Israeli Legislation.com
LawCorporate & Business

Financial Services Supervision Law (Provident Funds), 5765-2005

חוק הפיקוח על שירותים פיננסיים (קופות גמל), 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
Premium
Unofficial English translation — for reference only. It may contain errors or omissions and cannot be relied on as a legal text. Only the Hebrew text published in Reshumot is legally binding.More

This English text was translated from the official Hebrew using a range of translation tools, and it undergoes ongoing checks and updates. It is not a certified translation.

Despite these checks, it may contain errors, omissions, or imprecise renderings of legal terminology and cross-references, and it may not yet reflect the latest amendments. It cannot be relied upon as a legal text.

The Hebrew text as published in Reshumot (ספר החוקים) and on the Knesset website is the sole authoritative and legally binding version. In any discrepancy, the Hebrew text prevails.

This translation is provided for informational purposes only and does not constitute legal advice. For use in legal proceedings, request a certified Expert Legal Opinion.

Section F: Reporting to Members and Publication to the Public

Reporting to members§
35.

A managing company shall send to members in a provident fund under its management periodic reports and additional reports, which shall include the particulars directed by the Commissioner, in the manner, at the times and for the periods directed; the provisions of section 42 of the Financial Services Supervision Law (Insurance) shall apply to such reports, with the necessary modifications.

Publication and prohibition of misleading description§
36.
(a)The Commissioner may prescribe provisions regarding the publication of provident funds, including the publication of yield and management fee data and their comparison with other provident funds.
(b)A managing company or a person acting on its behalf, a person who controls a managing company or a corporation controlled by such a person, shall not make a misleading description in relation to a provident fund under the management of the managing company, and shall not publish or cause the publication of anything containing a misleading description as aforesaid, and the provisions of sections 55 and 56 of the Financial Services Supervision Law (Insurance) shall apply for this purpose, with the necessary modifications; for this purpose, the publication of a yield achieved by a provident fund shall also be deemed a publication containing a misleading description, unless the publication was made in accordance with the Commissioner's directions as referred to in subsection (a) and the yield was calculated in the manner prescribed in Regulations pursuant to section 34(a), and for a period prescribed by the Minister.
(c)Where the Commissioner is of the opinion that a publication in relation to a provident fund contained a misleading description, the Commissioner may, after affording the person who caused the publication an opportunity to state arguments in the manner directed, direct the publication of a correction, in the manner and form directed.
(d)In this section –

"to publish", "publication" – as defined in section 34x of the Penal Law, 5737-1977;

"misleading description" – as defined in section 55 of the Financial Services Supervision Law (Insurance), with the necessary modifications.

Need to cite this law in a foreign court?

Eli Shimony Israeli Attorneys-at-Law provides certified Expert Legal Opinions on Israeli law within 24–48 hours, accepted by courts worldwide.

Contact Us →

Section G: Merger and Split of a Provident Fund

Merger of Provident Funds§
37.
(a)A managing company may merge one provident fund under its management into another provident fund under its management or under the management of another managing company, provided that the merger plan has been approved in advance by the Commissioner and the company has given prior notice thereof to the members in the manner and at the time directed.
(b)In merging a provident fund into another provident fund, a managing company shall transfer all the assets of the merging fund and all the rights of the members of the merging fund to the other fund, in a manner that preserves the rights of both the existing and the transferred members, and in accordance with the merger plan approved by the Commissioner and the directions given in such approval; a merger as referred to in this section shall not bring about a merger of members' accounts in the provident funds.
(c)The Commissioner may prescribe a transitional period not exceeding one year for the adaptation of the activity of a provident fund after the execution of a merger to the provisions issued by the Commissioner under this Law.
Split of Provident Funds§
38.
(a)A managing company may split a provident fund under its management into two or more provident funds, in a manner whereby some of the members are transferred to a new provident fund or to an existing provident fund (in this section – the absorbing fund), provided that the split plan has been approved in advance by the Commissioner and the company has given prior notice thereof to the members in the manner and at the time directed.
(b)In splitting a provident fund, the managing company shall transfer to the absorbing fund the rights of members in the splitting fund, and assets in the splitting provident fund to the value of the rights of the transferred members, in a manner that preserves the rights of the members in both funds, and in accordance with the split plan approved by the Commissioner and the directions given in such approval; a split as referred to in this section shall not bring about a split of members' accounts in the provident fund.

Need to cite this law in a foreign court?

Eli Shimony Israeli Attorneys-at-Law provides certified Expert Legal Opinions on Israeli law within 24–48 hours, accepted by courts worldwide.

Contact Us →

Chapter IV: Supervision of the Management of a Provident Fund

Commissioner's Supervision§

39.
(a)In discharging its functions and duties under this Law, a managing company shall be subject to the supervision of the Commissioner.
(b)
(1)The Commissioner may, for the purpose of supervision as referred to in subsection (a) and after consultation with the Committee, issue directions concerning the methods of operation and management of managing companies, of office holders therein and of all persons employed by them, all in order to ensure the proper management of managing companies and of the provident funds under their management and the protection of the interests of their members, in order to prevent harm to the ability of managing companies to meet their obligations and in order to support the stability of the financial system and its orderly operation; directions as aforesaid may be issued to all managing companies or to managing companies that manage provident funds of a particular type or for a particular purpose;
(2)(Repealed)
(c)The provisions of Section B-1 in Chapter IV, sections 59b to 62, 63 and 64, Chapters VII and VIII and section 97 of the Financial Services Supervision Law (Insurance), and the provisions of section 102 of that Law in respect of a decision under section 62(a) of that Law, shall apply in respect of a managing company, with the necessary modifications and with the following modifications:
(1)in section 49d(a) of that Law, in the opening passage, instead of "excluding an infringement listed in items (1) and (3) to (8) of Part 1 of the Third Schedule" read "excluding an infringement listed in items (1) and (3) to (9) of Part 1 of the First Schedule of the Financial Services Supervision Law (Provident Funds)";
(2)in respect of section 68(a) of that Law, the Commissioner may also direct the transfer of the management of a provident fund to another managing company.

Reports, Notices and Information§

40.

The provisions of sections 42, 42a and 48a of the Financial Services Supervision Law (Insurance) shall apply in respect of a managing company, with regard to it and with regard to the provident funds under its management, with the necessary modifications; the Commissioner may direct that easements apply in respect of the application of the provisions of those sections to a managing company, by way of prescribing modifications and adjustments in the application of those provisions, in whole or in part, to such a company, or by prescribing that those provisions, in whole or in part, shall not apply to it.

Voluntary Transfer of Management§

41.

A managing company that seeks to cease managing a provident fund or that seeks to resolve upon its voluntary winding up may transfer the management of the provident fund or provident funds under its management, as the case may be, to another managing company, provided that the Commissioner has approved the transfer in advance and the company has given prior notice thereof to the members in the manner and at the time directed.

Transfer of Management by Reason of Receivership or Winding Up§

42.
(a)If a court order has been granted appointing a temporary receiver or temporary liquidator for a managing company, the managing company shall immediately notify the Commissioner thereof; if the order has not been set aside within 60 days, or within a longer period prescribed by the Commissioner for special reasons, the managing company shall transfer the management of the provident funds under its management to another managing company within a period to be directed by the Commissioner and in accordance with his directions.
(b)If the period for the transfer of management directed by the Commissioner as referred to in subsection (a) has elapsed and the managing company has not transferred the management of the provident funds to another managing company in accordance with his directions, the Commissioner may act in accordance with his powers as referred to in section 68 of the Financial Services Supervision Law (Insurance), as applied by section 39(c).

Need to cite this law in a foreign court?

Eli Shimony Israeli Attorneys-at-Law provides certified Expert Legal Opinions on Israeli law within 24–48 hours, accepted by courts worldwide.

Contact Us →

Chapter V: Financial Sanction

Financial Sanction§

43.
(a)Where a person has infringed a provision of the provisions under this Law applicable to him, as detailed in the First Schedule, the Commissioner may impose upon him a financial sanction pursuant to the provisions of this Chapter, in the amount detailed in respect thereof in the Second Schedule.
(b)Where a person has infringed a provision of the provisions under this Law applicable to him for which an offence under section 49 is prescribed, the Commissioner may impose upon him a financial sanction at the rate detailed below, as the case may be:
(1)in respect of an infringement of a provision for which an offence under section 49(a) is prescribed – 150 percent of the amount of the financial sanction that could have been imposed upon him under the Second Schedule had he infringed a provision listed in Part 3 of the First Schedule;
(2)in respect of an infringement of a provision for which an offence under section 49(b) is prescribed – 200 percent of the amount of the financial sanction that could have been imposed upon him under the Second Schedule had he infringed a provision listed in Part 3 of the First Schedule.
(c)Notwithstanding the provisions of subsections (a) and (b) –
(1)a financial sanction shall not be imposed upon a junior employee; in this subsection, "junior employee" means a salaried employee in a corporation who is not an office holder in the corporation and who has no employees subordinate to him;
(2)a financial sanction shall not be imposed upon a salaried employee in a corporation who is not an office holder in the corporation and who is not a junior employee therein, if in the act constituting the infringement he did not deviate from the practices of the corporation's managers or from a direction of his superior.

Updating of Financial Sanction§

44.
(a)The Commissioner may update the amount of the financial sanction on 1 January of each year, according to the rate of change in the index from the last index published before the date of change compared to the index for November 2005; the Commissioner may also round the amount of the financial sanction to the nearest amount that is a multiple of NIS 10.
(b)The Commissioner shall publish, by notice in Reshumot (Official Gazette), the updated amount of the financial sanction.
45.§

(Repealed — תשע״א־6)

46.§

(Repealed — תשע״א־6)

Application of Provisions of the Financial Services Supervision Law (Insurance)§

47.

The provisions of sections 92a1 to 92n and 92p to 92w of the Financial Services Supervision Law (Insurance) shall apply to a financial sanction under this Chapter, with the necessary modifications.

Amendment of the First Schedule and the Second Schedule§

47a.

The Minister of Finance may, by Order, with the consent of the Minister of Justice and with the approval of the Finance Committee, amend the First Schedule and the Second Schedule, provided that the amounts of the financial sanction under the Second Schedule shall not exceed the amounts detailed below, as the case may be:

(1)in respect of a managing company – NIS 2,000,000;
(2)in respect of a corporation that is not a managing company – NIS 1,500,000;
(3)in respect of an individual who is an office holder or who holds means of control in a managing company – NIS 150,000;
(4)in respect of an individual who is an employee of a corporation listed in paragraphs (1) or (2) and is not an office holder therein – NIS 18,000.

Need to cite this law in a foreign court?

Eli Shimony Israeli Attorneys-at-Law provides certified Expert Legal Opinions on Israeli law within 24–48 hours, accepted by courts worldwide.

Contact Us →

Chapter VI: Penalties

Rate of Basic Fine§

48.

In this Chapter, "the basic fine" means an amount detailed below, as the case may be:

(1)in respect of an individual who works in a corporation listed in paragraphs (2) or (3) and is not an office holder therein – the amount fixed in section 61(a)(4) of the Penal Law, 5737-1977, and in respect of any other individual – twice the amount fixed in section 61(a)(4) of the Penal Law, 5737-1977;
(2)in respect of a corporation that is not a managing company – eight times the amount fixed in section 61(a)(4) of the Penal Law, 5737-1977;
(3)in respect of a managing company – sixteen times the amount fixed in section 61(a)(4) of the Penal Law, 5737-1977.

Penalties§

49.
(a)A person who has done one of the following is liable to imprisonment for one year or the basic fine:
(1)(Repealed)
(2)(Repealed)
(3)(Repealed)
(4)(Repealed)
(5)(Repealed)
(6)(Repealed)
(7)made the payment of monies to a provident fund on behalf of an employee conditional, contrary to the provisions of section 20;
(8)(Repealed)
(9)(Repealed)
(10)(Repealed)
(11)(Repealed)
(12)held or managed provident fund assets otherwise than in accordance with the provisions of section 27(a);
(13)failed to maintain a separate system of accounts for each provident fund or failed to hold the assets of a provident fund separately from the assets of other provident funds, contrary to the provisions issued under section 27(b) to (d);
(13a)calculated the distribution commission in relation to the rate of management fees, contrary to the provisions of section 32(e)(3);
(14)(Repealed)
(15)(Repealed)
(16)(Repealed)
(17)(Repealed)
(18)(Repealed)
(19)(Repealed)
(20)(Repealed)
(21)acted in the winding up of the business of a managing company otherwise than in accordance with the directions given to him by the Commissioner under sections 63 and 64 of the Financial Services Supervision Law (Insurance) as applied by section 39(c);
(22)merged a provident fund into another provident fund without prior approval from the Commissioner or without giving prior notice thereof to the members, contrary to the provisions of section 37(a);
(23)transferred the assets of a merging provident fund or the rights of the members of a merging provident fund to another provident fund otherwise than in accordance with the merger plan approved by the Commissioner or his directions in such approval, or without the rights of the members being preserved, contrary to the provisions of section 37(b);
(24)split a provident fund without prior approval from the Commissioner or without giving prior notice thereof to the members, contrary to the provisions of section 38(a);
(25)transferred assets from a splitting provident fund or the rights of members of a splitting provident fund to an absorbing fund otherwise than in accordance with the split plan approved by the Commissioner or his directions in such approval, or without the rights of the members being preserved, contrary to the provisions of section 38(b);
(26)transferred a provident fund under his management to the management of another person without prior approval from the Commissioner or without giving prior notice thereof to the members, contrary to the provisions of section 41.
(b)A person who has done one of the following is liable to imprisonment for two years or a fine at the rate of one and a half times the basic fine:
(1)managed a provident fund without holding a managing company licence, contrary to the provisions of section 2;
(2)presented as a provident fund a fund or insurance plan that does not have a provident fund approval;
(3)acted contrary to a direction given to him by the Commissioner pursuant to the provisions of section 23(b) of the Financial Services Supervision Law (Insurance), as applied by section 8(b), concerning the management of his business after the revocation of a licence;
(4)held means of control in a managing company or controlled a managing company without holding a permit, contrary to the provisions of section 9;
(4a)agreed with another person concerning their voting for the appointment of a director in a managing company, including concerning their voting to terminate his tenure, without holding a permit to do so, contrary to the provisions of section 32a(1) of the Financial Services Supervision Law (Insurance), as applied by section 9(c);
(4b)controlled a managing company that is a significant financial body, or held means of control in such a company, contrary to the provisions of section 32a of the Financial Services Supervision Law (Insurance), as applied by section 9(c);
(5)transferred means of control in a managing company knowing that the transferee requires a permit and does not hold one, contrary to the provisions of section 33 of the Financial Services Supervision Law (Insurance), as applied by section 9(c);
(6)managed a provident fund otherwise than in accordance with the articles approved by the Commissioner or otherwise than in accordance with the provisions under this Law and the provisions of any other law to which the articles are subject, contrary to the provisions of section 16(a) and (b);
(7)granted members of a provident fund rights or imposed obligations upon them otherwise than in accordance with its articles, contrary to the provisions of section 16(c);
(8)(Repealed)
(9)received a benefit in connection with the management of a provident fund, contrary to the provisions of section 32(d);
(10)(Repealed)
(11)failed to return expenses, management fees, commission, consideration or any other benefit, in accordance with a direction of the Commissioner under section 32(f);
(12)(Repealed)
(13)failed to publish a correction to a publication that contains a misleading description in relation to a provident fund, in accordance with a direction of the Commissioner under section 36(c);
(14)failed to remedy a deficiency in accordance with a direction given by the Commissioner, as referred to in section 62(a) of the Financial Services Supervision Law (Insurance), as applied by section 39(c);
(15)failed to comply with a direction given by the Commissioner to remedy a defect or to prevent harm pursuant to the provisions of section 65 of the Financial Services Supervision Law (Insurance), as applied by section 39(c);
(16)infringed a direction to set aside amounts, given by the Commissioner pursuant to the provisions of section 66 of the Financial Services Supervision Law (Insurance), as applied by section 39(c);
(17)infringed a direction given by the Commissioner pursuant to the provisions of sections 67 or 68 of the Financial Services Supervision Law (Insurance), as applied by section 39(c);
(18)served as an office holder or as another employee in a managing company even though his authority was suspended or restricted pursuant to the provisions of section 68 of the Financial Services Supervision Law (Insurance), as applied by section 39(c), or served as an office holder in a managing company even though he was suspended or removed from his position pursuant to the provisions of that section;
(19)included a misleading detail in a report or notice, contrary to the provisions of section 42a of the Financial Services Supervision Law (Insurance), as applied by section 40, or gave his consent for a report or document that he prepared to be included in a report or notice as aforesaid, knowing that it contains a misleading detail;
(20)(Repealed)

Offence with Intent to Deceive or Defraud§

50.

A person who has committed one of the offences listed in section 49 with intent to defraud or mislead a member of a provident fund or a person considering joining a provident fund as a member is liable to imprisonment for five years or a fine at the rate of three times the fine prescribed for that offence.

Fine for a Continuing Offence§

51.

For a continuing offence the court may impose, for each day on which the offence continues, in addition to any other penalty, a fine at the rate of one fiftieth of the fine that it may impose for that offence.

Duty of Supervision§

52.
(a)An office holder in a corporation is obliged to supervise and to do everything possible to prevent the commission of an offence under section 49 by the corporation or by any of its employees; a person who infringes this provision is liable to the fine prescribed for that offence if imposed upon an individual.
(b)If an offence under section 49 has been committed by a corporation or by any of its employees, it shall be presumed that an office holder in the corporation has infringed his duty referred to in subsection (a), unless he proves that he did everything possible to prevent the commission of the offence.
(c)In this section, "office holder" means a director, an active manager in a corporation, a partner, excluding a limited partner, or any other function holder responsible on behalf of the corporation for the field in which the offence was committed.

Need to cite this law in a foreign court?

Eli Shimony Israeli Attorneys-at-Law provides certified Expert Legal Opinions on Israeli law within 24–48 hours, accepted by courts worldwide.

Contact Us →
← 1234567 →

Page 5 of 7

Read the entire law on one page — continuous text, no page breaks, plus PDF downloads.