Banking (Licensing) Law, 5741-1981
חוק הבנקאות (רישוי), תשמ"א-1981
Published: 1981-04-26Consolidated Hebrew text as of 2026-08-03 · Last amended 2026-08-02✓ Amendment status checked against the Knesset legislation record on 2026-09-29
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Chapter III-A: Holding of Means of Control by Institutional Investors
Definitions§
27a.
In this Chapter –
"institutional investor" – any of the following:
(1)a managing company – in respect of all the provident funds under its management;
(2)a manager of a joint investment fund in trust, in respect of all the funds under its management;
(3)another corporation that holds or manages the funds of others and which the Minister of Finance, after consultation with the Governor, has determined that the provisions of this Chapter shall apply to;
"related institutional investors" – institutional investors controlled by the same banking corporation or by a banking holding corporation of that banking corporation, as well as institutional investors that are not controlled by a banking corporation or by a banking holding corporation as aforesaid but are managed by such a corporation and on whose investment committee there is a member who is an employee or a director of such a corporation;
"shares" – shares and securities convertible into shares, traded on a stock exchange as defined in the Securities Law.
Restrictions on an Institutional Investor§
27b.
An institutional investor shall not hold means of control in a banking corporation that controls it or in a banking corporation controlled by a banking holding corporation that also controls the institutional investor.
Holding of Related Institutional Investors in Another Banking Corporation§
27c.
(a)Related institutional investors shall not hold, in aggregate, means of control in another banking corporation at a rate exceeding five percent of any type of means of control.
(b)The share of each of the related institutional investors in the permitted holding rate of means of control as referred to in subsection (a) shall be determined once per quarter according to the proportional share of the value of its investments in shares out of the total value of all investments in shares of all the related institutional investors.
(c)No later than the 14th day of December, March, June and September of each year, a related institutional investor shall report to the banking corporation that controls it or to the banking holding corporation that controls it, as the case may be, on the value of its holdings in shares at the end of the month preceding the reporting date; the banking corporation or banking holding corporation, as the case may be, shall calculate the proportional share that each related institutional investor is permitted to hold in means of control as referred to in subsection (b), and shall notify the institutional investor and the Supervisor of these rates by the 20th day of the said months; these rates shall be binding on the institutional investor in respect of the quarter beginning on 1 January, 1 April, 1 July and 1 October, as the case may be.
(d)If the holding of a related institutional investor in means of control has exceeded the rate permitted to it under subsection (b) as a result of a change in the permitted holding rate as determined in a notice given to it as referred to in subsection (c), it shall reduce its said holding to the permitted rate within one month from the date of receipt of the notice under subsection (c).
Sale of Means of Control§
27d.
If an institutional investor holds means of control in a banking corporation contrary to the provisions of this Chapter, and 14 days' advance written warning has been given to it, the Supervisor shall apply to a District Court with a request for directions regarding the sale of the excess means of control.
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Contact Us →Chapter III-B: Control and Holding of Means of Control in a Managing Company, in a Manager of a Joint Investment Fund in Trust and in a Corporation Engaged in Portfolio Management
Holding of Means of Control by a Banking Corporation§
27e.
(a)Notwithstanding the provisions of this Law –
(1)a banking corporation shall not hold means of control in a managing company or in a manager of a joint investment fund in trust;
(2)a banking corporation shall not hold more than ten percent of any type of means of control in a corporation that controls a managing company or that controls a manager of a joint investment fund in trust, or in a corporation that holds more than twenty-five percent of any type of means of control in such a company or fund manager.
(b)Notwithstanding the provisions of this Law –
(1)a banking corporation shall not control and shall not hold more than five percent of any type of means of control in a corporation whose business is the management of investment portfolios that include assets of a joint investment fund in trust, assets of a provident fund or assets of an insurer that are credited to its insureds;
(2)a banking corporation shall not hold more than twenty percent of any type of means of control in a corporation that controls a corporation whose business is portfolio management as referred to in paragraph (1), or in a corporation that holds more than twenty-five percent of any type of means of control in a corporation whose business is as aforesaid.
Holding of Means of Control by a Person who Controls a Banking Corporation§
27f.
(a)A person who controls a banking corporation shall not hold more than five percent of any type of means of control in a managing company or in a manager of a joint investment fund in trust, and shall not hold more than ten percent of any type of means of control in another corporation that controls one of these or that holds more than twenty-five percent of any type of means of control therein.
(b)A person who controls a banking corporation shall not hold more than five percent of any type of means of control in a corporation whose business is portfolio management as referred to in section 27e(b), and shall not hold more than twenty percent in a corporation that controls a corporation whose business is portfolio management as aforesaid or that holds in a corporation whose business is as aforesaid more than twenty-five percent of any type of means of control.
(c)
(1)In this subsection –
"micro bank" – a small bank whose asset value did not exceed the determining threshold, or which exceeded the determining threshold in certain years but not for two consecutive years;
"determining threshold" – a rate of 2.5% of the asset value of all banks in Israel or another rate determined pursuant to paragraph (6);
"transition period" – a period of three years commencing at the end of the second financial year out of two consecutive years in which the bank's asset value exceeded the determining threshold;
(2)subsections (a) and (b) shall not apply to a person who controls a micro bank; if the bank ceases to be a micro bank, those subsections shall apply to the person who controls it upon the expiry of the transition period;
(3)An advisory team is hereby established whose function is to advise the Governor and the Minister of Finance regarding a change to the determining threshold (in this Section and in section 27f1 – the advisory team), whose members are:
(a)the Supervisor of Banks and the Head of the Research Division of the Bank of Israel;
(b)the Budget Director at the Ministry of Finance;
(c)the Commissioner of Competition;
(d)the Commissioner of Capital Markets, Insurance and Savings;
(e)the Chairperson of the Israel Securities Authority;
(f)the Attorney General, or a Deputy Attorney General authorised by the Attorney General for this purpose;
(4)the Budget Director at the Ministry of Finance and one of the representatives of the Bank of Israel as referred to in paragraph (3)(a), as decided by the Governor, shall serve as joint chairpersons of the advisory team;
(5)the Minister of Finance may appoint a public representative as a member of the advisory team, who shall have expertise in one or more of the following fields: banking, finance or competition, provided that the Minister has prescribed by Regulations the eligibility conditions for such appointment and tenure, including conditions relating to the prevention of conflicts of interest, the absence of a criminal record and a duty of confidentiality; however, failure to appoint a public representative pursuant to this paragraph shall not affect the existence of the advisory team, its powers or the validity of its actions;
(6)the Governor, with the consent of the Minister of Finance, after consultation with the advisory team and with the approval of the Finance Committee of the Knesset, may prescribe by Order a different rate for the determining threshold, which shall not exceed 5% of the asset value as referred to in the definition of "determining threshold", having regard, inter alia, to the level of competition in the credit market for households and for small and medium-sized businesses and to the benefit of the economy.
Transmission of Information from an Authority to the Advisory Team§
27f1.
(a)If the Governor, with the consent of the Minister of Finance, has approached the advisory team for the purpose of changing the determining threshold, the team may approach an authority with a request to receive information held by the authority that it requires for the purpose of carrying out its function; if it has so approached, the authority shall transmit the information to it, notwithstanding anything provided in any law, including specific information relating to a particular financial body, but excluding information that could identify a customer of the financial body or personal information as defined in section 3 of the Privacy Protection Law, 5741-1981.
(b)A member of the advisory team may use information received pursuant to subsection (a) for the purpose of the advisory team's function only, and may for that purpose disclose it to an employee of an authority or to an employee of a body on whose behalf a member serves on the advisory team.
(c)A member of the advisory team, an employee of an authority or an employee of a body on whose behalf a member of the advisory team serves shall not disclose information received pursuant to subsection (a) and shall not make any other use of it, except in accordance with the provisions of subsection (b) or pursuant to a court order; a person who contravenes this provision is liable to one year's imprisonment.
(d)In this Section, "authority" – any of the following:
(1)the Capital Market, Insurance and Savings Authority;
(2)the Bank of Israel, in respect of information held by the Banking Supervision Division;
(3)the Israel Securities Authority;
(4)the Competition Authority, in respect of information collected by virtue of the power of the Commissioner of Competition under section 44a of the Economic Competition Law, 5748-1988, if the Commissioner considers that its transmission is required for the work of the team and is not likely to cause harm to the performance of the authority's functions under law.
Charge as Holding§
27g.
The provisions of sections 27e and 27f shall also apply to the holding of means of control as security for an obligation, except for means of control intended in good faith to serve as security for an obligation in the hands of a banking corporation, provided that the provisions of section 26 shall apply to the banking corporation; nothing in the provisions of this Section shall derogate from the provisions of the Joint Investments in Trust Law, 5754-1994, or from the provisions of the Financial Services Supervision Law (Provident Funds), 5765-2005.
Sale of Means of Control§
27h.
The provisions of section 27 shall apply, with the necessary modifications, to a banking corporation and to a person who controls it, who are controlling or holding means of control contrary to the provisions of this Chapter.
Non-Application to Certain Banks and Foreign Banks§
27i.
The provisions of this Chapter shall not apply to a bank, to a foreign bank or to a person who controls either of them, if the number of their customers at their branches in Israel in respect of whom one of the following conditions is met does not exceed 5,000 –
(1)the total assets of the customer held at the bank or foreign bank, as the case may be, does not exceed NIS 5 million;
(2)the total liabilities of the customer to the bank or foreign bank, as the case may be, does not exceed NIS 5 million.
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Contact Us →Chapter IV: Actions Requiring a Permit
Branches§
28.
(a)A banking corporation shall not open a branch or conduct business therein except pursuant to a permit granted by the Supervisor or by an employee of the Bank of Israel authorised by the Supervisor for that purpose, after consultation with the Licences Committee.
(b)(Repealed)
(c)The obligation to obtain a branch permit in a foreign state shall not apply to a foreign bank.
Closure of Permanent Branches§
28a.
(a)In this Section –
"Supervisor" – including an employee of the Bank of Israel authorised by the Supervisor for that purpose;
"permanent branch" – a branch for which a permit was granted for an unlimited period and which provides its services at a fixed location.
(b)A banking corporation wishing to close a permanent branch shall submit a reasoned written application to the Supervisor; the Supervisor may require additional particulars that the Supervisor considers necessary for the examination of the application.
(c)A decision on an application for the closure of a permanent branch shall be made after consultation with the Licences Committee; however, the Supervisor shall not decide to object to the application without first giving the banking corporation an opportunity to be heard; if the Supervisor decides to approve the application for the closure of the permanent branch, the Supervisor may make the closure subject to conditions, including the deferral of the closure date.
(d)The Supervisor shall issue a reasoned written decision within 90 days from the date of receipt of an application for the closure of a permanent branch, and if the Supervisor has requested additional particulars as referred to in subsection (b) – within 90 days from the date of their receipt.
(e)If a decision has been given under this Section approving the closure of a permanent branch, the banking corporation shall notify the customers of the branch of its closure by written notice and also by the means by which it customarily transmits notices to those customers, and shall publish a notice of its closure on its website; the banking corporation shall be entitled to close the branch upon the expiry of 60 days from the date of delivery of the written notice as aforesaid.
(f)The Supervisor shall report to the Economics Committee of the Knesset, once a year, on the implementation of the provisions of this Section and on the policy of the Supervisor and the Licences Committee in examining an application by a banking corporation to close a permanent branch.
(g)Notwithstanding the provisions of subsection (f), during the period from the 1st day of Tevet 5785 (1 January 2025) until the 1st day of Tevet 5788 (31 December 2027), a report as referred to in that subsection shall be submitted once every six months; the first report shall be submitted by the 5th day of Tammuz 5785 (1 July 2025).
Considerations in the Granting of a Branch Permit and in a Decision on the Closure of a Permanent Branch§
29.
In the granting of a branch permit and in a decision on the closure of a permanent branch under section 28a, the following matters shall be taken into account:
(1)the contribution of the branch to the services provided to the customers of the banking corporation or to the development of its business;
(2)the volume of the banking corporation's business, its capital, its profitability and its ability to manage the branch;
(3)in respect of a branch outside Israel – the ability of the Supervisor to supervise its activity;
(4)the economic policy of the Government;
(5)the public interest.
Cancellation of a branch permit§
30.
(a)The Supervisor may cancel a branch permit, after having given the banking corporation a reasonable opportunity to state its arguments and after consulting the Licensing Committee, if one of the following has occurred:
(1)the corporation has not commenced conducting business at the branch or has ceased to conduct it;
(2)the corporation has breached a material condition of the permit;
(3)the corporation has breached a material provision of this Law, of the Ordinance or of the Bank of Israel Law, in the conduct of the branch;
(4)with regard to a branch outside Israel – the Supervisor is unable to supervise its activity and is of the opinion that this may cause harm to ensuring the stability of the corporation;
(5)reasons of public interest indicate the need to cancel the permit.
(b)Where a branch permit has been cancelled, the banking corporation shall cease to conduct business at the branch within a period to be determined by the Supervisor.
Holding means of control in a foreign corporation§
31.
(a)A banking corporation or a banking holding corporation shall not hold more than ten percent of a particular type of means of control in a foreign corporation that, had it conducted business in Israel, would have been required to hold a licence under this Law, except pursuant to a permit granted by the Governor after consulting the Licensing Committee.
(b)The provisions of this section shall not apply to a foreign bank or to a banking holding corporation that controls a foreign bank and does not control other banking corporations.
Considerations in granting a permit under section 31§
32.
In granting a permit under section 31, the following matters shall be taken into account:
(1)the contribution of the foreign corporation to the services provided to the customers of the permit applicant or of banking corporations under its control, or to the development of the business of the permit applicant;
(2)the scope of business of the permit applicant, its capital, profitability and ability to manage the foreign corporation;
(3)the ability of the Supervisor to receive information on the activity of the foreign corporation;
(4)the economic policy of the Government;
(5)the public interest.
Cancellation of a permit under section 31§
33.
(a)The Governor may cancel a permit under section 31, after having given the permit holder a reasonable opportunity to state its arguments and after consulting the Licensing Committee, if one of the following has occurred:
(1)the permit holder has breached a material condition of the permit;
(2)the permit holder has breached a material provision of this Law, of the Ordinance or of the Bank of Israel Law, in connection with the foreign corporation;
(3)the Supervisor is not receiving sufficient information on the activity of the foreign corporation, and the Governor is of the opinion that this may cause harm to ensuring the stability of the permit holder;
(4)reasons of public interest indicate the need to cancel the permit.
(b)Where a permit has been cancelled as aforesaid, the permit holder shall, within a period to be determined by the Governor, sell the means of control in the foreign corporation until it no longer holds more than ten percent of any type of means of control in the foreign corporation; if it has not done so, the District Court may, on the application of the Supervisor, appoint a receiver for the sale of the means of control, as aforesaid.
Control and holding of means of control in a banking corporation§
34.
(a)
(1)A person shall not hold more than five percent of a particular type of means of control in a banking corporation or in a banking holding corporation, except pursuant to a permit granted by the Governor after consulting the Licensing Committee;
(2)Notwithstanding paragraph (1), where the banking corporation is a small bank controlled by a person who has received a permit under subsection (b), a person shall not hold more than ten percent of a particular type of means of control in it or in a banking holding corporation that controls it, except pursuant to a permit granted by the Governor after consulting the Licensing Committee; the provisions of this paragraph with regard to the holding of means of control in a banking holding corporation shall not apply if the said holding corporation is not controlled by a person who has received a permit under subsection (b);
(3)Where the banking corporation has ceased to be a small bank, paragraph (1) shall apply upon the expiry of the transitional period, provided that if the Governor has found that special circumstances exist, the Governor may extend the transitional period by a further period; in this paragraph, "transitional period" – a period of nine months commencing at the end of the second financial year out of two consecutive years in which the value of the assets of the banking corporation exceeded 5% of the value of the assets of all banks in Israel;
(4)Where the banking corporation has ceased to be controlled by a person who has received a permit under subsection (b), the provisions of paragraph (1) shall apply as of the date of cancellation of the control permit;
(5)Where a banking holding corporation that controls a small bank has ceased to be controlled by a person who has received a permit under subsection (b), the provisions of paragraph (1) shall apply as of the date of cancellation of the control permit with regard to the holding of means of control in the banking holding corporation;
(6)The Supervisor may give instructions and prescribe conditions with regard to the exercise of means of control in a particular bank during the transitional period as defined in paragraph (3) or during the period determined by the Governor as referred to in that paragraph;
(7)If the Governor is of the opinion that a person has acted contrary to the instructions and conditions prescribed pursuant to paragraph (6), the Governor may exercise against that person the powers vested in the Governor under section 35, as if that person had acted without a permit under this section, and the provisions of section 35 shall apply in this regard, with the necessary modifications.
(a1)A person shall not agree with another with regard to their voting for the appointment of a director in a banking corporation or in a banking holding corporation, including with regard to their voting for the termination of office, except pursuant to a permit granted by the Governor after consulting the Licensing Committee; this provision shall not apply to a group of holders as defined in section 11d(a)(3)(b) of the Ordinance, with regard to a vote for the appointment of a director nominated as a candidate by them under that section, nor shall it apply to a holder of means of control who has agreed with another that the other shall vote in the holder's name and on the holder's behalf without discretion, as directed by the holder of the means of control, provided that if the other party itself holds means of control in the banking corporation or in the banking holding corporation, as the case may be, it shall not vote in the name and on behalf of more than one other holder.
(b)A person shall not control a banking corporation or a banking holding corporation, except pursuant to a permit granted by the Governor after consulting the Licensing Committee.
(b1)In granting a permit under this section, the considerations set out in section 6 shall be taken into account, with the necessary modifications, including the suitability of the applicant to control, to hold the quantity of means of control as requested or to agree with regard to voting for the appointment of a director, including for the termination of office, including the applicant's business experience, occupations and other businesses, financial soundness and integrity; the possible implications of granting the permit for existing or future control of the banking corporation or the banking holding corporation shall also be taken into account.
(b2)In a permit under this section, the Governor shall prescribe, inter alia, conditions with regard to the prevention of conflicts of interest as well as conditions for ensuring the stability of the permit holder and the banking corporation; such conditions shall be prescribed having regard to internationally accepted standards in this matter.
(c)A person who holds means of control in a banking corporation or in a banking holding corporation shall not transfer them to another knowing that the transferee requires a permit under this section and does not hold such permit.
(d)(Repealed)
(e)The provisions of subsections (a) and (b) shall not apply to a person who holds means of control in a banking corporation or in a banking holding corporation by virtue of a transfer by operation of law.
(f)The provisions of this section shall not apply with regard to means of control in a foreign bank or in a banking holding corporation that controls a foreign bank and does not control another banking corporation, unless the holder is a resident of Israel.
(g)The provisions of this section shall also apply to the holding of means of control in a banking corporation or in a banking holding corporation as security for an obligation, except for means of control held in good faith as security for an obligation by a banking corporation and whose quantity in any one securities account of a particular customer does not exceed 0.001% of that type of means of control.
Cancellation or modification of a permit under section 34a§
34a.
(a)The Governor may cancel or modify a permit under section 34a after consulting the Licensing Committee, if there were reasonable grounds to presume that one of the following exists:
(1)the permit holder has breached a material condition of the permit;
(1a)the permit holder has breached a provision of section 27f;
(2)the permit holder or an office holder thereof has been convicted of an offence whose gravity, nature or circumstances justify the cancellation or modification of the permit;
(3)with regard to a permit holder that is a corporation – an order for its winding-up has been made, or a receiver has been appointed over its assets or a material part thereof due to non-payment of a debt, and with regard to a permit holder who is an individual – a receiving order has been made against that person in bankruptcy proceedings or that person has been declared legally incompetent;
(3a)the permit holder is a significant real-sector corporation or a person who controls it, holding means of control in a banking corporation that is a significant financial body or in a banking holding corporation that controls it, or controlling such a banking corporation, all in contravention of the provisions of section 35b(b);
(3b)the permit holder holds means of control in a significant real-sector corporation and also controls a banking corporation that is a significant financial body, in contravention of the provisions of section 35b(c);
(3c)the permit holder controls a banking corporation that is a significant financial body and also controls an insurer that is a significant financial body, in contravention of the provisions of section 35b(d);
(4)there is a genuine concern of harm to the stability of the banking corporation or a concern of harm to the public interest if the permit is not cancelled or modified.
(b)The Governor shall not modify or cancel a permit as referred to in subsection (a), unless the permit holder has been given an opportunity to state its arguments and to remedy the breach within a period of 30 days.
(c)
(1)Where an indictment has been filed against a permit holder or an office holder thereof, for an offence which in the Governor's opinion a conviction therefor would justify cancellation or modification of the permit, by reason of its gravity, nature or circumstances, the Governor may, after having given the permit holder an opportunity to state its arguments and after consulting the Licensing Committee, modify the permit and prescribe therein instructions and conditions that shall apply during a period to be determined;
(2)The provisions of paragraph (1) shall also apply where a criminal investigation has been opened against a permit holder or an office holder thereof, for an offence as referred to in paragraph (1), provided that the Governor has consulted the Attorney General with regard to the criminal investigation.
Governor's instructions to a person who acted without a permit or contrary to conditions under section 34§
35.
(a)Without prejudice to the provisions of section 34a, if the Governor is of the opinion that a person has acted without a permit as referred to in section 34 or contrary to the conditions of a permit as referred to in section 34(b2), the Governor may, after having given that person an opportunity to state that person's arguments and after consulting the Licensing Committee, instruct –
(1)that means of control held by that person, all or part thereof, be sold within a period to be determined, so that that person does not hold means of control of any type above the rate permitted for holding without a permit under section 34;
(2)that voting rights or rights to appoint directors by virtue of means of control held by that person without a permit under section 34 shall not be exercised;
(3)that a vote by virtue of means of control held by that person without a permit under section 34 shall not be counted in the tally of votes at that vote;
(4)that the appointment of a director caused by that person be cancelled.
(b)Where a person holds means of control in a banking corporation or in a banking holding corporation by virtue of a transfer by operation of law, at a rate requiring a permit under the provisions of section 34, the Governor may, after having given the holder an opportunity to state that person's arguments and after consulting the Licensing Committee, instruct that person to sell the said means of control, all or part thereof, within a period to be determined, so that that person does not hold means of control of any type above the rate permitted for holding without a permit under section 34.
(c)Where the Governor has instructed under the provisions of subsection (b) that means of control be sold, the Governor may give an instruction as referred to in subsection (a)(2) to (4), with the necessary modifications.
(d)Where the holder has not sold the means of control in accordance with the Governor's instruction under subsections (a) or (b), the District Court may, on the application of the Supervisor, appoint a receiver for the sale of the means of control as aforesaid.
(e)A banking corporation shall do its utmost to prevent a person from acting by virtue of means of control held in contravention of the provisions of section 34.
Appointment of a director in special cases§
35a.
(a)Where a director has not been appointed in a banking corporation or where that director's tenure has ceased for any reason, including failure to obtain a permit under section 34(a1), cancellation of an appointment as referred to in section 35(a)(4), the Supervisor's objection to an appointment under section 11a(a) of the Ordinance or termination of tenure under section 11a(e) of the Ordinance, and as a result the number of directors has fallen below the number determined by the Supervisor as the appropriate number of directors in that banking corporation (in this section – the appropriate number of directors), or as a result the composition of the board of directors of the banking corporation does not meet all the requirements of law, the Supervisor shall instruct that the general meeting of the banking corporation be convened within three months of the date of the giving of the instruction, or within a shorter period as the Supervisor may instruct if the Supervisor is of the opinion that the circumstances of the matter so justify, provided that it shall not be less than sixty days, for the purpose of appointing directors to complete the appropriate number of directors or to arrange the composition of the board of directors so that it meets all the requirements of law, as the case may be.
(b)Where directors have not been appointed by the general meeting as required pursuant to the Supervisor's instruction as referred to in subsection (a), the Supervisor shall instruct again that the general meeting of the banking corporation be convened within sixty days of the date of the giving of the repeated instruction; where directors have not been appointed as required even after the Supervisor's repeated instruction, the Committee for the Appointment of Directors in Banking Corporations appointed under section 36a (in this section – the Committee) shall appoint the directors as required for the purpose of completing the appropriate number of directors or for the purpose of arranging the composition of the board of directors so that it meets all the requirements of law, as the case may be.
(c)The term of office of a director appointed by the Committee under the provisions of subsection (b) shall be until the date of the second annual general meeting following the appointment; for this purpose, "annual general meeting" – as defined in the Companies Law.
(d)The conditions prescribed in section 11e(b) of the Ordinance shall apply to the appointment and tenure of a director appointed by the Committee under the provisions of subsection (b).
Prohibition on controlling and holding means of control in a banking corporation that is a significant financial body§
35b.
(a)In this section –
"financial body" and "real corporation" – as defined in section 28 of the Law for the Promotion of Competition and Reduction of Concentration;
"significant financial body" – a financial body in which one of the following applies:
(1)it is listed in the list of significant financial bodies;
(2)what is stated in section 29(a)(1) of the Law for the Promotion of Competition and Reduction of Concentration applies to it, even if it is not listed in the list of significant financial bodies;
"list of significant financial bodies" – the list of significant financial bodies published pursuant to section 29 of the Law for the Promotion of Competition and Reduction of Concentration;
"list of significant real corporations" – the list of significant real corporations published pursuant to section 30 of the Law for the Promotion of Competition and Reduction of Concentration;
"controls", in a real corporation – including holding a controlling block as defined in the Companies Law, in a real corporation in which there is no other controlling shareholder;
"significant real corporation" – a real corporation in which one of the following applies:
(1)it is listed in the list of significant real corporations;
(2)what is stated in section 30(a)(1) of the Law for the Promotion of Competition and Reduction of Concentration applies to it, even if it is not listed in the list of significant real corporations; however, for this purpose, the authority vested in the Commissioner of Competition in the latter part of the definition of "determining sales turnover" in section 30(e) of that Law shall be vested in the Supervisor;
(3)what is stated in section 30(a)(2) of the Law for the Promotion of Competition and Reduction of Concentration applies to it, even if it is not listed in the list of significant real corporations; however, for this purpose, the authority vested in the Concentration Reduction Committee in the latter part of the definition of "determining credit" in section 30(e) of that Law shall be vested in the Supervisor.
(b)A significant real corporation or a person who controls it shall not control a banking corporation that is a significant financial body and shall not hold more than ten percent of a particular type of means of control in such a banking corporation or in the banking holding corporation that controls it, and if such banking corporation is a banking corporation without a controlling core – shall not hold more than five percent of a particular type of means of control in it; the Governor may determine, for the purposes of this subsection, a rate lower than ten percent, provided that it shall not be less than five percent; in determining such rate, the structure of the banking sector shall be taken into account, among other things.
(c)A person who holds more than five percent of a particular type of means of control in a significant real corporation (in this section – the holder) shall not control a banking corporation that is a significant financial body; for the purpose of calculating the rate of holding of such a holder, the holdings of the banking corporation, of financial bodies that control it or are controlled by it, or of other financial bodies under the control of the holder, shall not be counted; for the purpose of calculating the determining sales turnover and the determining credit of the real corporation pursuant to section 30 of the Law for the Promotion of Competition and Reduction of Concentration, a real corporation that is not the holder, or a corporation that is not a real corporation in which the holder holds more than five percent of the means of control, or a corporation that is not a corporation controlled by such a corporation, shall not be taken into account.
(d)A person who controls a banking corporation that is a significant financial body shall not control an insurer that is a significant financial body; for this purpose, the value of total assets of a significant financial body shall be calculated as the value of its total assets and those of financial bodies under its control.
(e)If a significant real corporation or a person who controls it controlled a banking corporation that is a significant financial body, or held means of control in such a banking corporation or in a banking holding corporation that controls it, or if a holder of means of control in a significant real corporation controlled a banking corporation that is a significant financial body, in contravention of the provisions of subsections (b) and (c), or if a person who controls a banking corporation that is a significant financial body controlled an insurer that is a significant financial body, in contravention of the provisions of subsection (d), that person shall sell the means of control held by him or her, so that he or she does not hold means of control of any type above the rate permitted for holding pursuant to this section, and the Governor, or the Supervisor if the Governor has authorised him or her to do so, may give instructions in this regard, including instructions as referred to in paragraphs (1) to (4) of section 35(a), with the necessary modifications; the provisions of section 35(d) and (e) shall apply for this purpose, with the necessary modifications; if the Governor or the Supervisor gives instructions pursuant to this subsection, notice thereof shall also be sent to the banking corporation.
(f)Without prejudice to the powers of the Governor and the Supervisor to require information pursuant to this Law, the Governor or the Supervisor may, for the purpose of implementing this section –
(1)require from a person who controls or holds means of control above the rates referred to in subsections (b) to (d) in a banking corporation, in a banking holding corporation that controls it, or in an insurer, or from a person who seeks to hold or control as aforesaid, information regarding the value of total assets of that person and of every person whose total asset value is taken into account for the purpose of determining a financial body as a significant financial body; for this purpose, "value of total assets" – as defined in section 29(d) of the Law for the Promotion of Competition and Reduction of Concentration;
(2)require from a person who controls or holds means of control above the rates referred to in subsections (b) or (c) in a banking corporation that is a significant financial body or in a banking holding corporation that controls it, or from a person who seeks to hold or control as aforesaid, information regarding sales and credit data of that person and of every person whose determining sales turnover or determining credit is taken into account for the purpose of determining a real corporation as a significant real corporation, provided that the Governor or the Supervisor shall not require information pursuant to this paragraph in respect of credit received by an individual unless the Governor or Supervisor has first required information regarding credit received by the relevant corporations and found that such information, together with other information in his or her possession, is insufficient for the purpose of implementing this section; for this purpose, "credit", "determining credit" and "determining sales turnover" – as defined in section 30(e) of the Law for the Promotion of Competition and Reduction of Concentration.
(g)The provisions of this section shall not apply to means of control in a foreign bank or in a banking holding corporation that controls a foreign bank and does not control another banking corporation, unless the holder is a resident of Israel.
Reporting on holding of means of control§
36.
(a)A person who holds more than five percent of a particular type of means of control in a banking corporation or in a banking holding corporation controlled by a person who has received a permit pursuant to section 34(b) shall submit to the banking corporation or to the banking holding corporation, as the case may be, on 1 April of each year and at such other times as the Supervisor shall determine, a report on the means of control held by that person and such other particulars as the Supervisor shall determine, including the following particulars:
(1)in respect of a holder that is a corporation – those who control it and also those who hold five percent or more of a particular type of means of control in it;
(2)on whose behalf the holder acts as agent or trustee.
(b)
(1)A person who holds more than one percent of a particular type of means of control in a banking corporation or in a banking holding corporation all of whose holders of means of control are not required to obtain a permit pursuant to the provisions of section 34(b), shall submit to the banking corporation or to the banking holding corporation, as the case may be, a report on the means of control held by that person and such other particulars as the Supervisor shall determine, including the following particulars:
(a)those who control it and, if there are no persons who control it – those who hold ten percent or more of a particular type of means of control in it, as well as the directors therein;
(b)on whose behalf the holder acts as agent or trustee;
(c)in respect of a holder of not more than two and a half percent of a particular type of means of control in the banking corporation – whether that person objects to the banking corporation disclosing particulars of its holding in its reports, as referred to in section 37 of the Securities Law; if no such notice has been given, that person shall be regarded as having consented to such disclosure, however that person may at any time thereafter give notice of his or her objection and it shall take effect at the end of three months from the date of the written notice to the banking corporation;
(2)(Repealed)
(3)The report pursuant to paragraph (1) shall be submitted on 1 April of each year and at such other times as the Supervisor shall determine, and also at any time at which the holding of a particular type of means of control has reached the rate requiring reporting pursuant to that paragraph and at any time at which the holding has fallen below that rate.
(b1)The Supervisor may instruct a particular corporation as referred to in subsection (b)(1) to publish such particulars as the Supervisor shall determine regarding holders of means of control in it above such rate as the Supervisor shall determine, provided that such rate shall not be less than one percent, even if those holders have objected to the disclosure of their holdings as referred to in paragraph (1)(c), stating reasons, provided that such instruction shall take effect at least six months from the date of the instruction to the particular banking corporation.
(c)The Supervisor may determine that a holder of means of control upon whom a duty of reporting under this section applies shall also submit the report directly to the Supervisor.
(c1)The Supervisor may transmit the report referred to in subsection (b) to the Committee for the Appointment of Directors appointed pursuant to section 36a.
(d)The provisions of this section shall also apply to a person who holds means of control in a banking corporation or in a banking holding corporation as security for an obligation, except for a holder that is a banking corporation.
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