Financial Information Service Law, 5782-2021
חוק שירות מידע פיננסי, תשפ"ב-2021
Published: 2021-11-18Consolidated Hebrew text as of 2026-07-27 · Last amended 2026-07-26✓ Amendment status checked against the Knesset legislation record on 2026-09-29
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Section D: Approval from a Regulator
Conditions for obtaining approval§
13.
(a)In this Section, "regulator" — a regulator as specified below, as the case may be:
(1)in respect of an information source referred to in paragraphs (1) to (7) of the definition of "information source" — the regulator of the information source;
(2)in respect of a credit bureau and a business information bureau — the Commissioner responsible for credit data sharing;
(3)in respect of another body prescribed pursuant to section 2(c) — the regulator of that body.
(b)A regulator may grant an approval for the provision of a financial information service to an information source referred to in paragraphs (1) to (7) of the definition of "information source", to a credit bureau, to a business information bureau or to another body prescribed pursuant to section 2(c), as the case may be, that has applied therefor, provided that the matter referred to in section 4(a)(3) is fulfilled in respect of them.
(c)If a regulator has found that an approval applicant is not fit to engage in the provision of a financial information service, on grounds of public interest, the regulator may, by a reasoned decision in writing, decline to grant an approval even if the condition referred to in subsection (b) is fulfilled in respect of the applicant, provided that the regulator has given the applicant an opportunity to present arguments before the regulator or before a person the regulator has authorised for that purpose from among the regulator's employees, in the manner directed.
Application for approval§
14.
(a)An application for approval shall be submitted to the regulator; in the application, the approval applicant shall specify the type of financial information service that the applicant wishes to provide.
(b)Documents attesting to the fulfilment of the conditions for obtaining approval shall be attached to the application for approval, including a business plan of the approval applicant; the regulator shall determine, by regulator's instructions, the particulars to be included in the business plan as aforesaid, and may also determine, by regulator's instructions, additional particulars, documents and reports to be included in or attached to the application.
(c)The regulator may require the approval applicant to provide additional particulars, documents or reports beyond those referred to in subsections (a) and (b), if it appears to the regulator that this is necessary for the purpose of reaching a decision on the application.
Particulars and conditions of the approval§
15.
The provisions of section 6 shall apply in respect of the particulars and conditions of the approval, with the necessary modifications and with the following modification: instead of "the Authority" there shall come "the regulator".
Cancellation or suspension of an approval§
16.
(a)A regulator may cancel an approval or suspend it, by a reasoned decision in writing, if the regulator has found that one of the following applies:
(1)the approval was granted on the basis of false or incorrect information;
(2)the condition for the grant of approval as referred to in section 13(b) has ceased to be fulfilled in respect of the approval holder, or the approval holder has breached a condition prescribed in the approval pursuant to section 15;
(3)the approval holder has breached a provision of this Law or of regulator's instructions;
(4)the regulator has suspended the licence granted to the approval holder pursuant to another law for the purpose of engaging in the financial field, and in respect of a body prescribed pursuant to section 2(c) that is not a licence holder as aforesaid — the regulator has restricted its financial activity pursuant to law;
(5)reasons of public interest justify the cancellation or suspension of the approval.
(b)A suspension pursuant to subsection (a) shall be for a period not exceeding one year, and for special reasons — for a period not exceeding five years; the provisions of this subsection shall not apply in respect of a suspension pursuant to subsection (a)(4).
(c)The provisions of section 7(d) shall apply in respect of the cancellation or suspension of an approval, with the necessary modifications and with the following modification: instead of "the Authority" and "the chairperson of the Authority" there shall come "the regulator".
Supervision of a person whose approval has been cancelled or suspended§
17.
The provisions of section 8 shall apply to a person whose approval has been cancelled or suspended, with the necessary modifications and with the following modifications: instead of "the chairperson of the Authority" there shall come "the regulator" and instead of "an employee of the Authority whom the chairperson has authorised for that purpose" there shall come "an employee of the regulator who has been authorised for that purpose".
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Contact Us →Section E: Miscellaneous Provisions
Foreign corporation§
18.
(a)In this section, "foreign corporation" — a corporation engaged in the provision of a financial information service outside Israel pursuant to foreign law regulating engagement in the provision of such a service.
(b)Notwithstanding the provisions of sections 4 and 9, the Authority may grant a licence to a foreign corporation even if the conditions listed in section 4(a)(1), (4), (5) or (7) are not fulfilled in respect of it, and may also exempt a controlling shareholder in such a corporation from the obligation to hold a control permit pursuant to section 9, if the Authority is satisfied that the foreign law regulating the foreign corporation's engagement in the provision of a financial information service and the supervision of such engagement provide an adequate response with respect to the matters regulated under those sections, all while safeguarding the interests of customers and after the Authority has considered reasons of public interest.
Register of service providers§
19.
(a)The Authority shall maintain a register of service providers (in this section — the register) and shall publish it on the Authority's website; the register shall include the following:
(1)a list of licence holders and their particulars;
(2)a list of approval holders and their particulars as transmitted to it by each of the regulators of the approval holders.
(b)The register shall include at least the following particulars:
(1)the particulars of the service provider, including contact details;
(2)the type of financial information service that the service provider is authorised to provide pursuant to the licence or approval;
(3)the identity of the service provider's regulator;
(4)notice of the cancellation or suspension of a licence or approval that has been granted; and in the case of such a suspension — the period of suspension.
Duty of notification to the Authority, to a licence holder and to a control permit holder§
20.
(a)A licence holder and a holder of a control permit therein shall notify the Authority, without delay —
(1)if a condition for the grant of the licence or the control permit, as the case may be, has ceased to be fulfilled;
(2)if a condition on account of which the Authority is authorised to cancel or suspend the licence or to cancel the control permit, as the case may be, has been fulfilled, and in respect of an examination of trustworthiness as referred to in sections 7(a)(4) or 11(a)(2), they shall notify the Authority of the occurrence of a circumstance listed in section 27(c)(1) to (6) of the Investment Advice Law in respect of themselves or in respect of a senior office holder therein, in Israel or abroad.
(b)A senior office holder in a licence holder or in a control permit holder shall notify the licence holder or the control permit holder, as the case may be, of the occurrence of a circumstance listed in section 27(c) of the Investment Advice Law in respect of that office holder, as referred to in subsection (a)(2), without delay; a notification pursuant to this subsection shall include the particulars required by the licence holder or the control permit holder, as the case may be, in order to fulfil its obligation pursuant to subsection (a).
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Contact Us →Chapter III: Financial Information Service Provider
Duty of loyalty§
21.
(a)A service provider shall act for the benefit of its customers faithfully and diligently, shall not prefer its own personal interests or the interests of another over the interests of its customers, and shall not prefer the interests of one customer over those of another customer.
(b)The provisions of subsection (a) shall not apply in respect of self-use of financial information by the service provider; for this purpose, "self-use", of financial information — any of the following:
(1)use of the information for the purpose of making an offer on behalf of the service provider to a customer, for the purpose of entering into an engagement with the customer for the supply of a financial product or the provision of a financial service as referred to in section 25(a)(6);
(2)use of the information for the purpose of securing the fulfilment of the conditions of a credit transaction with the customer;
(3)another use prescribed by the regulator of the service provider in regulator's instructions.
Duty of care§
22.
A service provider shall act with the care and level of skill that a reasonable service provider would exercise in similar circumstances, and shall take all reasonable measures to safeguard the interests of its customers.
Duty of confidentiality§
23.
A service provider shall keep confidential all information concerning the customer, including documents transferred to its possession and their contents, and every other detail relating to actions carried out in the framework of the provision of service to the customer; notwithstanding the foregoing, a service provider may disclose information concerning the customer as aforesaid pursuant to the provisions of this Law, pursuant to a court order, or pursuant to a demand received from a body authorised to do so pursuant to law.
Prohibition of receipt of benefits§
24.
A service provider shall not receive a benefit, directly or indirectly, in connection with the provision of a financial information service; the provisions of this section shall not apply —
(1)in respect of consideration and reimbursement of expenses paid directly by the customer;
(2)in respect of consideration received from another, in connection with the provision of the service to the customer, in accordance with provisions prescribed by the regulator of the service provider in regulator's instructions, in order to prevent a concern of conflict of interests.
Provision of a Financial Information Service to a Customer and Restrictions on the Provision of the Service§
25.
(a)A service provider shall collect financial information, receive financial information collected by another, and use information collected by it or by another only for the purpose of providing a service to a customer relating to that customer's financial conduct, on the basis of such information, including –
(1)aggregating financial information on behalf of the customer;
(2)aggregating financial information and transferring it to a body to which information may be transferred pursuant to section 29, for the purpose of the use of the information by that body, on behalf of the customer, for a purpose as referred to in that section;
(3)comparing costs;
(4)brokerage;
(5)advice regarding financial conduct;
(6)making an offer on behalf of the service provider to enter into an agreement with the customer with respect to a financial product or a financial service.
(b)A service provider shall not collect financial information, receive it from another, or use it as referred to in subsection (a), except for the purpose of providing a service to a customer as referred to in that subsection, and after the customer has given explicit consent thereto in an agreement with the service provider as referred to in section 26 and subject to the terms of the agreement.
(c)A service provider shall not collect financial information or receive it from another, unless such information is required for the purpose of providing the service to the customer as referred to in subsection (a).
(d)Notwithstanding subsection (a) –
(1)a service provider that is an information source shall not collect financial information, receive it from another, or use it as referred to in subsection (a), for the purpose of making an offer on its behalf to enter into an agreement with the customer, as referred to in paragraph (6) of that subsection, with respect to a financial product or a financial service (in this paragraph – the product or service), if both of the following conditions are met:
(a)the information regarding the product or service is not included in any of the information baskets applicable in relation to that information source;
(b)the product or service is similar to another product or service whose information is included in any of the information baskets applicable in relation to another information source; for this purpose, "similar product or service", to another product or service – a product or service of the same type as the other product or service, from among the types of products or services listed in the Fourth Schedule, intended for a purpose similar to that of the other product or service;
(2)a service provider may use financial information that it has collected or received from another, as referred to in subsection (a), also for statistical purposes related to the provision of financial information services to all of its customers, provided that the customer has given explicit written consent thereto and that the information to be presented to customers shall be aggregated statistical information that is non-identified information;
(3)the Minister, with the consent of the Minister of Justice, in consultation with the regulator of the service provider and with the approval of the Economics Committee, may prescribe uses that a service provider shall not be permitted to make of financial information and shall not be permitted to collect or receive information for the purpose of making such uses, even if they are intended for the purpose of providing a service to a customer relating to that customer's financial conduct pursuant to subsection (a), if the Minister has found that this is required in order to protect the interests of the customers of the service provider.
(e)The Minister may prescribe, on grounds relating to competition in the financial system, that the provisions of subsection (d)(1) shall not apply to a service provider that is an information source with a small scope of activity and in respect of which conditions that the Minister shall prescribe are met.
(f)Nothing in the provisions of this section shall derogate from the provisions of any other law, including a licensing obligation under another law, applicable with respect to the use of financial information as referred to in subsection (a).
Agreement for the Provision of a Financial Information Service§
26.
(a)A service provider shall enter into a written agreement with the customer for the provision of a financial information service (in this section – the agreement); prior to entering into the agreement, the service provider shall provide the customer, in plain and clear language and in a concise manner, with information regarding the nature of the service, including the retention of information pursuant to section 27(c); in the agreement, the service provider shall enable the customer –
(1)to choose the type of financial information service that the service provider will provide to the customer, including the uses to be made of the information as referred to in section 25;
(2)to choose the information sources, accounts and information baskets in respect of which the customer agrees to give the service provider access to financial information;
(3)to choose whether the service provider's access to financial information as referred to in paragraph (2) will be one-time access or continuous access for a fixed period, provided that such period shall not exceed three years or such other period as the Minister, with the consent of the Minister of Justice and in consultation with the regulator of the service provider, may prescribe.
(b)Where the customer has agreed to allow the service provider continuous access for a fixed period as referred to in subsection (a)(3), the service provider shall, once every six months during that period, take the steps necessary to verify that the customer is aware that the access option remains in effect in accordance with the customer's consent as aforesaid; if the service provider was unable to verify that the customer is aware of the access option as aforesaid, even after taking the necessary measures for that purpose, the customer shall be deemed to have cancelled the agreement pursuant to section 28; the regulator of the service provider shall prescribe, in regulator's instructions, provisions regarding the steps that the service provider must take in order to fulfil the obligation under this subsection.
(c)The Minister, with the consent of the Minister of Justice and in consultation with the regulator of the service provider, and in relation to a body supervised by the Bank of Israel – the Minister, with the consent of the Minister of Justice and the Governor, may prescribe provisions with respect to the agreement, including with respect to the manner in which the customer's choice as referred to in subsection (a) is to be made and with respect to additional particulars to be included in the agreement.
(d)The regulator of the service provider may prescribe, in regulator's instructions, provisions with respect to the drafting of the agreement by the service provider and its particulars, including with respect to the form of the agreement and the customer's ability to cancel or narrow the agreement as referred to in section 28, as well as provisions with respect to the service provider's obligation to provide the customer with information regarding the service and to enable the customer access to the agreement, all in accordance with Regulations enacted by the Minister pursuant to subsection (c), if such Regulations have been enacted.
Retention and Deletion of Financial Information§
27.
(a)
(1)A service provider shall retain financial information that it has collected or that was collected by another and transferred to it, for the shortest period required for the purpose of providing the financial information service to the customer and for no more than three years from the date on which the information came into its possession, unless the customer has agreed, expressly and in writing, towards the end of three years from the date of entering into the agreement pursuant to section 26, that the service provider shall retain such information for a longer period not exceeding seven years from the date on which the information came into its possession, provided that the information is required for the purpose of providing the financial information service to the customer;
(2)the Minister, in consultation with the regulator of the service provider, may shorten the periods referred to in this subsection, and in relation to a service provider that is a foreign corporation as defined in section 18(a), the Minister, with the consent of the Minister of Justice and in consultation with the Authority, may prescribe periods different from those referred to in this subsection that shall correspond to the maximum period during which the foreign corporation is permitted to retain the information under the foreign law applicable to it, if the Minister has found that the provisions of the foreign law and the supervision applicable to the business of the foreign corporation provide adequate protection to customers in this regard.
(b)The service provider shall delete the financial information regarding the customer upon expiry of the required period as referred to in subsection (a), and shall do so as soon as possible and no later than seven business days after the expiry of that period.
(c)The provisions of subsection (b) shall not apply with respect to financial information required by the service provider for the purpose of legal proceedings or for the purpose of an internal audit or supervisory proceeding pursuant to law, and the following provisions shall apply to it:
(1)the information shall be stored in a separate database from any other database; the regulator of the service provider shall prescribe, in regulator's instructions, provisions regarding the manner of storing the information as aforesaid;
(2)the information shall be used only for the purpose of proceedings as referred to in the opening paragraph, relating to the service provided by the service provider to its customers;
(3)the service provider shall ensure that no access to the information is permitted, unless a proceeding as referred to in the opening paragraph has been opened in relation to a specific customer and the information is required by the service provider for the purpose of conducting the proceeding;
(4)the service provider shall delete the information upon expiry of seven years from the date of completion of the provision of the service, except for information required for the purpose of conducting a proceeding that was opened as referred to in paragraph (3) before the expiry of that period.
(d)The provisions of this section shall not apply to aggregated statistical information that is non-identified information as referred to in section 25(d)(2).
Cancellation or Narrowing of an Agreement for the Provision of a Financial Information Service by the Customer§
28.
(a)A customer of a service provider may, at any time, cancel the agreement for the provision of a financial information service with the service provider that was entered into pursuant to section 26, narrow the scope of the service or the uses chosen as referred to in section 26(a)(1), and also narrow the information sources, accounts, information baskets or access period chosen as referred to in section 26(a)(2) and (3), provided that they remain sufficient to enable the service provider to provide the type of service and make the uses agreed upon; cancellation or narrowing of the agreement as aforesaid shall be effected by means of a notice delivered by the customer to the service provider.
(b)The service provider shall enable the customer to cancel or narrow the agreement with the service provider as referred to in subsection (a) in a simple and convenient manner, including by means of a notice delivered online.
(c)Where the customer has delivered to the service provider a notice of cancellation or narrowing of the agreement in accordance with the provisions of subsection (a), the following provisions shall apply:
(1)the service provider shall act in accordance with the customer's notice, and if it is a service provider providing services on the basis of financial information collected by another service provider and transferred to it pursuant to section 29(a)(3) – it shall notify the service provider that transferred the information to it thereof without delay, and that service provider shall act in accordance with the customer's notice;
(2)if the customer, within the framework of the notice as aforesaid, has cancelled consent to give the service provider access to all financial information concerning the customer held by a specific information source – the service provider shall notify the information source thereof as soon as possible and no later than within two days;
(3)the service provider shall delete the financial information that is no longer required, following the customer's notice, for the purpose of providing the service to the customer, in accordance with the provisions of section 27.
(d)
(1)Nothing in the provisions of this section shall derogate from the customer's ability to cancel consent to give the service provider access to all financial information concerning the customer held by an information source, by cancelling the access authorisation by notice to the information source, in accordance with the provisions of section 45; where the service provider has received notice from an information source of the cancellation of the access authorisation as aforesaid, in accordance with the provisions of section 45(c), the service provider shall be deemed to have received notice from the customer pursuant to this section of a narrowing of the agreement with the customer within the framework of which the customer cancelled consent to give the service provider access to all financial information concerning the customer held by the information source;
(2)in relation to a joint and several account – where a service provider has received notice from an information source of the cancellation of the access authorisation as referred to in paragraph (1) by an account holder who is not a customer of the service provider, shortly after the date of granting of the access authorisation to the information source, the service provider shall delete all the information it received from the information source concerning the account.
(e)Where a licence or approval has been revoked, all the customers of the licence holder or approval holder shall be deemed to have cancelled the agreement with the licence holder or approval holder pursuant to this section.
Transfer of Information to Another§
29.
(a)A service provider may transfer financial information that it has collected or that was collected by another service provider, to each of those listed below, and to them alone, for the purpose specified alongside them and in accordance with the provisions that the regulator of the service provider shall prescribe in this regard pursuant to subsection (g), provided that the customer has given explicit written consent thereto and that the information transferred is required for that purpose:
(1)to a financial body – for the purpose of making an offer on its behalf to enter into an agreement with that customer, whether the offer is made through the service provider within the framework of brokerage or whether it is made directly to the customer;
(2)to a representative – for the purpose of providing a service within the scope of the representative's occupation as a representative, to that customer, and after the representative has given the service provider an undertaking to comply with the provisions of this section applicable to it;
(3)to another service provider – for the purpose of providing a financial information service to that customer by the other service provider pursuant to this Law.
(b)A service provider shall not transfer financial information to a party listed in subsection (a) unless the service provider has notified that party, within the framework of the engagement with that party, that the information was received from the information source by means of the financial information interface system.
(c)A financial body that received information pursuant to subsection (a)(1) –
(1)shall not transfer it to another;
(2)shall not use it except for the purpose of making an offer on its behalf to enter into an agreement with the customer as referred to in subsection (a)(1) and for the purpose of entering into such agreement;
(3)shall store the information in a secure manner that prevents information leakage and unauthorised access thereto, pursuant to any law and in accordance with provisions in this regard to be prescribed by the regulator of the financial body, in regulator's instructions;
(4)shall delete the information upon completion of the use thereof as referred to in paragraph (2) and no later than 30 days after receiving the information as aforesaid, unless the financial body has entered into an agreement with the customer in respect of whom it made the offer to enter into an agreement; the Minister, with the consent of the Minister of Justice, may prescribe a different period for the deletion of the information.
(d)A representative that received information pursuant to subsection (a)(2) –
(1)shall not use it except for the purpose of providing a service to the customer within the scope of the representative's occupation as a representative, as referred to in subsection (a)(2), and shall not transfer the information to another except for the purpose of providing such service and after obtaining the customer's consent thereto;
(2)shall store the information in a secure manner that prevents information leakage and unauthorised access thereto and pursuant to any law;
(3)shall retain the information in accordance with the provisions of section 27 and shall delete it in accordance with the provisions of that section;
(4)shall notify the service provider if the representative ceases to provide a service to the customer as referred to in paragraph (1).
(e)A service provider shall not use information received pursuant to subsection (a)(3) except for the purpose of providing a financial information service in accordance with the provisions of this Law.
(f)Notwithstanding subsections (a)(1) and (2), (c) and (d) –
(1)the Minister, with the consent of the Minister of Justice, may prescribe, generally or in relation to a specific type of representative, types of uses that a representative shall not be permitted to make of financial information received pursuant to subsection (a) and for the purpose of which the service provider shall not be permitted to transfer financial information to a representative in accordance with the provisions of that subsection, if the Minister has found that this is required in order to protect the interests of the representative's customers;
(2)the Minister, with the consent of the Minister of Justice, in consultation with the regulator of the service provider and with the approval of the Economics Committee, may prescribe –
(a)additional types of uses that a financial body or a representative shall be permitted to make of information received pursuant to subsection (a) and for the purpose of which the service provider shall be permitted to transfer financial information to a financial body or a representative in accordance with the provisions of that subsection; Regulations pursuant to this sub-paragraph may be prescribed generally or in relation to a specific type of financial body or representative;
(b)additional bodies to which the service provider shall be permitted to transfer financial information pursuant to subsection (a), and conditions that shall apply to such bodies with respect to the use of the information transferred to them, provided that the Minister is satisfied as to the ability of such bodies to protect customer privacy, information security and cyber protection and that it is possible to carry out monitoring and enforcement in the said fields with respect to those bodies;
(c)conditions upon the fulfilment of which a service provider shall be permitted to give an individual engaged in the provision of financial advisory services to a limited number of customers, as the Minister shall prescribe, limited access to customer information on the systems of the service provider for the purpose of providing the financial advice as aforesaid; in such Regulations the Minister may prescribe conditions for the protection of the interests of customers; for this purpose, "financial advisory services" – including advisory services with respect to housing loans.
(g)The regulator of the service provider shall prescribe, in regulator's instructions, provisions with respect to the transfer of information to another pursuant to this section, including provisions with respect to the manner of carrying out the transfer.
Provision of Information to a Customer with respect to the Financial Information Aggregation Service§
30.
In providing a financial information aggregation service to a customer as referred to in section 25(a)(1), the service provider shall enable the customer to receive the information aggregated on the customer's behalf in a secure manner; the regulator of the service provider may prescribe, in regulator's instructions, provisions with respect to this matter.
Serious Security Incident§
31.
(a)If a serious security incident occurs within the meaning thereof in the provisions pursuant to section 36 of the Privacy Protection Law, the service provider shall notify the regulator of the service provider concerned thereof immediately, as well as the information source in respect of whose information the security incident occurred and the Head of the Privacy Protection Authority, and shall also report to the regulator of the service provider and to the Head of the Privacy Protection Authority on the steps taken following the incident; if the service provider received the information from another service provider that collected it, in accordance with the provisions of section 29(a)(3) – the service provider shall also notify the service provider from which it received the information thereof immediately; if the information source received a notice pursuant to this subsection, the information source shall report thereof without delay to the regulator of the information source; in this section, "Head of the Privacy Protection Authority" – the Head of the Authority as defined in the Privacy Protection Law.
(b)The Head of the Privacy Protection Authority, after consultation with the Head of the National Cyber Directorate and with the regulator of the service provider, shall instruct the service provider to notify of the security incident as referred to in subsection (a) also the customer in respect of whom there is a concern of actual harm to privacy as a result of the incident or additional information sources providing the service provider with access to financial information; however, the Head of the Privacy Protection Authority may refrain from instructing that a notice as aforesaid be given, or may instruct that it be given at such time as the Head of the Privacy Protection Authority shall direct, all due to circumstances relating to dealing with the security incident or on account of special considerations relating to actual harm to customers of the service provider; an information source that received a notice pursuant to this subsection shall report thereof to the regulator of the information source without delay; for this purpose, "National Cyber Directorate" – the National Cyber Directorate established pursuant to a Government decision and operating in accordance with its decisions.
Conflict of Interests§
32.
(a)If a service provider becomes aware of the existence of a conflict of interests between itself or a related party and the customer, it shall refrain from performing any act involving such a conflict of interests.
(b)Without derogating from the generality of subsection (a) –
(1)the Minister may prescribe a list of circumstances that shall be deemed to constitute a conflict of interests under subsection (a), and may, with the consent of the Minister of Justice, prescribe acts that involve a conflict of interests and in respect of which a monetary sanction may be imposed under this Law for their performance;
(2)a service provider shall not provide a cost-comparison or intermediation service –
(a)in relation to a financial product or financial service that it or a related party provides to its customers;
(b)in relation to a similar product or service as defined in section 25(d)(1)(b) in respect of a product or service referred to in sub-paragraph (a).
(c)Notwithstanding the provisions of subsections (a) and (b)(1), and without derogating from the provisions of subsection (b)(2) –
(1)the Minister may prescribe circumstances in which a service provider shall be permitted to perform an act even if it involves a conflict of interests as referred to in subsection (a), and may also prescribe conditions that shall apply to the performance of an act in such circumstances, with the aim of reducing the concern that the conflict of interests may influence the performance of that act;
(2)the regulator of the service provider may prescribe, in regulator's instructions, provisions on the matters referred to in paragraph (1), subject to Regulations made by the Minister pursuant to that paragraph, if such Regulations have been made.
(d)In this section, "related party", in relation to a service provider – any of the following:
(1)a person who holds 20% or more of a particular type of means of control in the service provider;
(2)a person in whom the service provider holds 20% or more of a particular type of means of control;
(3)a person in whom the controlling shareholder of the service provider holds 20% or more of a particular type of means of control;
(4)a person whom the regulator of the service provider has determined, in regulator's instructions, to be a related party to a service provider by reason of a business nexus.
Proper Disclosure§
33.
A service provider shall disclose to the customer, in writing, every material detail regarding the content, scope and conditions of the financial information service it offers or provides and the risks involved therein, including the following:
(1)the consideration that the customer is required to pay in connection with the service;
(2)the possibility of cancelling or limiting the engagement agreement as referred to in section 28, and the ways of doing so;
(3)the financial bodies with which it has entered into agreements for the purpose of providing an intermediation service;
(4)the identity of the regulator of the service provider, in respect of its activity as a service provider;
(5)the retention of information about the customer and the period for which the information will be retained, if the service provider retains information as referred to in section 27(c);
(6)an act performed by it in the framework of the service it provides to the customer that involves a conflict of interests as referred to in section 32(c);
(7)if the service provider is a foreign corporation for which a different period has been prescribed in respect of the retention of information as referred to in section 27(a)(2) – that period.
Prohibition of Misrepresentation§
34.
(a)A service provider shall not do anything that is likely to mislead a customer in any material matter in a transaction for the provision of financial information service, whether by act or omission, in writing or orally or in any other manner, including after the time of entering into the transaction; without derogating from the generality of the foregoing, the following matters shall be deemed material in a transaction:
(1)the identity of the service provider;
(2)the nature and quality of the financial information service;
(3)the period of engagement under the agreement for the provision of the financial information service, and the ways of renewing and cancelling it;
(4)any other matter listed in section 33.
(b)The provisions of subsection (a) shall apply also to publication and marketing on behalf of a service provider.
Mechanisms for Information Security, Risk Management and Cyber Protection§
35.
(a)Without derogating from the provisions of any law, the service provider shall ensure the existence of adequate and advanced mechanisms for information security, risk management and cyber protection, and shall, inter alia, receive, hold and transmit the financial information –
(1)in a manner that ensures protection against information leakage and unauthorised access thereto, as well as against unauthorised transfer, disclosure, deletion, use, alteration or copying;
(2)in a manner that prevents use of the information contrary to the provisions under this Law.
(b)The regulator of the service provider shall prescribe, in regulator's instructions, provisions on the matters referred to in subsection (a), including on the following matters:
(1)the obligation to appoint office holders at the service provider who shall be responsible for information security, risk management and cyber protection;
(2)the manner of identification of the customer before the service provider;
(3)the manner of holding the financial information by the service provider, including documentation obligations that shall apply to it.
Special Provisions Regarding a Service Provider that is a Licence Holder§
36.
(a)A licence holder shall meet the requirements regarding insurance, minimum equity capital or other security, as the Authority shall prescribe in regulator's instructions, and the Authority may prescribe different requirements according to the scope of the financial information service provided by the licence holder and the type of service it provides.
(b)A licence holder shall submit to the Authority reports and notices on its activity under this Law in accordance with the provisions that the Authority shall prescribe in regulator's instructions.
(c)A licence holder shall provide the Authority, in writing, upon its request or upon the request of an employee of the Authority who has been authorised for that purpose, within the period specified in the request, with explanations, particulars, information and documents in connection with the details contained in a report or notice submitted pursuant to subsection (b).
(d)A licence holder or a person who has submitted an application for a licence shall not include in an application, report or other information submitted to the Authority a misleading detail; for this purpose, "misleading detail" – includes anything that is likely to mislead the Authority and anything that is absent where such absence is likely to mislead it.
(e)A document that a licence holder or a person who has submitted an application for a licence is required to submit to the Authority shall be submitted in the manner prescribed under Chapter VII-A of the Securities Law.
Regulator's Instructions for the Service Provider§
37.
(a)The regulator of the service provider may prescribe, in regulator's instructions, provisions that shall apply to the service provider for the purpose of implementing its obligations under this Chapter, including on the following matters:
(1)the handling of customer complaints and its documentation;
(2)document retention;
(3)emergency preparedness and business continuity;
(4)reports that a service provider shall be required to provide to its customers;
(5)obligations that shall apply to the service provider with respect to the manner of its use of the financial information interface system.
(b)The Authority shall not prescribe or issue instructions under this Chapter regarding the use of financial information as referred to in section 25, if such use requires licensing under another law or requires registration pursuant to section 67(a)(4) of the Credit Data Law.
(c)Regulator's instructions of the service provider's regulator under this Chapter may be prescribed generally or according to the type or scope of the financial information service.
(d)Nothing in the provisions of subsection (a) shall derogate from the powers of the regulator of the service provider under this Law to prescribe additional provisions in regulator's instructions.
Limitation on the Application of the Provisions of Chapter III§
38.
(a)The provisions of this Chapter shall not apply to a portfolio manager, investment adviser, investment marketer, pension adviser, pension agent or insurance agent, in relation to the use of financial information that was collected by or collected by another person and transferred to them, if such use is regulated under the law by virtue of which the relevant entity was granted the licence for its occupation as aforesaid; however, the provisions of this Chapter shall apply to such an entity in relation to the collection and receipt of financial information from another for the purpose of such use.
(b)Notwithstanding the provisions of subsection (a), the provisions of sections 24 and 32 shall apply to a portfolio manager who has an affiliation as defined in section 1 of the Investment Advice Law, an investment marketer, a pension agent or an insurance agent, in relation to the use of financial information as referred to in that subsection; however, the regulator of the service provider for the purposes of those sections shall be, in relation to an investment marketer and such a portfolio manager – the Authority, and in relation to a pension agent and an insurance agent – the Commissioner of Capital Markets, Insurance and Savings; the provisions of this subsection are intended to be in addition to the obligations applicable to such a portfolio manager, investment marketer, pension agent and insurance agent under any law and not to derogate therefrom.
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