YouThank You

For further information:

Natan Herscovitz

natanh@isa.gov.il

972-2-6556453