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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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
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Section B: Undertaking to Refrain from a Breach
Notice of the Possibility of Submitting an Undertaking and a Surety§
83.
Where the Supervisor has reasonable grounds to believe that a person has committed a breach of any of the provisions pursuant to this Chapter as referred to in section 72, and the circumstances prescribed by the Supervisor in procedures, with the approval of the Attorney General, have been met, the Supervisor may deliver to the violator, in lieu of a notice of intent to charge, a notice that the violator may submit to the Supervisor a letter of undertaking and a surety pursuant to the provisions of this Section, in lieu of having a financial penalty imposed on them pursuant to the provisions of Section A; in this section, "Attorney General" – including a Deputy Attorney General authorised by the Attorney General for this purpose.
Terms of the Undertaking and Amount of the Surety§
84.
(a)In the letter of undertaking, the violator shall undertake to cease the breach of the provision as referred to in section 83, and to refrain from an additional breach of the same provision, within a period to be determined by the Supervisor, commencing on the date of delivery of the letter of undertaking, provided that the said period shall not exceed two years (in this Chapter – the undertaking period).
(b)The Supervisor may prescribe in the letter of undertaking additional conditions that the violator must undertake and comply with during the undertaking period, for the purpose of reducing the harm caused by the breach or preventing its recurrence.
(c)In addition to the letter of undertaking, the violator shall deposit with the Supervisor a surety in the amount of the financial penalty that the Supervisor would have been entitled to impose on the violator in respect of that breach, having regard to the existence of cases, circumstances and considerations prescribed pursuant to section 78(b).
Consequences of Submitting or Failing to Submit a Letter of Undertaking and a Surety§
85.
Where the violator has submitted to the Supervisor a letter of undertaking and a surety pursuant to this Section within 30 days of the date of delivery of the notice as referred to in section 83, no financial penalty shall be imposed on the violator in respect of that breach; where the violator has not submitted to the Supervisor a letter of undertaking and a surety within the said period, the Supervisor shall deliver to the violator a notice of intent to charge in respect of that breach, pursuant to section 74.
Breach of the Undertaking§
86.
(a)Where the violator has submitted a letter of undertaking and a surety pursuant to this Section and has breached a condition of the undertaking, as set out in the following paragraphs, the provisions set out in those paragraphs shall apply, as the case may be:
(1)where the violator has continued, during the undertaking period, to breach the provision in respect of the breach of which the violator gave the letter of undertaking – the Supervisor shall forfeit the surety and shall deliver to the violator a demand for payment in respect of the continuing breach as referred to in section 77(a);
(2)where the violator has again breached, during the undertaking period, the provision in respect of the breach of which the violator gave the letter of undertaking – the additional breach as aforesaid shall be deemed a recurring breach for the purposes of section 77(b), and the following provisions shall apply:
(a)the Supervisor shall deliver to the violator a notice of intent to charge in respect of the recurring breach;
(b)where the Supervisor has sent a demand for payment in respect of the recurring breach pursuant to the provisions of section 76(b)(1), or where the violator has not submitted arguments before the Supervisor regarding that breach as referred to in section 76(d), the Supervisor shall forfeit the surety in addition to imposing the financial penalty in respect of the recurring breach;
(3)where the violator has breached one of the additional conditions prescribed in the letter of undertaking as referred to in section 84(b) – the Supervisor shall forfeit the surety, after having given the violator an opportunity to submit arguments, in writing, in this regard.
(b)For the purposes of this Chapter, the forfeiture of the surety pursuant to the provisions of this section shall be deemed to be the imposition of a financial penalty on the violator in respect of the breach in connection with which the surety was given.
(c)Where a condition of the undertaking has been breached as referred to in this section, and the violator has again breached the provisions in respect of the breach of which the violator gave the letter of undertaking, the Supervisor shall not permit the violator to submit a further letter of undertaking pursuant to the provisions of this Section in respect of that breach.
Return of Surety§
87.
Where the violator has complied with the conditions of the letter of undertaking submitted pursuant to this Section, the surety deposited by the violator shall be returned upon the expiry of the undertaking period; the surety, unless it was a bank guarantee, shall be returned together with shekel interest from the date of its deposit until the date of its return, and the provisions of the Interest and Linkage Adjudication Law shall apply in respect of such interest, with the necessary modifications.
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Contact Us →Section C: Miscellaneous Provisions
Financial Penalty for a Breach under This Law and under Another Law§
88.
For a single act that constitutes a breach of a provision of the provisions pursuant to this Law enumerated in section 72 and of a provision of the provisions pursuant to another law, no more than one financial penalty shall be imposed.
Appeal§
89.
(a)A final decision of the Supervisor pursuant to this Chapter may be appealed to the Magistrate's Court before which the President of the Magistrate's Court sits; such an appeal shall be filed within 30 days of the date on which notice of the decision was delivered to the violator.
(b)The filing of an appeal pursuant to subsection (a) shall not stay the payment of the financial penalty, unless the Supervisor has agreed thereto or the court has so ordered.
(c)Where the court has decided to allow an appeal filed pursuant to subsection (a), after the financial penalty has been paid or a surety has been deposited pursuant to the provisions of this Chapter, and has ordered the return of the amount of the financial penalty paid or the reduction of the financial penalty or the return of the surety, the amount paid, or any part thereof that has been reduced, or the surety, as the case may be, shall be returned, together with shekel interest from the date of its payment or deposit until the date of its return, and the provisions of the Interest and Linkage Adjudication Law shall apply in respect of such interest, with the necessary modifications.
Prohibition of Indemnification and Insurance§
90.
(a)Notwithstanding anything provided in any law and without derogating from the provisions of sections 262 to 264 of the Companies Law –
(1)a person may not be insured, directly or indirectly, against a financial penalty to be imposed on that person pursuant to this Chapter, and a contract for insurance as aforesaid is void;
(2)a financial service provider that is a corporation shall not indemnify or pay, directly or indirectly, a financial penalty imposed on another person pursuant to this Chapter, and a controlling shareholder in a corporation shall not indemnify or pay, directly or indirectly, a financial penalty imposed on the corporation, on an office holder in the corporation or on an employee of the corporation, and a provision or undertaking to pay or to indemnify as aforesaid is void.
(b)
(1)Notwithstanding the provisions of subsection (a), a person may be indemnified or insured in respect of expenses incurred in connection with the imposition of a financial penalty in that person's regard, including reasonable litigation expenses and including legal fees, and including by way of advance indemnification;
(2)an undertaking to indemnify or to insure pursuant to paragraph (1) in respect of an office holder in a corporation shall have no force unless a provision permitting it has been included in the articles of association of the corporation.
Breach of an Identical Provision against Several Customers§
91.
The Supervisor may determine that a person who has breached an identical provision against several customers shall be deemed to have committed a single breach, if the breach was committed within a short period of time, by a single act or omission or as a result of the same cause.
Publication§
92.
(a)Where the Supervisor has imposed a financial penalty pursuant to this Chapter, the Supervisor shall publish on the Supervisor's website the following particulars, in a manner that ensures transparency regarding the exercise of the Supervisor's discretion in making the decision to impose a financial penalty:
(1)the fact of the imposition of the financial penalty;
(2)the nature of the breach in respect of which the financial penalty was imposed and the circumstances of the breach;
(3)the amount of the financial penalty imposed;
(4)where the financial penalty has been reduced – the circumstances by reason of which the amount of the financial penalty was reduced and the rates of the reduction;
(5)relevant particulars concerning the violator;
(6)the name of the violator – where the violator is a financial service provider.
(b)Where an appeal has been filed pursuant to section 89, the Supervisor shall publish the fact of the filing of the appeal and its outcome.
(c)Notwithstanding the provisions of subsection (a)(6), the Supervisor may publish the name of a violator who is an individual and is not a financial service provider, if the Supervisor has considered it necessary for the purpose of warning the public.
(d)Notwithstanding the provisions of this section, the Supervisor shall not publish particulars that constitute information that a public authority is precluded from disclosing pursuant to section 9(a) of the Freedom of Information Law, 5758-1998, and may also refrain from publishing particulars pursuant to this section that constitute information that a public authority is not required to disclose pursuant to section 9(b) of that Law.
(e)Publication as referred to in subsection (a) in respect of a financial penalty imposed on a corporation shall be for a period of four years, and in respect of a financial penalty imposed on an individual – for a period of two years.
(f)The Minister may prescribe additional means of publishing the particulars referred to in this section.
Preservation of Criminal Liability§
93.
(a)Payment of a financial penalty or the giving of an undertaking and surety pursuant to this Chapter shall not derogate from the criminal liability of a person for a breach of a provision of the provisions under this Law that are listed in section 72, which constitutes an offence.
(b)Where the Supervisor has sent to a violator a notice of intention to impose liability or a notice of the possibility of submitting an undertaking and surety in respect of a breach that constitutes an offence as referred to in subsection (a), no indictment shall be filed against that person in respect of the same breach, unless new facts have come to light that justify doing so.
(c)Where an indictment has been filed against a person in respect of a breach that constitutes an offence as referred to in subsection (a), the Supervisor shall not take proceedings against that person under this Chapter in respect of the same breach; and if the indictment was filed in the circumstances referred to in subsection (b) after the violator has paid a financial penalty or deposited a surety, the amount paid or the surety deposited shall be returned to that person together with shekel interest, except where the surety was a bank guarantee, from the day of payment of the amount or the day of deposit of the surety until the day of its return, and the provisions of the Interest and Linkage Adjudication Law shall apply in respect of such interest, with the necessary modifications.
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Contact Us →Chapter XIII: Penalties
Penalties§
94.
(a)The following are liable to imprisonment for 18 months or a fine at three times the rate of the fine prescribed in section 61(a)(4) of the Penal Law, and if the offence was committed by a corporation – double the said fine:
(1)a person who engaged in providing a service in a financial asset or in providing credit without a licence to provide a service in a financial asset or a licence to provide credit, as the case may be, contrary to the provisions of section 12(a);
(1a)an association that is not a banking corporation that engaged in providing deposit and credit services, at a volume of activity lower than a banking volume of activity, without a licence to provide deposit and credit services, contrary to the provisions of section 25b(a);
(1b)(Repealed)
(1c)a person who engaged in operating a credit intermediation system without a licence to operate a credit intermediation system, contrary to the provisions of section 25r(a);
(2)a financial service provider that engaged in providing a financial service at an extensive scope of activity without an extended licence, contrary to the provisions of section 12(b) or (c), 25b(b) or (c) or 25r(b) or (c), as the case may be;
(3)a person who controlled a financial service provider that is a corporation, or a person who is an interested party in such a service provider, without a permit from the Supervisor, contrary to the provisions of section 26;
(4)a person who transferred means of control in a financial service provider to another knowing that the transferee requires a permit and does not hold one, contrary to the provisions of section 27.
(b)The following are liable to imprisonment for one year or a fine at twice the rate of the fine prescribed in section 61(a)(4) of the Penal Law, and if the offence was committed by a corporation – double the said fine:
(1)a financial service provider that did anything liable to mislead a customer in a material matter in a transaction, contrary to the provisions of section 41;
(2)a holder of a licence to provide credit who entered into a transaction with a minor or with a person who has reached 18 years of age but has not yet reached 21 years of age, contrary to the provisions of section 46(a), or a holder of a licence to provide deposit and credit services who entered into a transaction with a minor, contrary to the provisions of section 46(a1);
(3)a person who served as an office holder or as another employee in a financial service provider even though the authority of the office holder or employee had been suspended or restricted pursuant to the provisions of section 56, or who served as an office holder in a financial service provider even though that person had been suspended or removed from office pursuant to the provisions of that section.
(c)The following are liable to imprisonment for six months or the fine prescribed in section 61(a)(4) of the Penal Law, and if the offence was committed by a corporation – double the said fine:
(1)a financial service provider that did anything liable to harm a customer's ability to decide whether to enter into a transaction with that provider, in a manner that constitutes a denial of the customer's freedom to contract or a material infringement of that freedom, contrary to the provisions of section 43;
(2)a financial service provider that failed to disclose to a customer a material particular contrary to the provisions prescribed pursuant to section 47(a), or that breached a duty in respect of fair disclosure prescribed pursuant to the provisions of section 47(b).
Liability of an Office Holder in a Corporation§
95.
(a)An office holder in a financial service provider that is a corporation is obliged to supervise and to do everything possible to prevent an offence under section 94 being committed by the corporation or by any of its employees; a person who breaches this provision is liable to half the fine prescribed for an individual in respect of the same offence.
(b)Where an offence under section 94 has been committed by a corporation or by any of its employees, it shall be presumed that an office holder in the corporation has breached the duty referred to in subsection (a), unless that person proves that everything possible was done to prevent the offence.
(c)In this section, "office holder" – an active manager in a corporation, a partner excluding a limited partner, or another person holding a position on behalf of the corporation who is responsible for the area in which the offence was committed, and in respect of an offence under section 94(a)(1) to (3) – also a director.
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