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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Section B: Special Provisions for the Protection of the Interests of Customers of the Holder of a Licence for the Operation of a Credit Intermediation System
Definitions – Section B of Chapter VIII§
50a.
In this Section —
"trust account" — within its meaning in section 38e;
"borrower", "customer", "lender", "social credit intermediation system", "credit intermediation system", "fee", "licence" and "licence for the operation of a credit intermediation system" — as defined in section 25q.
Protection of the Interests of Lenders§
50b.
(a)The holder of a licence for the operation of a credit intermediation system (in this Section – the licence holder) and any person engaged on its behalf in the management of lenders' funds shall act for the benefit of the lenders faithfully and diligently.
(b)The licence holder shall establish a comparative scale, or another model approved by the Supervisor, for assessing the likelihood that borrowers will meet the repayment of the credit they receive (in this Section – a repayment-likelihood assessment model).
(c)The licence holder shall provide the lender, before the allocation of the lender's funds to borrowers, with information on the following matters:
(1)the risks involved in extending credit in accordance with the repayment-likelihood assessment model it has established and in accordance with the level of credit diversification requested by the lender;
(2)the rate of return on extending credit; the Supervisor shall issue directives concerning the manner of calculating the rate of return for the purposes of this paragraph.
(d)In allocating lenders' funds to borrowers, the licence holder shall not prefer the interests of one lender over those of another lender in similar loans; for this purpose the Supervisor may prescribe, in directives it issues, circumstances in which the licence holder shall not be regarded as having allocated a lender's funds while preferring lenders; in this subsection, "similar loans" – loans that are similar to one another in characteristics of a type directed by the Supervisor, including the purpose of the loan and the likelihood of its repayment in accordance with the repayment-likelihood assessment model established by the licence holder.
(e)For as long as the licence holder has not allocated to borrowers all the funds transferred to it by the lender, the lender is entitled to demand that the licence holder return to the lender the funds not yet allocated; the Supervisor may issue directives concerning the return of funds as aforesaid.
(f)If the licence holder has not allocated to borrowers all the funds transferred to it by the lender within 15 days of the date on which they were transferred to it, it shall report this to the lender; the Supervisor may issue directives concerning reporting under this subsection.
(g)The holder of a licence for the operation of a credit intermediation system shall act to collect the repayment of the credit from the borrower at the time fixed for its repayment; if the credit has not been repaid at the due time, the licence holder shall take reasonable demand and collection measures, in accordance with law, for the purpose of collecting the debt from the borrower; the Supervisor may issue directives concerning the reasonable demand and collection measures that the licence holder is required to take under this subsection.
(h)The Supervisor may issue directives for the protection of the interests of lenders, including, inter alia, on the following matters:
(1)records to be maintained by the licence holder in connection with funds transferred to it by a lender for the purpose of being extended as credit to borrowers and funds transferred to it by borrowers as credit repayments to that lender;
(2)the manner in which the licence holder shall allocate lenders' funds to borrowers;
(3)the manner of transferring credit repayments received from borrowers to lenders;
(4)registration of charges (security interests) to secure the repayment of credit received by borrowers, in registers maintained in accordance with law;
(5)ensuring the continued ability to collect the debts of borrowers to lenders in circumstances in which the licence of the licence holder has been cancelled or suspended or the licence holder has become insolvent;
(6)a minimum level of diversification of credit extended by a particular lender among different borrowers;
(7)reporting obligations applicable to the licence holder vis-à-vis lenders;
(8)restriction of the ability of the licence holder to receive funds from lenders in circumstances in which there is a surplus in the supply of credit over demand for credit;
(9)restrictions concerning the volume of funds that a licence holder may receive from a lender that is a financial body, for the purpose of protecting the interests of lenders that are not such a body; for the purposes of this paragraph, "financial body" – any of the following:
(a)a banking corporation or an auxiliary corporation;
(b)an institutional body as defined in the Insurance Supervision Law.
Protection of the Interests of the Borrower§
50c.
(a)The licence holder shall provide the borrower, before the extension of credit, with information on the following matters:
(1)the total costs to be borne by the borrower in connection with receiving the credit, including the rates of interest and commissions that the borrower will be required to pay;
(2)the possibility of disclosing the identifying particulars of the borrower to the lender, in circumstances in which the borrower is not meeting the repayment of the credit, as set out in section 38g(b).
(b)The Supervisor may issue directives for the protection of the interests of borrowers, including, inter alia, to prescribe reporting obligations applicable to the licence holder in connection with credit repayments by borrowers.
Obligation of the Holder of a Licence for the Operation of a Credit Intermediation System concerning Publication on its Website§
50d.
The licence holder shall publish on its website, inter alia, details on the following matters:
(1)the methods of operation of the credit intermediation system; the Supervisor may issue directives concerning the details to be included in a publication under this paragraph;
(2)the commissions charged by the licence holder from borrowers and from lenders;
(3)the proportion of credit of all borrowers through the credit intermediation system that has not been repaid, as well as the proportion of credit that has not been repaid as aforesaid in relation to borrowers at each of the rating levels in the repayment-likelihood assessment model, to the extent that rating levels have been established;
(4)the rate of return on extending credit through the credit intermediation system; the Supervisor shall issue directives concerning the manner of calculating the rate of return under this paragraph.
Special Provisions concerning a Social Credit Intermediation System§
50e.
(a)Notwithstanding the provisions of section 50b(b), a licence holder operating a social credit intermediation system is not required to establish a repayment-likelihood assessment model as referred to in that section.
(b)Nothing in the provisions of this section shall exempt the licence holder referred to in subsection (a) from the obligation to provide the lender with information concerning the risks involved in extending credit under section 50b(c), or from the obligation to publish on its website the proportion of credit of all borrowers that has not been repaid, under section 50d(3).
Limitation on Obligations Applicable to a Lender in connection with the Extension of a Loan§
50f.
A borrower who has received a loan from a lender through a credit intermediation system shall not be regarded as a customer of that lender for the purposes of obligations applicable to the lender under any law in connection with the extension of a loan, for as long as the services provided to the borrower in connection with such obligations are provided through the system.
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Contact Us →Section C: Handling of Public Complaints
Handling of Public Complaints§
51.
(a)The Supervisor shall examine public complaints that it has found to have substance, concerning an act of a financial service provider.
(b)The Supervisor shall not examine a complaint in a matter in which proceedings before a court or arbitrator have commenced, or in which a court or arbitrator has adjudicated, except for special reasons that shall be recorded; however, the Supervisor may examine a complaint in a matter in which a claim has been filed before a court or arbitrator but the hearing has not yet commenced.
Methods of Examination§
52.
(a)The examination of a complaint shall be conducted in such manner as appears appropriate to the Supervisor, and the Supervisor shall not be bound by provisions of procedural law or the law of evidence; for the purpose of examining a complaint as aforesaid, the Supervisor may demand any information or document as referred to in section 67(a)(2).
(b)The Supervisor shall bring the complaint to the attention of the person against whom it is made and shall afford that person a reasonable opportunity to respond to it.
Outcomes of the Examination§
53.
(a)If the Supervisor finds that the complaint was justified, it shall notify the complainant and the person against whom the complaint is made accordingly; the Supervisor may set out in its response a summary of its findings, and may direct the person against whom the complaint is made to remedy a deficiency uncovered by the examination, whether in the particular case that was the subject of the complaint or generally, in the manner and within the time directed.
(b)If the Supervisor finds that the complaint is not justified, or that it does not warrant examination by the Supervisor, it shall notify the complainant and the person against whom the complaint is made accordingly, and may set out in its response a summary of its findings.
(c)If the examination gives rise to a suspicion that a criminal offence has been committed, the Supervisor shall bring the matter to the attention of the Attorney General.
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Contact Us →Chapter IX: Preservation of the Ability to Meet Obligations and of Proper Management
Notice of Defects§
54.
(a)If the Supervisor is of the opinion that a financial service provider has conducted its business in a manner that harms or is likely to harm its ability to meet its obligations or the proper management of its business, the Supervisor shall send the financial service provider a written notice detailing the defects, demanding their rectification or the prevention of their harmful effects within a period to be specified in the notice, and shall afford the provider an opportunity to submit, within that period or within a shorter period, as specified in the notice, its comments and objections regarding the defects or the demands for their rectification.
(b)If a financial service provider has submitted comments and objections as referred to in subsection (a), the Supervisor shall decide on them as soon as possible after receiving them and shall notify the financial service provider of its decision, and if it demanded the rectification of the defects or the prevention of their harmful effects – it shall specify in the decision the period within which the financial service provider is required to do so.
Measures to Prevent Harm§
55.
If, after the expiry of the period specified in its notice under section 54, the Supervisor is of the opinion that the financial service provider has not rectified the defects of which it was notified under that section or has not prevented their harmful effects, or if, after affording the financial service provider an opportunity to present or submit its comments and objections, the Supervisor is of the opinion that measures must be taken to prevent the financial service provider from failing to meet its obligations or from harming its customers or the holders of means of control in it, the Supervisor may, after consulting the Committee –
(1)direct the financial service provider to refrain from categories of actions specified in that direction;
(2)prohibit the distribution of dividends or profits or the granting of benefits to directors, office holders, or other employees of the financial service provider.
Powers for the Preservation of Proper Management§
56.
(a)If the Supervisor is of the opinion, after consulting the Committee, that a financial service provider or an office holder therein is conducting itself in a manner that significantly harms or is likely to significantly harm the proper management of its business, or is likely to harm its ability to meet its obligations or the proper management of its business, the Supervisor may, after affording the financial service provider a reasonable opportunity to present or submit its arguments before the Supervisor or before a person authorised by the Supervisor from among its employees, issue to the financial service provider any direction from among those set out in section 55, and the Supervisor may, with the approval of the Minister –
(1)suspend or restrict the authority of an office holder or other employee of the financial service provider;
(2)suspend an office holder in the financial service provider for a period it directs, or remove that person from office, after affording that person an opportunity to present their arguments before the Supervisor or a person authorised by the Supervisor from among its employees;
(3)appoint a special supervisor for the financial service provider who shall supervise its management as set out in section 58.
(4)in respect of the holder of a licence for the provision of deposit and credit services – appoint an authorised administrator to manage the business of the licence holder as set out in section 58a; such an appointment shall be made after consulting the Registrar.
(b)If the Supervisor is of the opinion that the public interest in the circumstances of the matter requires that an action under subsection (a) be taken without delay, the Supervisor may, with the approval of the Minister, act immediately, provided that the Supervisor brings the matter before the Committee as soon as possible after the action and affords the financial service provider a reasonable opportunity to present its arguments.
Preservation of the Validity of Acts§
57.
An act performed vis-à-vis another party in contravention of a direction issued under section 55 or 56, by a financial service provider, or by a person whose authority to perform the act has been suspended or restricted, or by a person who has been suspended or removed from office pursuant to such a direction, shall not be void on that ground alone.
Special Supervisor§
58.
(a)A special supervisor appointed under section 56 shall supervise the acts of the board of directors of the financial service provider and the management of its business in accordance with directions received from the Supervisor.
(b)The Supervisor may permit the special supervisor to engage other persons for the purpose of performing the special supervisor's functions.
(c)The provisions of section 345x3(a), (d), (e) and (g) of the Companies Law shall apply to the appointment of a special supervisor, with the necessary modifications.
(d)The Supervisor may direct the financial service provider to pay the special supervisor and the persons engaged by the special supervisor reasonable remuneration and expenses as directed by the Supervisor, and if the special supervisor or the persons engaged by the special supervisor are State employees, the Supervisor may direct that the remuneration be paid to the State Treasury.
Authorised Administrator§
58a.
(a)An authorised administrator appointed under section 56(a)(4) shall manage the business of the holder of the licence for the provision of deposit and credit services (in this section – the licence holder) in accordance with directions received from the Supervisor.
(b)Without prejudice to the provisions of subsection (a), the authorised administrator shall have all the powers and functions vested in an office holder of the licence holder, in its board of directors, in its board committees and in its directors, under the licence holder's incorporation documents and decisions lawfully adopted therein; for as long as an authorised administrator is performing the administrator's functions, the board of directors, its committees and its members shall not perform their functions or exercise their powers.
(c)The authorised administrator is empowered, with the approval of the Supervisor granted after consulting the Registrar, to transfer all or part of the assets and liabilities of the licence holder to another holder of a licence for the provision of deposit and credit services that has consented thereto.
(d)
(1)The authorised administrator may, with the approval of the Supervisor, direct that within a period not exceeding ten days from the date of the administrator's appointment under section 56(a)(4), the licence holder shall not fulfil obligations whose date of fulfilment falls within that period or prior thereto;
(2)The Supervisor may extend the period referred to in paragraph (1) by a further ten days if the Supervisor has given notice as referred to in subsection (e) of its intention to cancel the licence of the licence holder, and the period within which the board of directors is entitled to submit its arguments has not yet elapsed, or a court has not yet issued an order for the winding up of the licence holder or for the appointment of a receiver over its assets;
(3)The authorised administrator shall bring to public attention any direction issued under paragraphs (1) or (2) as soon as possible after it is given;
(4)The licence holder, the authorised administrator or the Supervisor shall not bear any liability by reason of the issuance of a direction under this subsection or by reason of non-fulfilment of an obligation pursuant thereto.
(e)If the Supervisor seeks to cancel the licence of a licence holder for whom an authorised administrator has been appointed, the Supervisor shall afford the board of directors of the licence holder a reasonable opportunity to submit or present its arguments before the Supervisor.
(f)The Supervisor may direct the licence holder to pay the authorised administrator remuneration and expenses as determined by the Supervisor, and if the authorised administrator is a State employee the Supervisor may direct that the remuneration be paid to the State Treasury.
Delivery of Documents and Information to the Special Supervisor and the Authorised Administrator§
59.
If a special supervisor or authorised administrator has been appointed under the provisions of section 56, every office holder of a financial service provider, whether or not a direction of suspension or restriction of authority or a direction of suspension or removal from office has been issued in respect of that office holder under that section, and also every other person employed by the financial service provider, shall be required, upon demand by the special supervisor or the authorised administrator, to deliver to the special supervisor or authorised administrator, or to their agents, such information, ledgers, documents or other records as the demanding party considers necessary to secure or facilitate the performance of the functions of the special supervisor or the authorised administrator.
Limitation on Assembly Decisions§
60.
A decision of a meeting of holders of means of control in the financial service provider that is inconsistent with the provisions of this Chapter or with an act performed or a direction issued pursuant thereto shall have no effect.
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