Financial Services Supervision Law (Pension Counselling, Marketing and Clearing System), 5765-2005
חוק הפיקוח על שירותים פיננסיים (ייעוץ, שיווק ומערכת סליקה פנסיוניים), תשס"ה-2005
Published: 2005-08-10Consolidated Hebrew text as of 2026-07-27 · Last amended 2026-07-22✓ Amendment status checked against the Knesset legislation record on 2026-09-29
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Chapter III: Duties, Prohibitions and Restrictions in respect of Engagement in Pension Counselling and Pension Marketing
Section A: Adaptation of the Service to the Client's Needs
Adaptation of the Service to the Client's Needs§
12.
(a)A licence holder shall adapt the pension counselling or pension marketing provided to a client to the needs of each client, and shall select the type of pension product, the pension product and the institutional body that are most suitable for the client, after having ascertained with the client the client's savings objectives by means of a pension product, the client's general financial situation, the client's existing savings by means of pension products and the other relevant circumstances, to the extent that the client has agreed to provide information in relation thereto; the selection of the type of pension product, the pension product and the institutional body most suitable for the client shall be made in accordance with the following:
(1)when selecting the type of pension product most suitable for the client, the licence holder shall examine all types of pension product;
(2)the selection of the pension product most suitable for the client or the institutional body most suitable for the client shall be –
(a)in respect of pension counselling – from among all pension products and institutional bodies;
(b)in respect of pension marketing –
(1)by an institutional body or by its employee who is a pension marketing agent – from among all pension products in respect of which it engages in pension marketing, provided that the pension product is of the type of pension product most suitable for the client;
(2)by a pension insurance agent who is not an employee of an institutional body – from among all pension products in respect of which the agent engages in pension marketing, and from among all institutional bodies in respect of whose pension products the agent engages in pension marketing, provided that the pension product is of the type of pension product most suitable for the client.
(b)Where a pension counselling agreement under section 27(b)(4) provides that the pension counselling is ongoing, the pension counsellor shall re-examine, in accordance with the provisions of subsection (a), the suitability of the savings by means of the pension product that is the subject of the pension counselling to the client's needs, throughout the entire period of the pension counselling.
Execution of a Transaction on Behalf of a Client as Part of Pension Counselling or Pension Marketing§
13.
(a)The execution of a transaction in respect of a pension product on behalf of a client shall be carried out only as part of pension counselling or pension marketing and as a continuation thereof; the execution of such a transaction that involves ongoing actions in savings by means of the pension product shall be carried out only within the framework of ongoing pension counselling and for the duration of the period of provision of pension counselling as determined in the agreement under section 27(b)(4), or within the framework of ongoing pension marketing and for the duration of the period of provision of pension marketing, as the case may be.
(b)Notwithstanding the provisions of subsection (a), pension counselling or pension marketing shall not be required in respect of the following actions:
(1)the execution of a transaction in respect of a pension product between a client and an institutional body, by the client, directly, following a proactive approach by the client to the institutional body, unless any of the following applies to the client:
(a)the client is an active insured member of a veteran fund, as defined in the Provident Funds Supervision Law;
(b)the client is an active insured member of an insurance provident fund;
(c)the execution of the transaction will include exclusions due to the client's poor state of health;
(d)additional conditions as determined by the Commissioner are fulfilled;
(2)the deposit of payments on behalf of an employee in a provident fund, by the employee's employer, after the employee has been given an opportunity to choose a different provident fund and for as long as the employee has not chosen such a fund, under the provisions of section 20(b) of the Provident Funds Supervision Law;
(3)the execution of actions in a pension product by an institutional body pursuant to a statutory obligation.
(c)The Commissioner shall prescribe provisions and conditions in respect of the opening clause of subsection (b)(1).
Written Reasons for a Licence Holder's Recommendations§
14.
A licence holder shall transmit to the client, at the time of making the recommendation, a document in writing that sets out the reasons for the licence holder's recommendation concerning the advisability of the client's or the client's relative's savings by means of a pension product.
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Contact Us →Section B: Duties of Loyalty and Care
Duty of Loyalty§
15.
(a)A licence holder shall act in the interests of clients faithfully and diligently, shall not prefer the licence holder's personal interests or the interests of another over the interests of clients, and shall not prefer the interests of one client over another client.
(b)A preference by a pension agent of a pension product to which the agent has a nexus, effected in accordance with the provisions of section 12(a)(2)(b), is a course of action consistent with the licence holder's duties under subsection (a).
Duty of Care§
16.
A licence holder shall conduct the licence holder's occupation with the care and level of skill that a reasonable licence holder would exercise in similar circumstances, and shall take all reasonable measures to safeguard the interests of clients.
Conflict of Interests§
17.
(a)Where a licence holder becomes aware of a conflict of interests between the licence holder or the corporation in which the licence holder is employed or is a partner, and a client, whether in respect of pension counselling or pension marketing to that client or in respect of the execution of a transaction on behalf of the client, the licence holder is obliged to notify the client, in writing, of the existence of the conflict of interests, and to refrain from carrying out any action in which there is a conflict of interests, unless the client has agreed thereto in advance and in writing, in relation to that pension counselling, that pension marketing or the execution of that transaction.
(b)A nexus of a pension agent to a pension product shall not be regarded as a conflict of interests between the agent and the client for the purposes of subsection (a).
(c)Without derogating from the generality of the provisions of subsections (a) and (b), the Commissioner may, after consultation with the Committee, direct, in respect of the said subsections, circumstances in which a conflict of interests between a licence holder and a client shall be deemed to exist, and circumstances in which a licence holder shall refrain from carrying out any action in which there is a conflict of interests as aforesaid, even if the client has agreed thereto in advance and in writing.
Restrictions in respect of the Execution of a Transaction between a Client and an Institutional Body§
17a.
(a)A pension counsellor or a pension insurance agent shall not execute a transaction with an institutional body on behalf of a client and shall not act as intermediary between a client and an institutional body, unless there exists between the pension counsellor or the pension insurance agent, as the case may be, and the institutional body, a written agreement whose conditions include an obligation of the pension counsellor or the pension insurance agent to comply with the conditions prescribed under section 30 of the Insurance Supervision Law, with the necessary modifications.
(b)The provisions under the Insurance Supervision Law and the provisions under the Insurance Contract Law, 5741-1981 (in this subsection – the Insurance Contract Law), that apply to an insurance agent and to the engagement in intermediation in respect of insurance, shall apply, with the necessary modifications, to the execution of a transaction and to intermediation as referred to in subsection (a); however, the following shall not apply in respect of a transaction or intermediation as aforesaid carried out by a pension counsellor –
(1)the provisions of section 33(a) of the Insurance Contract Law;
(2)provisions under the Insurance Supervision Law relating to the obligations of an insurer by reason of negotiations conducted by an insurance agent towards the conclusion of an insurance contract or relating to the conclusion of an insurance contract.
Prohibition against a Pension Counsellor Entering into an Exceptional Agreement§
18.
(a)A pension counsellor shall not enter into an agreement with an institutional body for the provision of services that is not in the ordinary course of the pension counsellor's business, is not on market terms, or is capable of materially affecting the pension counsellor's profitability, assets or liabilities (in this Law – an exceptional agreement), unless the pension counsellor has received prior written approval from the Commissioner, and if the pension counsellor is a banking corporation – also from the Supervisor of Banks.
(b)The receipt of consideration by a pension counsellor from an institutional body under an agreement for the provision of services that is not an exceptional agreement, or under an exceptional agreement that has been approved under the provisions of subsection (a), is a course of action consistent with the pension counsellor's duties under sections 15 and 17.
(c)In this section, "institutional body", "pension counsellor" – including a person who controls either of them or a person who is controlled by any of them.
Incentives and Commissions in Connection with Pension Counselling§
19.
(a)A pension counsellor or another person on the pension counsellor's behalf or for the pension counsellor's account shall not receive a benefit, directly or indirectly, in connection with pension counselling or in connection with the execution of a transaction on behalf of a client, other than the following:
(1)remuneration and reimbursement of expenses paid directly by the client, as determined in the agreement under section 27(b)(3), and subject to provisions under section 28;
(2)a distribution commission collected from an institutional body that has a nexus to a pension product in respect of which a transaction has been executed on behalf of the client, provided that the client on whose behalf the transaction was executed has agreed, in advance and in writing, to the receipt of the commission by the counsellor and to its rate, and subject to the provisions of section 28.
(b)For the purposes of subsection (a), a payment to a pension counsellor who was an insurance agent under the provisions of the Insurance Supervision Law, in respect of engagement in intermediation as defined in section 24 of that Law, that was carried out during the period in which the pension counsellor was an insurance agent, shall also be regarded as a benefit received by a pension counsellor in connection with pension counselling or in connection with the execution of a transaction.
(c)A pension counsellor shall not give a benefit to any of the pension counsellor's employees, branches or units, if the benefit is determined having regard to the type of pension product in respect of which the pension counselling was provided or having regard to the identity of the institutional body that has a nexus to the pension product in respect of which such counselling was provided.
(d)An institutional body shall not give a pension counsellor a benefit in connection with pension counselling or in connection with the execution of a transaction, other than the payment of a distribution commission under the provisions of subsection (a)(2).
(e)In this section –
"execution of a transaction" – including refraining from executing a transaction;
"pension counsellor" – including a person who controls the pension counsellor, a person who is controlled by any of them, an office holder in any of them and a person employed by any of them.
Incentives and Commissions in Connection with Pension Marketing§
19a.
(a)A pension insurance agent or another person on the pension insurance agent's behalf or for the pension insurance agent's account shall not receive a benefit, directly or indirectly, in connection with pension marketing or in connection with the execution of a transaction on behalf of a client, other than one of the following:
(1)remuneration and reimbursement of expenses paid directly by the client; the Commissioner may prescribe provisions in respect of remuneration and reimbursement of expenses under this paragraph;
(2)a distribution commission collected, under section 32(e)(1)(b) of the Provident Funds Supervision Law, from an institutional body that has a nexus to a pension product in respect of which a transaction has been executed on behalf of the client.
(b)Nothing in subsection (a) shall derogate from the possibility of an employer reimbursing an employee for payments made for pension marketing or pension counselling, in whole or in part, provided that the benefit is granted subject to the provisions of section 20(a2) of the Provident Funds Supervision Law.
(c)An institutional body shall not give a pension insurance agent a benefit in connection with pension marketing or in connection with the execution of a transaction, other than the payment of a distribution commission under the provisions of subsection (a)(2).
(d)In this section, "pension insurance agent" – including a person who controls the pension insurance agent, a person who is controlled by any of them, an office holder in any of them and a person employed by any of them.
Restrictions in respect of a Pension Counsellor's Engagement in Contracts§
20.
(a)A pension counsellor shall not enter into a contract with an employer or with an employers' organisation, whether expressly or by implication, in respect of the provision of pension counselling to an employee of that employer or to an employee of a person who is a member of, or is represented by, the employers' organisation, as the case may be, unless all of the following conditions are fulfilled:
(1)the pension counsellor is not a banking corporation;
(2)the pension counsellor has no business connection whatsoever with the employer or with the employers' organisation;
(3)the payment of remuneration and reimbursement of expenses to the pension counsellor in respect of the provision of pension counselling to the employee, paid by an employer or by an employers' organisation, shall be paid directly from the employer or the employers' organisation to the pension counsellor and shall not be paid out of amounts transferred to savings by means of the pension product or out of accumulated amounts in such savings;
(4)the employer or the employers' organisation is not entitled to a benefit from the pension counsellor in connection with the pension counselling and has not received such a benefit from the pension counsellor;
(5)the agreement between the pension counsellor and the employer includes a provision to the effect that the employer or the employers' organisation shall not interfere with the content of the pension counselling provided by the counsellor to employees and shall not compel employees to receive pension counselling through that pension counsellor;
for this purpose, "pension counsellor" and "employer" – including a person who controls either of them or a person who is controlled by any of them.
(b)A pension counsellor shall not be a party to an insurance effected for a group of persons who are not the counsellor's employees and shall not enter into a contract in respect of such insurance.
Fair Disclosure§
21.
(a)A licence holder shall disclose to the client, by way of fair disclosure, all matters that are material to the pension counselling or pension marketing provided by the licence holder, and in respect of a licence holder who is a pension agent, this includes –
(1)bringing to the knowledge of clients, at every place where the licence holder conducts business, by means of a prominent and clear sign or in another manner as directed by the Commissioner, the fact of the licence holder's being a pension agent and not a pension counsellor, as well as the institutional bodies that have a nexus to the pension products in respect of which the licence holder engages in pension marketing;
(2)disclosing to the client in language that is intelligible to the client, orally and in a written document to be delivered to the client before the commencement of pension marketing, and publishing on the licence holder's website, the matters referred to in paragraph (1), the nexus that the licence holder has to pension products in respect of which the licence holder engages in pension marketing and the nature thereof, and the fact of the licence holder's preference for those pension products; the Minister of Finance, with the approval of the Finance Committee of the Knesset, may prescribe rules in respect of the detail to be provided in the document and in the publication on the website under this paragraph, of a nexus that is a benefit as referred to in paragraph (3)(b) of the definition of "nexus", including the type of the benefit, its scope and the manner of its calculation.
(b)Without derogating from the generality of the provisions of subsection (a), the Commissioner may issue directions concerning matters that shall be regarded as material for the purposes of the said subsection, as well as concerning the manner of fair disclosure of material matters.
Duty of confidentiality§
22.
Subject to the provisions of any law or to an agreement in which the client has expressly waived the duty of confidentiality towards a person specified in that agreement, a licence holder shall keep confidential any information brought to its knowledge by the client, including documents transferred to its possession and their contents, and any other detail relating to transactions in respect of which it engaged in pension counselling or pension marketing.
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