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 III: Licence for the Provision of a Service in a Financial Asset and Licence for the Provision of Credit
Definitions – Chapter III§
11a.
In this Chapter –
"extensive scope of activity" –
(1)in respect of engagement in the provision of a service in a financial asset – a business turnover exceeding NIS 30 million or a higher amount determined by the Minister with the approval of the Finance Committee of the Knesset;
(2)in respect of engagement in the provision of credit – a credit portfolio exceeding NIS 25 million or a higher amount determined by the Minister with the approval of the Finance Committee of the Knesset;
"provision of credit" – the provision of credit in the course of business, excluding additional operations determined by the Minister with the approval of the Finance Committee of the Knesset, and including the making available of a credit facility, inter alia in one of the following ways:
(1)discounting of cheques, promissory notes and bills of exchange within their meaning in the Bills of Exchange Ordinance;
(2)the provision of credit against the assignment of the credit recipient's right to receive financial assets from another, otherwise than as referred to in paragraph (1), including factoring services as defined in section 7a of the Banking Law (Customer Service), 5741-1981;
(3)the provision of credit in connection with the financing of the purchase or rental of an asset or service, excluding the provision of such credit by the seller of the asset or the service provider or the lessor in the course of business, being one of the following:
(a)the provision of credit to an individual customer in an amount less than NIS 30,000, or another amount determined by the Minister with the approval of the Finance Committee of the Knesset;
(b)the provision of credit by a person who sells an asset or provides a service in the course of business, including not for profit purposes, whose occupation is the sale of assets or the provision of services that are not financial services, to a person who is not a consumer as defined in the Consumer Protection Law, 5741-1981;
(c)the provision of credit in respect of which conditions determined by the Minister have been fulfilled, including in respect of the period of the credit or the rate of interest, with the approval of the Finance Committee of the Knesset;
(4)the giving of a guarantee for the obligation of another;
(5)the provision of credit against which an asset is pledged without recourse to the credit recipient for non-performance of the obligation;
"financial asset" – any of the following:
(1)cash;
(2)a cheque, promissory note or bill of exchange within their meaning in the Bills of Exchange Ordinance;
(3)a bank cheque or traveller's cheque;
(4)a monetary deposit;
(5)a bearer security within its meaning in the Companies Law, 5759-1999;
(6)a card or other object intended for the purchase of assets or services, in which monetary value above an amount determined by the Minister may be accumulated;
(7)a virtual currency;
(8)another financial asset determined by the Minister with the approval of the Finance Committee of the Knesset;
"credit portfolio" – the aggregate of all debts owed to the holder of a licence for the provision of credit, in respect of credit actually provided, plus 10% of the aggregate of credit facilities provided; for this purpose, "credit facility" – a commitment to make credit available in a certain amount, less the aggregate of credit actually provided out of that amount;
"licence" – a licence for the provision of a service in a financial asset or a licence for the provision of credit;
"basic licence" – a licence for the provision of a service in a financial asset or a licence for the provision of credit, for engagement in the provision of a service or credit, as the case may be, at a scope of activity that is not an extensive scope of activity;
"extended licence" – a licence for the provision of a service in a financial asset or a licence for the provision of credit, for engagement in the provision of a service or credit, as the case may be, at an extensive scope of activity;
"licence for the provision of credit" – a licence to engage in the provision of credit granted pursuant to this Chapter, whether a basic licence or an extended licence;
"licence for the provision of a service in a financial asset" – a licence to engage in the provision of a service in a financial asset, granted pursuant to this Chapter, whether a basic licence or an extended licence;
"service in a financial asset" – any of the operations listed below, which does not constitute the provision of credit and which does not constitute the provision of a payment service as defined in the Payment Services Regulation Law, carried out in the course of business:
(1)the exchange of a financial asset for another financial asset, including the redemption, breaking, conversion, sale or transfer of a financial asset;
(2)the management or safekeeping of a financial asset, including by means of a safe.
Licensing obligation§
12.
(a)No person shall engage in the provision of a service in a financial asset or in the provision of credit unless that person holds a licence for the provision of a service in a financial asset or a licence for the provision of credit, as the case may be, and in accordance with the conditions of the licence.
(b)A person who holds a licence as referred to in subsection (a) shall not engage in the provision of a service in a financial asset or in the provision of credit on an extensive scope of activity unless that person holds an extended licence.
(c)Notwithstanding the provisions of subsection (b), a person who holds a licence as referred to in subsection (a) may engage in the provision of a service in a financial asset or in the provision of credit on an extensive scope of activity, even if that person does not hold an extended licence, if that person submitted an application for an extended licence within 30 days of the date on which the scope of that person's activity became an extensive scope of activity, and for as long as both of the following conditions are met in respect of that person:
(1)no decision has yet been given on the application for an extended licence;
(2)the scope of that person's activity does not exceed twice the minimum extensive scope of activity required for the grant of an extended licence.
Exceptions to the licensing obligation§
13.
(a)The licensing obligation under section 12 shall not apply to the following:
(1)a stock exchange as defined in the Securities Law;
(2)the company as defined in the Postal Law, 5746-1986, when providing financial services as defined in that Law, on behalf of the subsidiary as defined in section 88k of that Law, and from the determining date within its meaning under sections 56 and 57(c) of the Postal Law (Amendment No. 11), 5772-2012 – the subsidiary as defined in the Postal Law;
(3)an insurer as defined in the Insurance Supervision Law, as well as a corporation controlled by that insurer or a corporation in which the insurer holds more than 20% of a particular class of means of control;
(4)a managing company as defined in the Provident Funds Supervision Law;
(5)a trading arena as defined in section 44l of the Securities Law;
(6)a stock exchange member;
(7)a portfolio manager as defined in the Investment Advice, Investment Marketing and Portfolio Management Regulation Law, 5755-1995;
(8)a clearing house and a clearing house member as defined in section 50a of the Securities Law;
(9)a supervised system, as defined in the Payment Systems Law, 5768-2008;
(10)the holder of a stability payment services licence as defined in section 36i of the Banking Law (Licensing) and a corporation controlled by such a licence holder; for this purpose, "control" – as defined in the Banking Law (Licensing), and every term in that definition shall be construed in accordance with that Law;
(11)a banking corporation and an auxiliary corporation;
(12)a corporation incorporated pursuant to law;
(13)a person whose business is the purchase of bonds offered to the public by way of a prospectus in accordance with the provisions of section 15 of the Securities Law – in respect of such business;
(14)a fund manager as defined in section 4 of the Joint Investments in Trust Law, 5754-1994;
(14a)the holder of a licence for the provision of deposit and credit services;
(15)a person whose business is the provision of credit that does not bear interest, to an individual, or to another person whose business is the provision of such credit – in respect of such business; for this purpose, "interest" – as defined in section 25a;
(16)an individual whose business is the provision of credit through a credit intermediation platform as defined in section 25q – in respect of such business, provided that the individual does not hold a licence to operate a credit intermediation platform;
(17)a settlement association, in respect of the provision of credit to its members or to corporations under its control, as well as a central association, in respect of the provision of credit to its members or to corporations under their control; for this purpose –
"settlement association" – a cooperative kibbutz, a renewed kibbutz or a cooperative moshav as defined in the Regulations under section 65 of the Co-operative Societies Ordinance;
"central association" – an association all of whose members are settlement associations or corporations under their full control.
(18)a payment company, in respect of the provision of ATM services, the provision of a service listed in Part 2 of the Seventh Schedule to the Payment Services Regulation Law, the conversion of funds incidental to a payment service, and also in respect of the provision of credit incidental to a payment transaction, provided that the payment company does not engage in the provision of credit other than the provision of credit incidental to a payment transaction; for this purpose –
"payment company", "funds", "provision of credit incidental to a payment transaction" and "payment service" – as defined in the Payment Services Regulation Law;
"ATM services" – as defined in the Payment Services Law, 5779-2019.
(b)The Minister may, by Regulations, with the approval of the Finance Committee of the Knesset, exempt additional categories of bodies from the licensing obligation under section 12, and may, in consultation with the Minister of Justice, grant an exemption from the licensing obligation to a particular body.
Types of licences§
14.
(a)The following are the types of licences under this Chapter:
(1)a licence for the provision of a service in a financial asset;
(2)a licence for the provision of credit.
(b)Each of the types of licences referred to in subsection (a) may be a basic licence or an extended licence.
Conditions for the grant of a basic licence§
15.
(a)The Supervisor may grant a basic licence to an applicant in respect of whom all of the following conditions are met:
(1)in respect of an applicant for a licence who is an individual – the applicant is an adult, an Israeli citizen or an Israeli resident, has not been declared legally incompetent and no receiving order has been made against the applicant in bankruptcy proceedings; and in respect of an applicant for a licence that is a corporation – it has been incorporated and registered in Israel, no court has appointed a receiver for it or ordered its winding up, and at least one of its office holders is an Israeli citizen or an Israeli resident;
(2)the licence applicant has the minimum equity capital required of a basic licence holder, in accordance with the provisions of section 37 and the First Schedule, all as the case may be;
(3)the licence applicant, and if the applicant is an individual – also a person of influence in the applicant, has not been convicted of an offence which, by reason of its nature, gravity or circumstances, renders the licence applicant unfit to engage in the provision of a service in a financial asset or in the provision of credit, as the case may be, and no indictment has been filed against the applicant for such an offence in respect of which a final judgment has not yet been given, and, in the opinion of the Supervisor, no other circumstances exist that cast doubt on the applicant's integrity and honesty in accordance with the criteria directed by the Supervisor under section 4(b); for this purpose and without derogating from the generality of the foregoing –
(a)each of the offences listed below shall be deemed an offence in respect of which the conditions of this paragraph are met, unless the Supervisor has found that special reasons exist relating to the circumstances of the commission of the offence and its degree of gravity, by reason of which there is no bar to engaging in the provision of a service in a financial asset or in the provision of credit, as the case may be:
(1)an offence under sections 3 or 4 of the Anti-Money Laundering Law;
(2)an offence under section 220 of the Income Tax Ordinance [New Version];
(3)an offence under section 117(b) or (b1) of the Value Added Tax Law, 5736-1975;
(4)an offence under section 98(c2) of the Real Estate Taxation Law (Appreciation and Acquisition), 5723-1963;
(5)an offence under section 211(a1) of the Customs Ordinance;
(6)an offence under sections 415, 418 to 420, 422, 423 and 425 to 428 of the Penal Law;
(b)"convicted of an offence" – including conviction of a similar offence in another country;
(4)the office holders of the licence applicant satisfy the conditions for the appointment and tenure of an office holder in a licence holder under Chapter V;
(5)in respect of an applicant for a licence that is a corporation – the controlling shareholder and the interested party in the applicant satisfy the conditions for obtaining a permit under Chapter IV.
(b)If the Supervisor has found that, by reason of considerations of public safety or security or other considerations of public interest, the licence applicant is unfit to engage in the provision of a service in a financial asset or in the provision of credit, as the case may be, the Supervisor may decline to grant a licence to the applicant, even if the conditions of subsection (a) are met in respect of the applicant, provided that the Supervisor has given the applicant an opportunity to state arguments before the Supervisor or before a person authorised by the Supervisor from among the Supervisor's employees, in the manner directed by the Supervisor.
Conditions and considerations for the grant of an extended licence§
16.
(a)The Supervisor may grant an extended licence to an applicant in respect of whom, in addition to the conditions referred to in section 15, all of the following conditions are met:
(1)the licence applicant has been incorporated and registered in Israel;
(2)the licence applicant has the minimum equity capital required of an extended licence holder, in accordance with the provisions of section 37 and the First Schedule, all as the case may be;
(3)the corporate structure of the applicant complies with the requirements under Chapter V.
(b)When deciding on an application for an extended licence, the Supervisor shall take into account, among other things, the following matters:
(1)the business plan of the licence applicant and the prospects of its implementation;
(2)the financial resources and sources of financing of the licence applicant;
(3)considerations of public interest.
Application for a licence§
17.
(a)An application for a licence shall be submitted on a form prescribed by the Supervisor and shall include, among other things, the following:
(1)the fields of activity within the financial service in which the licence applicant wishes to engage;
(2)the identification details of the licence applicant and of the office holders in the applicant;
(3)in respect of a licence applicant who is an individual – the identification details of the persons of influence in the applicant;
(4)in respect of a licence applicant that is a corporation – the identification details of the interested parties and the controlling shareholders in the applicant, and the rate of their holdings in the means of control in the applicant;
(5)the principal place of activity of the licence applicant, as well as the addresses of the branches that the applicant wishes to operate.
(b)Documents attesting to the fulfilment of the conditions for obtaining a licence, as referred to in sections 15 or 16, shall be attached to the application for a licence, as well as a declaration and documents as specified below, as the case may be, and the Supervisor may require the licence applicant to provide additional data and documents that the Supervisor deems necessary for the purpose of examining the application:
(1)a declaration regarding the financial resources and sources of financing of the licence applicant, to be given in the manner directed by the Supervisor;
(2)if the applicant is a corporation – the documents pursuant to which it was incorporated and the documents pursuant to which it operates.
(c)An applicant for an extended licence shall also attach to the application for a licence the business plan of the corporation.
Grant of a licence§
18.
The Supervisor shall give a decision on an application for a licence submitted under section 17 within 70 days of the date of submission of the application, and if the Supervisor has required additional data and documents under section 17(b) – within 70 days of the date on which the data and documents were furnished to the Supervisor.
Specification of fields of activity in the licence§
19.
The licence shall specify, among other things, the fields of activity within the financial service in which the licence holder is entitled to engage.
Period of the licence§
20.
A licence shall be granted for an unlimited period; however, the Supervisor may direct that a licence be granted for a fixed period as directed by the Supervisor, which shall not be less than one year; the Supervisor may so direct in respect of all licence holders or a particular category of them, and if the Supervisor has found that special reasons exist justifying it – also in respect of a particular licence holder.
Notice of the grant of the licence and its display to the public§
21.
(a)A notice of the grant of a licence and of the fields of activity in which a licence holder is authorised to engage shall be published on the Supervisor's website.
(b)A licence holder shall display a copy of the licence in each of the licence holder's branches, in a conspicuous place, and shall state the licence number on every sign or in every publication of the licence holder and also on every document issued by the licence holder.
Reporting to the Supervisor on changes§
22.
(a)If a change occurs in any of the particulars provided by a licence holder to the Supervisor in the course of the application for a licence or in the documents attached thereto, or if an indictment is filed against the licence holder for offences under section 15(a)(3), the licence holder shall report thereon to the Supervisor as soon as possible and no later than 10 days from the date on which the licence holder became aware of the change, and shall attach the documents relevant to the matter; the provisions of this section shall not apply to a change in the business plan, except for a change of the type in respect of which the Supervisor has directed, to the extent directed.
(a1)Notwithstanding the provisions of subsection (a), in respect of reporting on the filing of an indictment for offences under section 15(a)(3), the obligation to attach documents as referred to in subsection (a) shall not apply.
(b)If a change occurs in the credit portfolio of a licence holder for the provision of credit that is a corporation, in a manner that requires the licence holder to change the required equity capital in accordance with the provisions of sections 37 and 38 and the First Schedule, the licence holder shall report thereon to the Supervisor as soon as possible and no later than 10 days from the date on which the licence holder became aware of the change, and shall attach the documents relevant to the matter.
Revocation or suspension of a licence§
23.
(a)The Supervisor may revoke a licence or suspend it upon the occurrence of any one of the following:
(1)the licence was granted on the basis of false or incorrect information;
(2)a condition among the conditions for the grant of a licence enumerated in sections 15(a)(1) to (3) or 16(a), as the case may be, has ceased to be met;
(3)the licence holder has breached a provision among the provisions under this Law or the Supervisor's directives or a condition among the conditions of the licence;
(4)the licence holder has not commenced engaging in the provision of a service in a financial asset or in the provision of credit, as the case may be, within two years of the date of the grant of the licence, or has ceased to engage therein for such a period;
(5)if the licence holder is a corporation – it has resolved to wind itself up voluntarily, or a court has appointed a receiver for it or ordered its winding up;
(6)if the licence holder is an individual – a receiving order has been made against that individual in bankruptcy proceedings, or the individual has been declared legally incompetent, or has died;
(7)considerations of public safety or security or other considerations of public interest justify the revocation or suspension of the licence.
(b)If the Supervisor considers that the defect referred to in subsection (a) is capable of being remedied, the Supervisor may direct the licence holder to remedy it, and may direct the manner of remediation and the time for remediation; if the period directed by the Supervisor has elapsed and the defect has not been remedied to the Supervisor's satisfaction, the Supervisor may take measures as referred to in subsection (a).
(c)The Supervisor shall not revoke or suspend a licence as referred to in subsection (a) unless the Supervisor has given the licence holder an opportunity to state arguments before the Supervisor or before a person authorised by the Supervisor from among the Supervisor's employees, in the manner directed by the Supervisor; however, the Supervisor may suspend a licence immediately, if special reasons justifying it exist, provided that the Supervisor has given the licence holder an opportunity to state arguments as aforesaid, as soon as possible after the suspension of the licence.
(d)A notice of the revocation or suspension of a licence shall be published on the Supervisor's website.
Supervision of a person whose licence has been revoked§
24.
(a)A person whose licence has been revoked is obliged to comply with all the provisions applicable to a licence holder under this Law, for as long as obligations given to clients before the revocation of the licence remain outstanding.
(b)The Supervisor may give a person whose licence has been revoked directives regarding the management of that person's business to the extent that the Supervisor deems necessary in order to protect those of that person's clients who entered into a transaction with the licence holder before the revocation of the licence; nothing in such a directive shall exempt a person whose licence has been revoked from responsibility for fulfilling an obligation given before the revocation of the licence.
25.§
(Repealed — תשע״ז)
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