Investment Advice, Investment Marketing and Investment Portfolio Management Law, 5755-1995
חוק הסדרת העיסוק בייעוץ השקעות, בשיווק השקעות ובניהול תיקי השקעות, תשנ"ה-1995
Published: 1995-08-10Consolidated Hebrew text as of 2026-07-19 · Last amended 2026-03-31✓ Amendment status checked against the Knesset legislation record on 2026-09-29
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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.
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Chapter I: Interpretation
Definitions§
1.
In this Law –
"deposit and credit society" – a cooperative society holding a licence to provide deposit and credit services, as defined in the Financial Services Supervision Law (Regulated Financial Services), 5776-2006;
"exchange outside Israel" – a company that has received approval to operate a system for trading in securities from a person authorised to grant such approval under the law of the state in which it operates;
"bank outside Israel" – a corporation incorporated in a foreign state in respect of which all of the following conditions are fulfilled:
(1)it engages in activities the engagement in which in Israel requires a bank licence under the Banking (Licensing) Law;
(2)it has received approval from a person authorised to grant it under the law of the foreign state to engage in the activities referred to in paragraph (1), and it is subject to supervision by a person competent in that regard in that state;
"licence holder" – the holder of an adviser's licence, a marketer's licence or a portfolio manager's licence granted to that person under this Law;
"institutional body" – a managing company, a fund manager and an insurer;
"immediate report" – (Repealed)
"offence" – an offence under one of the laws listed below, other than an offence the penalty for which is a fine only: this Law; the Provident Funds Supervision Law; the Pension Advice and Marketing Law; the Securities Law; the Joint Investments Law; the Companies Ordinance; the Banking (Licensing) Law; the Banking Ordinance, 1941; the Banking (Customer Service) Law, 5741-1981; the Insurance Business Supervision Law, 5741-1981; the Currency Control Law, 5738-1978; the Income Tax Ordinance [New Version]; the Value Added Tax Law, 5736-1975; the Customs Ordinance; the Trade Levies and Safeguard Measures Law, 5751-1991; the Prohibition of Money Laundering Law, 5760-2000; or any other offence which, by reason of its nature, gravity or circumstances, renders a person unfit to be a licence holder;
"the Authority" – the Securities Authority established under the Securities Law;
"underwriting commitment" – (Repealed)
"connection", of a person, to a financial asset – any of the following:
(1)the financial asset is managed by that person or was issued or released by that person;
(2)that person, or another on that person's behalf or for that person's benefit, is entitled, directly or indirectly, to a benefit other than the return of a commission or distribution commission as referred to in section 17(b)(3) to (5), not from the purchaser or holder of the financial asset, in connection with the execution of a transaction in the financial asset or in connection with the continued holding thereof; for the purposes of this definition, "person" – includes one who controls that person or one who is controlled by any of them, an office holder in any of them, one who is employed by any of them, or one who employs any of them;
"exchange member" – as defined in section 50a of the Securities Law;
"company" – as defined in the Companies Ordinance;
"Banking (Licensing) Law" – the Banking (Licensing) Law, 5741-1981;
"Companies Law" – the Companies Law, 5759-1999;
"Pension Advice and Marketing Law" – the Financial Services Supervision Law (Pension Advice, Marketing and Clearing System), 5765-2005;
"Joint Investments Law" – the Joint Investments in Trust Law, 5754-1994;
"Penal Law" – the Penal Law, 5737-1977;
"Securities Law" – the Securities Law, 5728-1968;
"Provident Funds Supervision Law" – the Financial Services Supervision Law (Provident Funds), 5765-2005;
"underwriter" – one who undertakes an underwriting commitment;
"investment adviser" or "adviser" – one who engages in investment advice;
"investment advice" – the giving of advice to others regarding the advisability of investing in, holding, purchasing or selling securities or financial assets; for this purpose, "advice" – whether directly or indirectly, including by means of publication, in circulars, in opinions, by post, facsimile or any other means, other than publication by the State or by a corporation performing a function under law in the course of that function;
"eligible client" – a client who, at the time of entering into a contract with that client for the provision of services, was listed in the First Schedule and fulfilled the conditions set out therein;
"insurer" and "insurance agent" – as defined in the Financial Services Supervision Law (Insurance), 5741-1981;
"structured product" – an investment, whether by way of deposit or otherwise, the yield on which or the risk involved in which is determined according to a formula based on changes in one or more of the following:
(1)an index or a number of indices;
(2)the price of a security or of a number of securities;
(3)the price of a commodity or of a number of commodities;
(4)the price of options or of futures contracts;
(5)interest or differentials between different interest rates;
(6)exchange rates or differentials between different exchange rates;
excluding an investment that guarantees, unconditionally, the repayment of the principal subject to the changes arising from paragraphs (1) or (2) below, if stipulated in the terms of the investment, and likewise, unconditionally, the payment referred to in paragraph (3) below, if such has been stipulated, provided that if a choice is given between two or more of those listed below, payment shall be guaranteed according to the higher of them:
(1)index differentials, not being a securities index;
(2)foreign currency exchange rate differentials;
(3)fixed or variable interest;
the Minister of Finance, after consulting the Authority and with the approval of the Finance Committee of the Knesset, may prescribe investments that notwithstanding the foregoing are included in this definition or are not included in it;
"index products" – exchange-traded notes, commodity certificates, short certificates or covered options, as those terms are defined in the exchange rules, as well as any other index product as defined in the exchange rules that the Minister of Finance has prescribed, after consulting the Authority and with the approval of the Finance Committee of the Knesset;
"fund manager" – as defined in section 4 of the Joint Investments Law;
"securities trading system" – as defined in section 44ae of the Securities Law;
"investment marketer" or "marketer" – one who engages in investment marketing;
"investment portfolio manager" or "portfolio manager" – one who engages in investment portfolio management;
"Registry of Foreign Practitioners" – as defined under Section C of Chapter II-A;
"blind trust" – the management of investment portfolios for a client who is not permitted to give instructions or directions regarding securities or financial assets to be purchased, held or sold on that client's behalf;
"office holder" – as defined in the Companies Law;
"investment portfolio management" – the execution of transactions, at discretion, for the accounts of others;
"securities" – as defined in section 1 of the Securities Law, other than securities not listed for trading on an exchange and index products, including securities issued by the Government and foreign securities, or as the Minister of Finance may prescribe, after consulting the Authority and with the approval of the Finance Committee of the Knesset;
"foreign securities" – securities listed for trading on an exchange outside Israel or on a regulated market outside Israel;
"financial assets" – units as defined in the Joint Investments Law, shares or units of a fund registered outside Israel, options, futures contracts, structured products, index products, and also continuing education funds, or as the Minister of Finance may prescribe, after consulting the Authority and with the approval of the Finance Committee of the Knesset;
"transaction" – a transaction in securities or in financial assets;
"Companies Ordinance" – the Companies Ordinance [New Version], 5743-1983;
"investment marketing" – the giving of advice to others regarding the advisability of investing in, holding, purchasing or selling securities or financial assets, where the person giving the advice has a connection to a financial asset; for this purpose, "advice" – as defined in the definition of investment advice;
"services" – investment advice, investment marketing or investment portfolio management, all or any of them;
"licensed corporation" – a corporation holding a licence under this Law;
"related corporation", in relation to another corporation – a corporation in respect of which one of the following applies:
(1)it controls the other corporation;
(2)it is controlled by the other corporation;
(3)another person has control of both it and the licensed corporation;
"savings scheme" – a savings scheme that has received the approval of the Minister of Finance and the Finance Committee of the Knesset under the Law for the Encouragement of Savings, Income Tax Concessions and Loan Guarantees, 5716-1956;
"exchange-traded notes" – (Repealed)
"exchange rules" – as defined in section 46 of the Securities Law;
"bank", "foreign bank" and "banking corporation" – as defined in the Banking (Licensing) Law;
"managing company" and "continuing education fund" – as defined in the Provident Funds Supervision Law;
"family member", "interested party", "equity capital", "underwriting commitment", "misleading detail", "control", "exchange", "holding" and "acquisition" – as defined in section 1 of the Securities Law;
"joint investment fund in trust", "open-ended fund" and "regulated market" – as defined in section 1 of the Joint Investments Law;
"option" and "futures contract" – as defined in section 64(b) of the Joint Investments Law;
"partnership" and "limited partner" – as defined in the Partnerships Ordinance [New Version], 5735-1975.
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Contact Us →Chapter II: Licensing Requirement
Licensing requirement§
2.
(a)No person shall engage in investment advice unless that person holds an adviser's licence; an individual holding an adviser's licence may engage in investment advice as an individual or as an employee of a company that holds an adviser's licence, or that holds a portfolio manager's licence and also engages in advice, as an employee or partner in a partnership that holds an adviser's licence, or as an employee of a deposit and credit society.
(b)No person shall engage in investment portfolio management unless that person holds a portfolio manager's licence, and if that person is an individual – that person holds a licence and is employed by a company that holds an investment portfolio manager's licence.
(b1)No person shall engage in investment marketing unless that person holds a marketer's licence; an individual holding a marketer's licence may engage in investment marketing as an individual or as an employee of a company that holds a marketer's licence, or that holds a portfolio manager's licence and also engages in marketing, or as an employee or partner in a partnership that holds a marketer's licence.
(b2)Notwithstanding the provisions of subsection (b1), an institutional body may engage in investment marketing with respect to financial assets managed by it or issued or released by it, and those only, even if it does not hold a marketer's licence; however, all those engaging in investment marketing on its behalf shall hold a marketer's licence, and if it is a fund manager – all of them shall hold a marketer's licence or a portfolio manager's licence, and for this purpose a foreign fund, as defined in section 113a of the Joint Investments Law, for which the fund manager serves as representative of that fund or of its fund manager, shall be treated as a fund under its management; the provisions of Chapters III and V to VIII applicable to the holder of a marketer's licence shall apply to an institutional body engaging in investment marketing under this subsection.
(c)Notwithstanding the provisions of subsections (a) and (b1), the holder of a portfolio manager's licence may also engage in investment advice or investment marketing, and in one of those only; however, if that person is a related corporation to an institutional body or to the holder of a marketer's licence, that person shall not engage in investment advice; in engaging in investment advice otherwise than in the framework of portfolio management, the provisions of this Law applicable to the holder of an adviser's licence shall apply to the holder of a portfolio manager's licence, and in engaging in investment marketing, the provisions of this Law applicable to the holder of a marketer's licence shall apply.
(d)Nothing in the provisions of subsections (a) to (b1) shall prevent –
(1)a person undergoing a period of internship in preparation for receiving a licence under this Law from working under the supervision of a licence holder in the manner and under the conditions to be prescribed by Regulations, provided that such a person shall not give investment advice or investment marketing and shall not manage investment portfolios;
(2)a person who does not hold a licence from working for a licence holder, provided that such a person shall not give investment advice or investment marketing and shall not manage investment portfolios.
(3)a person who holds a licence as defined in the Pension Advice and Marketing Law from engaging in pension advice or pension marketing, as the case may be, as defined in that Law, with respect to a pension product as defined in that Law, which is also a financial asset.
Activities not requiring a licence and reliefs for activities§
3.
(a)The following activities do not require a licence under this Law:
(1)(Repealed)
(2)(Repealed)
(3)investment advice or investment portfolio management for clients whose number does not exceed five in the course of a calendar year, by an individual who does not engage in investment advice or investment portfolio management within a licensed corporation or within a banking corporation;
(4)investment advice in the media;
(5)investment advice or investment marketing given by a person by virtue of membership on an investment committee or on the board of directors of a corporation, solely to that corporation in the course of performing the person's function as a member of the committee or as a member of the board of directors, as the case may be;
(6)management of the investment portfolio of a corporation by one who does so in the course of performing that person's function in that corporation or in a corporation related to that corporation;
(7)investment advice or investment portfolio management for a family member;
(8)investment advice by a corporation whose principal activity is the valuation of corporations, provided it does not engage in other investment advice or in portfolio management;
(9)investment advice or investment portfolio management by an auditor, an advocate or a tax consultant, which is ancillary to the provision of a service to a client in that person's professional field;
(10)investment portfolio management by one who has been appointed by an Order of a competent court or tribunal to act in another's assets, in the course of performing that function.
(11)investment advice, investment marketing or investment portfolio management, for an eligible client.
(12)investment advice or investment marketing with respect to a financial asset or categories of financial assets as the Minister of Finance has prescribed, after consulting the Authority and with the approval of the Finance Committee of the Knesset.
(13)rating as defined in the Law for the Regulation of the Activity of Credit Rating Companies, 5774-2014.
(14)investment advice or investment marketing with respect to a money market fund, by any of the following, provided that, before commencing activity, that person has given the Authority notice of the intention to engage in advice or marketing in accordance with rules that the Authority shall prescribe for this purpose:
(a)a fund manager;
(b)a person holding a licence to provide financial information services as defined in the Financial Information Service Law, 5782-2021;
(c)a basic initiator and a payment company as defined in the Regulation of Engagement in Payment Services and Payment Initiation Law, 5783-2023;
(d)an exchange member;
(e)a banking corporation and an auxiliary corporation as defined in the Banking (Licensing) Law, other than a joint services company as defined in that Law;
(f)another body operating in the financial sector whose activity in that sector is supervised under law, as prescribed by the Minister of Finance;
(g)a person employed by a body engaging in investment advice or investment marketing with respect to a money market fund, without a licence, in accordance with the provisions of this paragraph, or by a licence holder whose licence has been restricted to engaging in advice or marketing as aforesaid;
for the purposes of this section, "money market fund" – as defined in the Joint Investments Law, other than a fixed-date fund as defined in section 47 of that Law where the period between consecutive fixed dates in respect thereof as referred to in section 47(a)(3) exceeds 12 months.
(a1)Notwithstanding the provisions of paragraph (3) of subsection (a), a person engaging in investment advice or investment portfolio management as referred to in that paragraph, without holding a licence under this Law –
(1)the provisions of Chapter III or Chapter IV, as the case may be, shall apply to that person as if that person were a licence holder;
(2)shall notify the client to whom investment advice is given or for whom an investment portfolio is managed, prior to entering into a contract with that client, that the person does not hold a licence, and if that person was previously a licence holder – shall also state the circumstances by reason of which that person ceased to be a licence holder, and shall further state in the notice whether that person is insured as required of a licence holder under the provisions of this Law.
(a2)Notwithstanding the provisions of paragraph (11) of subsection (a), a person engaging in investment advice, investment marketing or investment portfolio management as referred to in that paragraph, without holding a licence under this Law –
(1)the provisions of Chapter III, other than sections 12, 13, 14, 16 and 18, shall apply to that person as if that person were a licence holder, and in respect of one engaging in investment portfolio management – also the provisions of Chapter IV, other than section 24; the Minister of Finance, after consulting the Authority and with the approval of the Finance Committee of the Knesset, may prescribe an exemption from additional provisions with respect to the said services, all or any of them, provided to all eligible clients or to a particular category of them;
(2)shall notify the client to whom services are provided, prior to entering into a contract with that client, that the person does not hold a licence, and if that person was previously a licence holder – shall also state the circumstances by reason of which that person ceased to be a licence holder, and shall further state in the notice whether that person is insured as required of a licence holder under the provisions of this Law.
(a3)Notwithstanding the provisions of paragraph (5) of subsection (a), a person engaging in investment marketing as referred to in that paragraph, without holding a licence under this Law, shall notify the investment committee or the board of directors, as the case may be, of that person's connection to a financial asset, its nature and particulars.
(a4)Notwithstanding the provisions of paragraph (14) of subsection (a), a person engaging in investment advice or investment marketing as referred to in that paragraph, without holding a licence under this Law, the following provisions shall apply to that person:
(1)the provisions of sections 11, 14, 16(a), 17, 20, 21, 27a and 27b(b), and in respect of a corporation – also section 40d, shall apply to that person as if that person were a licence holder; however, sections 14 and 17(b) shall apply with the following modifications:
(a)notwithstanding the provisions of section 14(b), the matters set out below shall be considered material to advice, marketing or a transaction with respect to a money market fund, and the Authority shall have the power to prescribe provisions regarding the manner of disclosure of these matters:
(1)the identifying details of the fund;
(2)the characteristics of the assets held in the fund;
(3)the dates for the offer of the fund's units and the dates for their redemption;
(4)the fund manager's fee and the trustee's fee as defined in section 80 of the Joint Investments Law;
(5)the fund's yield;
(6)the particulars of the practitioner;
(b)Section 17(b) shall be read as if the following were added at its end:
"(7) receipt of consideration, directly or indirectly, in respect of investment advice or investment marketing in relation to a money market fund, from a person other than the client, in accordance with rules set by the Authority.";
(2)where a person engaged without a licence becomes aware of a conflict of interests between that person or the corporation in which that person is employed or is a partner, and the client, whether in the provision of a service to that client generally or in relation to a specific transaction, that person shall notify the client of the existence of the conflict of interests; the Authority may prescribe provisions regarding the manner of disclosure under this paragraph and the particulars to be included in such disclosure; without derogating from the generality of the foregoing, for the purposes of this paragraph, a connection that a person engaged without a licence has to a money market fund that that person markets, as well as additional circumstances prescribed by the Minister of Finance, shall be regarded as a conflict of interests;
(3)a person engaged without a licence shall submit to the Authority reports and notices concerning that person's activity in investment advice and investment marketing in relation to a money market fund and that person's compliance with the obligations applicable to that person under this Section, in accordance with provisions prescribed by the Authority; in such provisions the Authority may prescribe the particulars to be included in such reports or notices, the times for their preparation, the manner of their submission and their form; with respect to reports and notices under this paragraph, the provisions of subsections (d) to (g) of section 27 and section 27a shall apply, with the necessary modifications;
(4)a person engaged without a licence shall retain information concerning that person's compliance with the obligations applicable to that person under this Section in a retrievable manner, for a period of 7 years.
(b)Notwithstanding the provisions of subsection (a), investment advice in the media, whether by a licence holder or by a person who does not hold a licence, shall include a statement by the person giving the advice as to whether or not that person has a personal interest in the subject matter, as well as a statement that the giving of advice does not constitute a substitute for advice that takes into account the particular data and needs of each individual.
(c)In investment advice, investment marketing or investment portfolio management provided to an eligible client by a licence holder, the provisions of sections 12, 13, 14, 16, 18, 24 and 25, as the case may be, shall not apply; the Minister of Finance, in consultation with the Authority and with the approval of the Finance Committee of the Knesset, may prescribe exemptions from additional provisions in respect of the said services, in whole or in part, provided in relation to all eligible clients or a particular category thereof.
(d)In investment advice or investment marketing by a licence holder whose licence is restricted to engaging in the provision of investment advice or investment marketing in relation to a money market fund as defined in subsection (a)(14) only, sections 4, 12, 13, 15, 16a, 18, 19, 25, 26 and 27c shall not apply, and the provisions of subsection (a4) shall apply.
Solicitation for the provision of services§
3a.
No person shall solicit for the provision of services unless the service is provided by the holder of an appropriate licence under this Law, or by a person who is entitled to provide such a service without a licence, pursuant to the provisions of sections 3 or 9 or Chapter II-A; in this subsection, "solicitation" – whether directly or indirectly, including by means of publication, in circulars, in opinions, by post, facsimile, telephone or any other means.
Prohibited activity by a licence holder§
4.
(a)An individual licence holder shall not hold or purchase securities and units as defined in the Joint Investments Law for that person's own account.
(b)An individual portfolio manager shall not manage investment portfolios for a family member or for a corporation in which that person or a family member is a controlling shareholder.
(c)The prohibition under subsections (a) or (b) shall not apply in relation to the following:
(1)securities issued by the State;
(2)securities issued by the corporation in which the licence holder or that person's spouse is employed (in this paragraph and in paragraphs (2a) and (2b) – the licence holder) or issued by a corporation that controls that corporation, which were offered to the licence holder within the framework of an employee remuneration plan within the meaning of section 15b(1) or (2) of the Securities Law, provided that the licence holder transferred the securities, within seven days from the date on which they were acquired by that person, to a blind trust, and if restrictions on the sale of the securities applied under section 15c(a)(1) of the Securities Law – within seven days from the date on which the restriction period prescribed under that section expired; if the licence holder held, after the acquisition of securities as referred to in this paragraph, only those securities, alone or together with securities referred to in paragraphs (1), (2a), (2b), (3), (4), (6) or (7), the licence holder may refrain from transferring them to a blind trust, however the provisions of section 52i(b) of the Securities Law shall apply to the sale thereof, with the necessary modifications;
(2a)securities held by a licence holder in a corporation at the time that corporation first offered its securities to the public, and in this regard –
(a)the provisions of paragraph (2) shall apply, with the necessary modifications, in respect of the transfer of such securities to a blind trust; if a licence holder held such securities other than in a blind trust, the provisions of section 15 shall apply in respect of advice or the execution of a transaction in those securities;
(b)notwithstanding the provisions of sub-paragraph (a), where the licence holder was an interested party and an employee, or an interested party and an office holder, in such a corporation, that person may refrain from transferring the securities to a blind trust and may also execute transactions for that person's own account in those securities; in such a case the licence holder shall not give advice and shall not execute transactions for that person's clients in relation to the securities of that corporation, and shall also notify all of that person's clients immediately of being an interested party in that corporation and of being precluded from advising or executing transactions for them in relation to those securities;
(c)the provisions of this paragraph shall apply in respect of the holding of securities in one corporation only or in a corporation related thereto;
(2b)securities of a corporation held by the licence holder prior to that person's receipt of the licence, provided that the licence holder transferred the securities, within seven days from the date of receipt of the licence, to a blind trust, and if restrictions on the sale of the securities applied under section 15c(a) of the Securities Law – within seven days from the date on which the restriction period prescribed under that section expired; however, where the licence holder was an interested party and an employee, or an interested party and an office holder, in such a corporation, that person may refrain from transferring the securities to a blind trust and may also execute transactions for that person's own account in those securities; in such a case the licence holder shall not give advice and shall not execute transactions for that person's clients in relation to the securities of that corporation, and shall also notify all of that person's clients immediately of being an interested party in that corporation and of being precluded from advising or executing transactions for them in relation to those securities; the provisions of this paragraph shall apply in respect of the holding of securities in one corporation only or in a corporation related thereto;
(3)units of an open-ended fund or an exchange-traded fund as defined in the Joint Investments Law; however, the provisions of this paragraph shall not apply in respect of the acquisition of units of an open-ended fund or an exchange-traded fund as aforesaid by a licence holder who is one of those listed below, if the proportion of units to be held by that person after the acquisition of such units will exceed twenty-five per cent of the total units of the fund at the end of the day preceding the day of acquisition:
(1)a controlling shareholder of the fund manager;
(2)a director, a member of an investment committee or an employee of the fund manager or of a company that controls the fund manager or is controlled by such a company;
(3a)shares or units of a fund registered outside Israel;
(4)investments in provident funds;
(5)securities acquired by a trustee in a blind trust, and held for an individual licence holder by such a trustee.
(6)foreign securities issued by a corporation whose securities are not listed for trading on a stock exchange, and whose listed trading value of its securities exceeds a sum in new shekels equal to two hundred million United States dollars, or another sum prescribed by the Minister of Finance, by Order, on the proposal of the Authority or in consultation with it and with the approval of the Finance Committee of the Knesset; for this purpose –
"foreign securities" – excluding shares or units of a fund registered outside Israel;
"listed trading value" – the quantity listed for trading of foreign securities issued by the corporation in the place in which they were acquired, multiplied by the price determined for those securities at the close of the trading day preceding the trading day on which they were acquired;
(7)index products.
Prohibition on a significant real-sector corporation controlling and holding means of control in a portfolio manager that is a significant financial body§
4a.
(a)In this Section –
"financial body" and "real-sector corporation" – as defined in section 28 of the Law for the Promotion of Competition and Reduction of Concentration, 5774-2013 (in this Law – the Law for the Promotion of Competition and Reduction of Concentration);
"significant financial body" – a financial body in which one of the following applies:
(1)it is listed on the list of significant financial bodies;
(2)the condition set out in section 29(a)(1) of the Law for the Promotion of Competition and Reduction of Concentration is fulfilled in respect of it, even if it is not listed on the list of significant financial bodies;
"list of significant financial bodies" – the list of significant financial bodies published pursuant to section 29 of the Law for the Promotion of Competition and Reduction of Concentration;
"list of significant real-sector corporations" – the list of significant real-sector corporations published pursuant to section 30 of the Law for the Promotion of Competition and Reduction of Concentration;
"controls", in a real-sector corporation – including holding a controlling block as defined in the Companies Law, in a real-sector corporation in which there is no other controlling shareholder;
"significant real-sector corporation" – a real-sector corporation in which one of the following applies:
(1)it is listed on the list of significant real-sector corporations;
(2)the condition set out in section 30(a)(1) of the Law for the Promotion of Competition and Reduction of Concentration is fulfilled in respect of it, even if it is not listed on the list of real-sector corporations; however, for this purpose, the authority vested in the Commissioner of Competition in the concluding part of the definition "determining sales turnover" in section 30(h) of that Law shall be vested in the Chairperson of the Authority;
(3)the condition set out in section 30(a)(2) of the Law for the Promotion of Competition and Reduction of Concentration is fulfilled in respect of it, even if it is not listed on the list of significant real-sector corporations; however, for this purpose, the authority vested in the Committee for the Reduction of Concentration in the concluding part of the definition "determining credit" in section 30(h) of that Law shall be vested in the Chairperson of the Authority.
(b)A significant real-sector corporation or one who controls it shall not control a portfolio manager that is a significant financial body, and shall not hold more than ten per cent of a particular class of means of control in such a portfolio manager; the Minister of Finance may, on the proposal of the Authority or in consultation with it, prescribe for the purposes of this subsection a rate lower than ten per cent, provided that it shall not be less than five per cent; in prescribing such rate, account shall be taken, inter alia, of the structure of the portfolio management industry.
(c)One who holds more than five per cent of a particular class of means of control in a significant real-sector corporation (in this Section – the holder) shall not control a portfolio manager that is a significant financial body; for the purposes of calculating the holding rate of such a holder, the holdings of the portfolio manager, financial bodies that control it or are controlled by it, or other financial bodies under the control of the holder shall not be counted; for the purposes of calculating the determining sales turnover and the determining credit of the real-sector corporation under section 30 of the Law for the Promotion of Competition and Reduction of Concentration, a real-sector corporation other than the holder or a corporation that is not a real-sector corporation in which the holder holds more than five per cent of the means of control, or a corporation that is not a corporation controlled by such a corporation, shall not be taken into account.
(d)Where a significant real-sector corporation or one who controls it controls a portfolio manager that is a significant financial body, or holds means of control in such a portfolio manager, or where one who holds means of control in a significant real-sector corporation controls a portfolio manager that is a significant financial body, in contravention of the provisions of this Section, that person shall sell the means of control held by that person such that that person does not hold means of control of any class in excess of the rate permitted for holding under this Section, and the Chairperson of the Authority may issue instructions in this regard, including instructions as referred to in paragraphs (1) to (4) of section 23e(a) of the Joint Investments Law, with the necessary modifications; the provisions of subsections (d) and (e) of section 23e of the Joint Investments Law shall apply in this regard, with the necessary modifications; where the Chairperson of the Authority issues instructions pursuant to this subsection, that person shall also send notice thereof to the portfolio manager.
(e)Without derogating from the powers of the Chairperson of the Authority to demand information under this Law, that person may, for the purposes of implementing this Section –
(1)demand from one who controls or holds means of control above the rates referred to in subsections (b) or (c) in a portfolio manager, or from one who applies for a licence to engage in investment portfolio management under section 5, information concerning the total value of assets of that person and of all persons whose total value of assets is taken into account for the purposes of determining a financial body as a significant financial body; for this purpose, "total value of assets" – as defined in section 29(d) of the Law for the Promotion of Competition and Reduction of Concentration;
(2)demand from one who controls or holds means of control above the rates referred to in subsections (b) or (c) in a portfolio manager that is a significant financial body, or from one who applies for a licence to engage in investment portfolio management under section 5 and who will be a significant financial body after receipt of the licence, information concerning the sales data and credit of that person and of all persons whose determining sales turnover or determining credit is taken into account for the purposes of determining a real-sector corporation as a significant real-sector corporation, provided that the Chairperson of the Authority shall not demand information under this paragraph in respect of credit received by an individual unless that person has first demanded information in respect of credit received by the relevant corporations and has found that that information, together with the other information available to that person, is insufficient for the purposes of implementing this Section; for this purpose, "credit", "determining credit" and "determining sales turnover" – as defined in section 30(h) of the Law for the Promotion of Competition and Reduction of Concentration.
Application for a licence§
5.
(a)A person who wishes to engage in investment portfolio management, investment marketing or investment advice shall submit an application to the Authority for an appropriate licence.
(b)An application for a licence as referred to in subsection (a) shall include particulars, documents and reports as prescribed by the Minister of Finance, in consultation with the Authority.
(c)The Authority may require the applicant to submit additional particulars, documents or reports, if it considers that this is required for the purpose of deciding on the application.
Decision of the Authority on an application§
6.
If the Authority is of the opinion that the application should be granted, it shall grant the applicant a licence; if the Authority is of the opinion that conditions should be attached to the licence or that the application should not be granted, it shall notify the applicant of its reasons and give that person an opportunity to present arguments before it, prior to the making of its decision.
Conditions for the grant of an adviser's licence and a marketer's licence§
7.
(a)The Authority shall grant an adviser's licence or a marketer's licence, as the case may be, to an applicant who is an individual, if it is satisfied that the following conditions are fulfilled in relation to that applicant:
(1)the applicant is of age;
(2)the applicant is a resident of Israel, or has proved that, although not a resident of Israel, the applicant is capable of complying with all the provisions under this Law and that those provisions can be enforced against the applicant;
(3)the applicant has not been convicted of an offence;
(4)the applicant has passed examinations the subjects and procedure of which were prescribed in Regulations;
(5)the applicant has completed an apprenticeship for a period and in accordance with procedures prescribed in Regulations;
(6)(Repealed)
(b)The Authority shall grant an adviser's licence or a marketer's licence, as the case may be, to an applicant that is a partnership, if it is satisfied that the following conditions are fulfilled in relation to that partnership:
(1)the partners are licence holders;
(2)the partnership has undertaken that those who engage in investment advice or investment marketing on its behalf, as the case may be, are its employees or partners who are holders of an appropriate licence, or that at least one employee or partner is the holder of an appropriate licence and the others who engage in such activities on its behalf are foreign practitioners permitted to engage in investment advice or investment marketing under the provisions of section 10b;
(3)the partnership satisfies the conditions and amounts prescribed in Regulations with respect to insurance;
(4)the partnership has undertaken that no person shall serve as an office holder in it who is known to it to have been convicted of an offence, and likewise no person in respect of whom a prohibition on serving as an office holder in it applies by reason of an enforcement measure as referred to in section 52bd of the Securities Law, imposed on that person under Chapter VIII-D of the Securities Law, under Chapter VII-B of this Law or under Chapter X-A of the Joint Investments Law — for the duration of the period during which the prohibition applies to that person.
(b1)The Authority shall grant an adviser's licence to an applicant that is a deposit and credit society, if it is satisfied that the following conditions are fulfilled in relation to it:
(1)the society has undertaken that those who engage in investment advice on its behalf are its employees who are holders of an appropriate licence, or that at least one employee is the holder of an appropriate licence;
(2)the society has undertaken that no person shall serve as an office holder in it who is known to it to have been convicted of an offence, and likewise no person in respect of whom a prohibition on serving as an office holder in it applies by reason of an enforcement measure as referred to in section 52bd of the Securities Law, imposed on that person under Chapter VIII-D of the Securities Law, under Chapter VII-B of this Law or under Chapter X-A of the Joint Investments Law — for the duration of the period during which the prohibition applies to that person;
(3)the society has equity capital in an amount not less than the amount to be prescribed in Regulations;
(4)the society has insurance, or a bank guarantee, or a deposit or securities in amounts, at rates and on conditions to be prescribed in Regulations.
(c)The Authority shall grant an adviser's licence or a marketer's licence, as the case may be, to an applicant that is a company, if it is satisfied that the following conditions are fulfilled in relation to that company:
(1)the company has undertaken that those who engage in investment advice or investment marketing on its behalf, as the case may be, are its employees who are holders of an appropriate licence, or that at least one employee is the holder of an appropriate licence and the others who engage in such activities on its behalf are foreign practitioners permitted to engage in investment advice or investment marketing under the provisions of section 10b;
(2)the company has undertaken that no person shall serve as an office holder in it who is known to it to have been convicted of an offence, and likewise no person in respect of whom a prohibition on serving as an office holder in it applies by reason of an enforcement measure as referred to in section 52bd of the Securities Law, imposed on that person under Chapter VIII-D of the Securities Law, under Chapter VII-B of this Law or under Chapter X-A of the Joint Investments Law — for the duration of the period during which the prohibition applies to that person;
(3)the company has equity capital in an amount not less than the amount to be prescribed in Regulations;
(4)the company has insurance, or a bank guarantee, or a deposit or securities in amounts, at rates and on conditions to be prescribed in Regulations;
(5)the company does not engage in underwriting.
(c1)The Authority shall not grant an adviser's licence to an applicant, even if the conditions set out in subsections (a) to (c) are fulfilled in relation to that applicant, if the applicant is any of the following:
(1)the holder of a marketer's licence or an institutional body;
(2)a pension agent as defined in the Pension Advice and Marketing Law;
(3)an insurance agent;
(4)a person who controls or holds more than ten per cent of any class of means of control in any one of those listed in paragraphs (1) to (3);
(5)a person who is controlled by any one of those listed in paragraphs (1) to (4); however, a banking corporation that is controlled by a person who controls an institutional body or by a person who holds more than ten per cent of a certain class of means of control in an institutional body shall be permitted to engage in investment advice subject to conditions set by the Chairperson of the Authority for the prevention of conflicts of interest in the giving of advice, provided that such a banking corporation shall be prohibited from engaging in investment advice in relation to financial assets to which the institutional body in question has a connection;
(6)an office holder in, or a person employed by, any one of those listed in paragraphs (1) to (5).
(c2)The Authority shall not grant a marketer's licence to an applicant, even if the conditions set out in subsections (a) to (c) are fulfilled in relation to that applicant, if the applicant is any of the following:
(1)the holder of an adviser's licence;
(2)a banking corporation, other than a bank or a foreign bank as referred to in section 27i of the Banking (Licensing) Law;
(3)a pension adviser as defined in the Pension Advice and Marketing Law;
(4)a person who controls any one of those listed in paragraphs (1) to (3), other than a person who controls a micro-bank as defined in section 27f(c) of the Banking (Licensing) Law (in this section — micro-bank);
(5)a person who is controlled by any one of those listed in paragraphs (1) to (4);
(6)an office holder in, or a person employed by, any one of those listed in paragraphs (1) to (5).
(c3)Notwithstanding the provisions of subsection (c2), where a bank ceases to be a micro-bank, the provisions of paragraphs (4) and (5) of that subsection shall apply, as the case may be, to a person who controls it or to a person who is controlled by a person who controls it, upon the expiry of the transition period as defined in section 27f(c) of the Banking (Licensing) Law.
(d)The Authority may refuse to grant an adviser's licence or a marketer's licence, as the case may be, to an applicant, if it is of the opinion that there exist circumstances by reason of which the applicant is not fit to serve as the holder of an adviser's licence or the holder of a marketer's licence, as the case may be, having regard to the requirements of the occupation, and if the applicant is a corporation — also if it is of the opinion that circumstances as aforesaid exist in relation to any of the following:
(1)a controlling shareholder of the licence applicant;
(2)an office holder of the licence applicant or of the controlling shareholder of the licence applicant.
(d1)(Repealed)
(e)Regulations with respect to subsections (a)(4) and (5), (b)(3) and (c)(3) and (4) shall be made by the Minister of Finance, generally or for categories of applicants, in consultation with the Authority and with the approval of the Finance Committee of the Knesset.
(f)The Minister of Finance, on the proposal of the Authority or in consultation with it and with the approval of the Finance Committee of the Knesset, may prescribe cases in which an applicant shall be exempt from the obligation of apprenticeship or examinations, or both.
Exemption from the obligation of apprenticeship and examinations upon conversion of an adviser's or marketer's licence§
7a.
An individual holding an adviser's licence who waives that licence and applies to receive a marketer's licence, and likewise an individual holding a marketer's licence who waives that licence and applies to receive an adviser's licence, shall be exempt from the obligation of apprenticeship and from examinations under sections 7(a)(4) and (5), for the purpose of obtaining the licence applied for.
Conditions for the grant of a portfolio manager's licence§
8.
(a)The Authority shall grant a portfolio manager's licence to an applicant who is an individual, if it is satisfied that the following conditions are fulfilled in relation to that applicant:
(1)the applicant is of age;
(2)the applicant is a resident of Israel, or has proved that, although not a resident of Israel, the applicant is capable of complying with all the provisions under this Law and that those provisions can be enforced against the applicant;
(3)the applicant has not been convicted of an offence;
(4)the applicant has passed examinations the subjects and procedure of which were prescribed in Regulations;
(5)the applicant has completed an apprenticeship for a period and in accordance with procedures prescribed in Regulations;
(6)(Repealed)
(b)The Authority shall grant a portfolio manager's licence to an applicant that is a company, if it is satisfied that the following conditions are fulfilled in relation to that company:
(1)the company does not engage in underwriting, and engages only in investment portfolio management, investment advice, investment marketing, or pension advice or pension marketing as defined in the Pension Advice and Marketing Law, or in executing transactions on the exchange, or in providing a financial information service as defined in the Financial Information Service Law, 5782-2021, or in providing a basic initiation service as defined in the Payment Services and Payment Initiation Regulation Law, 5783-2023, and in executing ancillary activities necessary for that purpose; for this purpose, "ancillary activities" — includes investing in deposits of all types in Israeli currency or in foreign currency and investing in savings plans that have received the approval of the Minister of Finance and the Finance Committee of the Knesset under the Savings Encouragement, Income Tax Discounts and Loan Guarantee Law, 5716-1956;
(2)the company has undertaken that those who engage in portfolio management, investment advice or investment marketing on its behalf are employees of the company who are holders of an appropriate licence, or that at least one employee is the holder of a portfolio manager's licence and the others who engage in such activities on its behalf are foreign practitioners permitted to engage in investment portfolio management, investment advice or investment marketing under the provisions of section 10b;
(3)the company has undertaken that no person shall serve as an office holder in it who is known to it to have been convicted of an offence, and likewise no person in respect of whom a prohibition on serving as an office holder in it applies by reason of an enforcement measure as referred to in section 52bd of the Securities Law, imposed on that person under Chapter VIII-D of the Securities Law, under Chapter VII-B of this Law or under Chapter X-A of the Joint Investments Law — for the duration of the period during which the prohibition applies to that person;
(4)the company has equity capital in an amount not less than the amount prescribed in Regulations;
(5)the company has insurance, a bank guarantee, a deposit or securities in amounts, at rates and on conditions prescribed in Regulations.
(c)The Authority may refuse to grant a portfolio manager's licence to an applicant, if it is of the opinion that there exist circumstances by reason of which the applicant is not fit to serve as the holder of a portfolio manager's licence, having regard to the requirements of the occupation, and if the applicant is a corporation — also if it is of the opinion that circumstances as aforesaid exist in relation to any of the following:
(1)a controlling shareholder of the licence applicant;
(2)an office holder of the licence applicant or of the controlling shareholder of the licence applicant.
(c1)(Repealed)
(d)Regulations with respect to subsections (a)(4) and (5) and (b)(4) and (5) shall be made by the Minister of Finance, generally or for categories of applicants, in consultation with the Authority and with the approval of the Finance Committee of the Knesset.
(e)The Minister of Finance, on the proposal of the Authority or in consultation with it and with the approval of the Finance Committee of the Knesset, may prescribe cases in which an applicant shall be exempt from the obligation of apprenticeship or examinations, all or some thereof, or both.
Grant of a licence in special cases§
8a.
(a)The Authority may grant a licence under this Law to an applicant who is an individual, even though a condition set out in section 7(a)(4) or (5) or in section 8(a)(4) or (5), as the case may be, is not fulfilled in relation to that applicant, if it is satisfied that, for special reasons, the applicant may be regarded as qualified to receive such a licence, having regard to the applicant's education and professional experience.
(b)The Authority may grant a licence under this Law, to be restricted under section 6 to engaging in investment advice or investment marketing in relation to a money market fund as defined in section 3(a)(14), even if a condition set out in section 7(b)(1) and (2), (b1)(1) or (c)(1) is not fulfilled in relation to that applicant.
Engaging in a banking corporation§
9.
(a)A banking corporation may not engage in portfolio management.
(b)A bank, and likewise any other banking corporation to the extent permitted to do so under the Banking (Licensing) Law, may engage in investment advice without the need to obtain a licence under this Law, provided that none of the conditions set out in section 7(c1) apply to them, other than the condition in paragraph (4) thereof relating to their holding more than ten per cent of any class of means of control in an institutional body that is an insurer, or relating to their controlling an insurance agent in accordance with the provisions of section 11(b)(2) of the Banking (Licensing) Law; however, those who engage in investment advice on behalf of the bank or the banking corporation, as the case may be, shall be among the following:
(1)employees of the bank or the banking corporation who are holders of an adviser's licence;
(2)employees of the bank or the banking corporation who are permitted to engage in investment advice without a licence under the provisions of section 3(a)(4), (11) or (14);
(3)foreign practitioners permitted to engage in investment advice under the provisions of section 10b.
(b1)A bank and a foreign bank as referred to in section 27i of the Banking (Licensing) Law may engage in investment marketing, provided that they have obtained a licence under section 7, and the provisions of this Law applicable to the holder of a marketer's licence shall apply to them, and those who engage in investment marketing on their behalf shall be among the following:
(1)employees of the bank or the foreign bank who are holders of a marketer's licence;
(2)employees of the bank or the foreign bank who are permitted to engage in investment marketing without a licence under the provisions of section 3(a)(11);
(3)foreign practitioners permitted to engage in investment marketing under the provisions of section 10b.
(b2)The Authority may direct a bank or a foreign bank as referred to in subsection (b1) that all or some of the provisions applicable to a banking corporation under this Law shall apply to it, in lieu of all or some of the provisions of that subsection.
(c)The provisions of Chapter III and of section 25(b) applicable to the holder of an adviser's licence shall also apply to the engagement in investment advice by a bank or any other banking corporation as referred to in subsection (b).
(c1)A banking corporation as referred to in section 7(c2)(2) may not engage in investment marketing; however, such a banking corporation and its employees who are holders of an adviser's licence or who are permitted to engage in investment advice without a licence under the provisions of section 3(a)(11) may engage in investment marketing in relation to structured products, options or futures contracts issued by that banking corporation, even though they are not holders of a marketer's licence, and the provisions of Chapter III, other than section 16a(a)(1) therein, and the provisions of section 25(b1) applicable to the holder of a marketer's licence shall apply to their engagement as aforesaid; the Minister of Finance, in consultation with the Authority and with the approval of the Finance Committee of the Knesset, may prescribe cases in which a banking corporation shall be exempt from a provision of Chapter III or of section 25(b1).
(d)No person shall serve as an office holder in a licensed corporation that is a related corporation of a banking corporation, if that person serves as an office holder or employee of the banking corporation or of another related corporation of it; for this purpose, "employee" — an employee employed by the banking corporation or its related corporation, including an employee on unpaid leave.
(e)The Supervisor of Banks may exempt a person from the application of all or some of the provisions of subsection (d), if the equity capital of the banking corporation to which the licensed corporation is related is lower than an amount set by the Supervisor and published in Reshumot (Official Gazette).
(f)Notwithstanding the provisions of section 2(c), a corporation holding a portfolio manager's licence that is a related corporation of a banking corporation as referred to in section 7(c2)(2) may not engage in investment marketing, other than as provided in subsection (c1).
Revocation of a licence or its suspension§
10.
(a)The Authority may revoke a licence, after the licence holder has been given an opportunity to present arguments before it, if any of the following conditions is fulfilled in relation to the licence holder:
(1)the licence was granted on the basis of false information;
(2)a condition for the grant of the licence has ceased to be fulfilled in relation to the licence holder;
(3)the licence holder has breached a condition of the licence;
(4)a court has determined that the licence holder has breached a provision under this Law or the provisions of any other law relating to securities;
(5)the licence holder has been declared bankrupt and has not yet been granted a discharge as referred to in section 62 of the Bankruptcy Ordinance, or has been declared legally incompetent, and if the licence holder is a corporation — a provisional winding-up order has been made in relation to it, or a receiver has been appointed for it, or the corporation has resolved on voluntary winding-up.
(a1)
(1)The Authority may revoke or suspend the licence of a licensed corporation, after giving the licence holder an opportunity to present arguments before it, if it finds that circumstances listed in a list under paragraph (4) exist, which are indicative of the licence holder being unfit to serve as a licence holder (hereinafter — fitness deficiency); such circumstances shall be examined in relation to the following:
(a)the licence holder;
(b)a controlling shareholder of the licence holder;
(c)an office holder of any of those listed in sub-paragraphs (a) or (b);
(2)a panel may revoke or suspend the licence of an individual licence holder, if circumstances listed in a list under paragraph (4) exist, which are indicative of a fitness deficiency on the part of the licence holder, and the provisions of sections 52as to 52ay of the Securities Law shall apply, with the necessary modifications, to the proceedings for the revocation or suspension of a licence under this paragraph; for this purpose, "panel" — a panel of the Committee as defined in section 38f;
(3)notwithstanding the provisions of paragraph (1), the Authority may direct that the panel shall also decide, within the framework of proceedings as referred to in paragraph (2), on the revocation or suspension of the licence of a licensed corporation on whose behalf an individual licence holder acts, if it finds that circumstances listed in a list under paragraph (4) exist which are indicative both of a fitness deficiency on the part of the individual as aforesaid and of a fitness deficiency on the part of the corporation on whose behalf the individual acts;
(4)the Authority shall establish a list of circumstances capable of indicating a fitness deficiency on the part of a licence holder, an office holder of a licence holder or a controlling shareholder of a licence holder; such a list shall be published on the Authority's website and shall enter into force upon the expiry of 30 days from the date of publication, however a change to the list shall not apply to pending proceedings under this section; notice of the publication of the list and of any change thereto, and their date of commencement, shall be published in Reshumot (Official Gazette).
(b)An individual licence holder who has ceased to engage in the occupation to which the licence relates may apply in writing to the Authority to have the licence revoked or suspended for a period that the applicant requests; a licensed corporation that has ceased to engage in the occupation to which the licence relates may apply in writing to the Authority to have its licence revoked.
(c)(Repealed)
(c1)An individual licence holder who is not insured as required under the provisions of section 20c shall have the licence suspended by the Authority until such insurance is effected.
(d)(Repealed)
(e)Notice of the revocation of a licence or its suspension shall be published, whether by the Authority or by the licence holder, all as the Authority shall direct.
(f)(Repealed)
(g)A person whose licence has been revoked and whose grounds for revocation have been remedied may apply to the Authority to renew the licence; the provisions of sections 7 and 8 shall apply, with the necessary modifications, to the renewal of the licence.
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LawCorporate & Business
חוק הסדרת העיסוק בייעוץ השקעות, בשיווק השקעות ובניהול תיקי השקעות, תשנ"ה-1995
Investment Advice Law
Investment Portfolio Management Law
Investment Marketing Law
Sidur HaIsukum BeYiatz Hashkaot
5755-1995
Investment Advisors Law
Portfolio Management Law
Investment Services Law
Investment Regulation Law
Hashkaot Law