Financial Services Supervision Law (Regulated Financial Services), 5776-2016
חוק הפיקוח על שירותים פיננסיים (שירותים פיננסיים מוסדרים), תשע"ו-2016
Published: 2016-08-01Consolidated Hebrew text as of 2026-07-26 · Last amended 2026-07-22✓ Amendment status checked against the Knesset legislation record on 2026-09-17
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Chapter VI: Restrictions on the Activities of Financial Service Providers
Section A: Restrictions on the Conduct of Business
Minimum Equity Capital§
37.
(a)A financial service provider shall maintain minimum equity capital in the amount set out in the First Schedule, as the case may be, free from any charge (security interest) or attachment.
(b)(Repealed)
Directives Concerning the Conduct of Business§
38.
The Supervisor, after consulting with the Committee, may issue directives to financial service providers, generally or to a particular class thereof, on the following matters:
(1)equity capital in addition to the capital required under section 37, required for the provision of a particular type of financial service or a particular type of activity;
(2)the obligation to maintain professional liability insurance;
(3)requirements in respect of the holding of assets, including requirements in respect of liquidity and in respect of the holding and management of funds in trust;
(4)requirements in respect of investments in assets, including the manner of investment, conditions for its execution and restrictions on investment;
(5)additional requirements in respect of the management of the business of financial service providers for the purpose of preventing risk to the financial system by reason of a particular type of activity or the volume of activity of a particular class of financial service providers.
(6)in respect of a holder of a licence for the provision of deposit and credit services –
(a)restrictions in respect of the volume of credit that the licence holder may extend to a customer and in respect of the amount of deposit that the licence holder may accept from a customer, and the Supervisor may also issue such directives in respect of all customers or a particular class thereof;
(b)administrative expenses and general expenses, including the remuneration of office holders and employees;
(c)the engagement of consultants and service providers.
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Contact Us →Section B: Special Restrictions on the Holder of a Licence for the Provision of Deposit and Credit Services
Fields of Activity of the Holder of a Licence for the Provision of Deposit and Credit Services§
38a.
(a)An association holding a licence for the provision of deposit and credit services (in this Section – a deposit and credit association) shall engage only in the following activities:
(1)the receipt of deposits from members of the association or their relatives in current accounts, in order to make payments therefrom on demand;
(2)the receipt of deposits other than as referred to in paragraph (1), from members of the association or their relatives, from banking corporations, from other deposit and credit associations or from the State;
(3)the receipt of deposits from persons who are not members of the association or their relatives and are not listed in paragraph (2), if a significant portion of the members of the association are low-income earners and in the Supervisor's opinion the receipt of deposits is necessary for the continuation of the association's activity; the Supervisor shall issue directives concerning the receipt of deposits under this paragraph, including in respect of the income level of the association's members and the number of members of the association with such income that justify the receipt of deposits under this paragraph;
(4)the extension of credit to members of the association, their relatives, banking corporations and other deposit and credit associations;
(5)the management of payments on behalf of members of the association and their relatives, including the collection, transfer and conversion of funds;
(6)the purchase and sale of foreign currency;
(7)investment in securities in accordance with the directives that the Supervisor shall issue in this regard;
(8)the safekeeping and management of negotiable instruments, securities, rights and other assets on behalf of members of the association and their relatives, as agent, bailee, broker or trustee, provided that the Supervisor's approval has been obtained for such activity and that a deposit and credit association shall not operate a business enterprise in the framework of such activity, all except for the following actions:
(a)the provision of an underwriting commitment as defined in the Securities Law;
(b)the management of a provident fund as defined in the Provident Funds Supervision Law;
(c)the management of a joint investment fund in trust as defined in the Joint Investments in Trust Law, 5754-1994;
(d)the management of investment portfolios as defined in the Regulation of Investment Advice, Investment Marketing and Investment Portfolio Management Law, 5755-1995 (in this Section – the Investment Advice Regulation Law);
(9)the purchase and sale of securities as dealer or agent of members of the association or their relatives, provided that the Supervisor's approval has been obtained for such activity;
(10)financial and economic advice to members of the association or their relatives in the field of the association's activities;
(11)pension counselling to members of the association and their relatives, as well as the execution of a transaction on behalf of a member of the association or a relative, as part of and in continuation of the pension counselling, all in accordance with the provisions of the Financial Services Supervision Law (Pension Counselling, Marketing and Clearing System), 5765-2005;
(12)investment advice to members of the association and their relatives, in accordance with the provisions of the Investment Advice Regulation Law;
(13)another activity expressly permitted to a bank under law, with the Supervisor's approval and with the consent of the Supervisor of Banks;
(14)another action ancillary to an activity permitted to a deposit and credit association, including the issuance of payment instruments, as defined in the Payment Services Law, 5779-2019;
(15)activity for the benefit of the community, provided that this does not constitute a commercial activity that is not permitted to a deposit and credit association under this Section.
(b)Notwithstanding the provisions of subsection (a), a member of an association within the meaning of section 6(5)(a)(3) of the Co-operative Societies Ordinance shall receive only the services listed in paragraphs (1), (2), (5) and (14) of subsection (a), provided that in respect of the services listed in paragraphs (1) and (2) thereof – the amounts of deposits to be received from such a member shall not exceed 2.5% of the association's equity capital.
(c)In this Section –
"credit" – as defined in the Banking Law (Licensing);
"deposit" – as defined in section 25a;
"relative" – any of the following:
(1)a spouse;
(2)a child who has not yet reached the age of 21;
(3)a child who has reached the age of 21, a brother, a sister or a parent, who are joint holders of an account of a member of the association maintained with the association.
Restriction on Control and Holding of Means of Control by the Holder of a Licence for the Provision of Deposit and Credit Services§
38b.
The holder of a licence for the provision of deposit and credit services shall not control a corporation and shall not be an interested party therein, except with the Supervisor's approval.
An Acquirer with a Broad Scope of Activity and an Issuer with a Broad Scope of Activity§
38b1.
(a)If the Minister considers that it is necessary in order to ensure competition in the field of the clearing of payment transactions or in order to ensure the benefit of payers or beneficiaries, the Minister may, in consultation with the Supervisor, the Securities Authority or the Governor, as the case may be, and also with the Commissioner of Competition, direct that the holder of a licence for the provision of deposit and credit services who is an acquirer with a broad scope of activity, clearing payment transactions whose payment instructions for execution were given by means of a particular type of payment instrument, shall enter into a contract with an issuer of that type of payment instrument for the purpose of clearing payment transactions as aforesaid, if the Minister has found that such an acquirer with a broad scope of activity has refused to contract with the issuer on unreasonable grounds; for this purpose –
(1)the imposition of unreasonable conditions by such an acquirer with a broad scope of activity on contracting with an issuer shall be deemed a refusal on unreasonable grounds;
(2)a refusal by such an acquirer with a broad scope of activity to contract with an issuer who is not subject, by law, to the supervision of the Supervisor, the Securities Authority or the Supervisor of Banks shall be deemed a refusal on reasonable grounds.
(b)
(1)The holder of a licence for the provision of deposit and credit services who is an issuer with a broad scope of activity, issuing a particular type of payment instrument, shall not refuse to contract with an acquirer who clears payment transactions whose payment instructions for execution were given by means of that type of payment instrument, for the purpose of performing the clearing of such payment transactions, on unreasonable grounds; for this purpose, the imposition of unreasonable conditions by an issuer with a broad scope of activity on contracting with an acquirer shall be deemed a refusal on unreasonable grounds;
(2)the Minister, on the proposal of the Supervisor or in consultation with the Supervisor, and in consultation with the Securities Authority and with the Commissioner of Competition, may exempt the holder of a licence for the provision of deposit and credit services who is an issuer with a broad scope of activity from the provisions of paragraph (1), including for a fixed period as the Minister shall determine, if the Minister considers that applying the provisions of that paragraph to that holder of a licence for the provision of deposit and credit services may harm competition in the field of the issuance of payment instruments such that the benefit of applying the provisions for the purpose of ensuring competition in the field of clearing payment transactions would be lower than such harm, and having regard to the benefit of payers or beneficiaries; if the Minister has decided to grant an exemption to the holder of a licence for the provision of deposit and credit services who is an issuer with a broad scope of activity as aforesaid, the Minister shall notify the Supervisor accordingly.
(c)In this Section –
"payment instrument", "payment instruction", "issuance" of a payment instrument, "beneficiary", "payer", "clearing" of a payment transaction and "payment transaction" – as defined in the Payment Services Law, 5779-2019;
"issuer" – as defined in section 30(b) of the Payment Services Regulation Law;
"issuer with a broad scope of activity" and "acquirer with a broad scope of activity" – as defined in the Payment Services Regulation Law;
"acquirer" – as defined in section 29(c) of the Payment Services Regulation Law.
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Contact Us →Section C: Special Restrictions on the Holder of an Issuance Licence
38c.§
(Repealed — תשפ״ג־2)
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Contact Us →Section D: Special Restrictions on the Holder of a Licence for the Operation of a Credit Intermediation System
Definitions – Section D of Chapter VI§
38d.
In this Section, "borrower", "customer", "lender", "social credit intermediation system", "credit intermediation system", "commission", "licence" and "licence for the operation of a credit intermediation system" – as defined in section 25q.
Management of Funds in a Trust Account§
38e.
(a)The holder of a licence for the operation of a credit intermediation system shall manage the funds of lenders transferred to that holder for the purpose of being extended as credit to borrowers, and the funds transferred to that holder as credit repayment by borrowers, in a separate trust account for the benefit of the lenders, with one of the bodies listed below (in this Section – the trust account):
(1)a banking corporation;
(2)the holder of a licence for the provision of deposit and credit services;
(3)the Company as defined in the Postal Law, 5746-1986, when providing the financial services as defined in that Law on behalf of the Subsidiary, within the meaning of section 88k of that Law, and from the Determining Date within the meaning of sections 56 and 57(c) of the Postal Law (Amendment No. 11), 5772-2012 – the Subsidiary as defined in the Postal Law;
(4)another body determined by the Minister of Finance, with the consent of the Minister of Justice and with the approval of the Finance Committee of the Knesset, provided that it is supervised by law, including under the Anti-Money Laundering Law.
(b)The holder of a licence for the operation of a credit intermediation system may collect the commissions for the service it provides from the funds managed in the trust account.
(c)The Supervisor may issue directives to the holder of a licence for the operation of a credit intermediation system in respect of the management of the trust account.
Restrictions in respect of Engagement in the Provision of Credit§
38f.
(a)The holder of a licence for the operation of a credit intermediation system shall not engage in the provision of credit as defined in section 11a, except with the approval of the Supervisor and in accordance with the conditions of the approval; nothing in the provisions of this subsection shall derogate from the licensing obligation under section 12.
(b)In an approval under subsection (a), the Supervisor shall prescribe conditions designed to ensure, inter alia, the absence of conflicts of interests as set out below:
(1)a conflict of interests between the provision of credit from the funds of the licence holder and the provision of credit from the funds of other lenders;
(2)a conflict of interests between the operation of credit transactions to which the licence holder is a party and the operation of other credit transactions;
(3)a conflict of interests between the collection of debts owed to the licence holder and the collection of debts owed to other lenders.
(c)The Supervisor may issue directives for the prevention of conflicts of interests as referred to in subsection (b), as well as directives for the prevention of a conflict of interests in circumstances where a related party to the licence holder is engaged in the provision of credit; for this purpose, "related party" – a person who controls the licence holder, a person who is controlled by the licence holder or by the person who controls it, as well as a person in respect of whom the Supervisor has so directed.
Non-Disclosure of Identifying Details of a Customer§
38g.
(a)The holder of a licence for the operation of a credit intermediation system shall not disclose identifying details of a customer to another customer except in accordance with directives issued by the Supervisor in this regard.
(b)Notwithstanding the provisions of subsection (a), where a borrower has failed to repay, on time, credit extended to the borrower by a lender through the credit intermediation system, and the licence holder has been unable to collect the debt in accordance with the provisions of section 50b(g), the licence holder may disclose to the lender, at the lender's request, identifying details of the borrower that are necessary for the purpose of taking proceedings under law for the collection of the debt, in accordance with directives issued by the Supervisor in this regard.
(c)Notwithstanding the provisions of subsections (a) and (b), the holder of a licence for the operation of a social credit intermediation system may publish on its website identifying details of the borrower and of the lender, provided that the borrower or the lender, as the case may be, has expressed prior written consent to the publication of the details as aforesaid; the Supervisor may issue directives concerning the publication of identifying details pursuant to this subsection.
(d)Nothing in the provisions of this section shall derogate from the provisions of any law concerning the maintenance of confidentiality and the protection of privacy.
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Contact Us →Chapter VII: Reporting Obligations
Reports and Notices§
39.
(a)A financial service provider shall submit to the Supervisor reports and notices as detailed below:
(1)financial reports as the Supervisor shall direct after consulting the Committee, at such times and for such periods as the Supervisor shall direct or upon the occurrence of an event as the Supervisor shall direct;
(2)immediate reports and notices as the Supervisor shall direct after consulting the Committee, upon the occurrence of an event as the Supervisor shall direct;
(3)additional reports and notices as directed by the Supervisor.
(b)The Supervisor shall issue directives concerning the manner of submission of a report or notice under this section, including their publication to the public, their format, content, level of detail and accounting rules for the preparation of a financial report, including the declarations and notes to be appended thereto; such directives shall be issued with regard to the need to preserve a trade secret or professional secret of the financial service provider.
(c)The Supervisor may, for reasons that shall be recorded, exempt a financial service provider from submitting a report or notice under this section or extend the time for their submission.
Information concerning Decisions at a General Meeting§
40.
(a)The minutes of the general meeting of a financial service provider that is a corporation holding an expanded licence, in respect of its decisions on the matters listed below, shall set out the names of those present at the meeting, the names of those who voted, the proportion of holdings in voting rights by virtue of which they voted and the manner of their vote, and if they are acting as an agent or trustee on behalf of another — details concerning the identity of the person on whose behalf they are acting as aforesaid, and if that person is a corporation — details concerning those who control it:
(1)amendment of the constitutional documents of the corporation;
(2)appointment or termination of office of a director;
(3)approval of actions or transactions requiring the approval of the general meeting under the provisions of sections 255 and 268 to 275 of the Companies Law, 5759-1999;
(4)additional categories of decisions directed by the Supervisor.
(b)The Supervisor may require any person who was present or who voted at a particular general meeting of a financial service provider that is a corporation, details concerning the identity of the person who was present or who voted as aforesaid, details concerning the identity of the person on whose behalf that person is acting as an agent or trustee, and if that person is a corporation — details concerning those who control it.
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