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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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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

This English text was translated from the official Hebrew using a range of translation tools, and it undergoes ongoing checks and updates. It is not a certified translation.

Despite these checks, it may contain errors, omissions, or imprecise renderings of legal terminology and cross-references, and it may not yet reflect the latest amendments. It cannot be relied upon as a legal text.

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.

This translation is provided for informational purposes only and does not constitute legal advice. For use in legal proceedings, request a certified Expert Legal Opinion.

Chapter VI: Functions and Powers of the Authority

Supervision by the Authority over a Licence Holder§

28.
(a)In the discharge of the licence holder's obligations under this Law, the licence holder shall be subject to the supervision of the Authority.
(b)The Authority may, for the purpose of supervision as referred to in subsection (a), issue directives concerning the manner of operation and management of a licence holder, of an office holder therein and of any person employed by the licence holder, all in order to ensure the proper management of the licence holder and the safeguarding of the interests of its clients and to support the stability and orderly functioning of the financial system; such directives may be issued to all licence holders or to a particular category of licence holder.
(c)(Repealed)
(d)
(1)The Authority may, for the purpose of supervision as referred to in subsection (a), also authorise a person who is not an employee of the Authority to conduct an inspection of a licence holder and to demand documents and information relating to the licence holder that are necessary for the performance of its functions, provided that both of the following conditions are met:
(a)the Israel Police has notified, not later than three months from the date of receipt of the candidate's particulars, that it has no objection to the authorisation of that person on grounds of public security, including by reason of the candidate's criminal record;
(b)that person has received appropriate training or has fulfilled additional eligibility conditions, as directed by the chairperson of the Authority;
(2)a person authorised under this subsection shall not disclose the contents of any information or document that came to that person's knowledge by virtue of that person's position, except for the purpose of the inspection, or to the chairperson of the Authority or to an employee of the Authority pursuant to a directive of the chairperson of the Authority; nothing in this provision shall prevent disclosure pursuant to a demand of the Attorney General for the purpose of criminal proceedings or pursuant to a demand of a court.

Application of Powers of the Authority§

29.
(a)In this section –

"breach" – any of the following:

(1)a breach as referred to in section 38a;
(2)a breach as defined in section 38f;

"offence" – any of the following:

(1)an offence under this Law;
(2)an offence under sections 284, 290, 291, 415, 423, 424, 424a and 425 of the Penal Law, committed in connection with an offence under paragraph (1);
(3)an offence under sections 3 and 4 of the Prohibition of Money Laundering Law, 5760-2000, committed in connection with an offence under paragraphs (1) or (2);
(4)an offence under sections 240, 242, 244, 245 or 246 of the Penal Law, committed in connection with an investigation or judicial proceeding in respect of an offence under paragraphs (1) to (3).
(b)
(1)In order to ensure the implementation of this Law, or if there was reasonable ground to assume that a breach has been committed or suspicion arose of the commission of an offence, the chairperson of the Authority or an employee of the Authority authorised by the chairperson in writing may –
(a)demand from any person any information and documents relating to the affairs of a licence holder or relating to the breach or offence referred to;
(b)enter, after having identified themselves, any premises where there is ground to assume that the activity of a supervised entity as defined in the Securities Law is conducted and which does not serve solely as a dwelling, and demand that documents as referred to in sub-paragraph (a) be delivered; however, such a document may not be seized if it is possible to make do with a copy thereof;
(2)the provisions of section 56a(b) of the Securities Law shall apply in respect of the return of a document delivered to the Authority under paragraph (1).
(c)The provisions of sections 56a1 to 56e of the Securities Law shall apply, with the necessary modifications and with this modification: in section 56c2, instead of "paragraphs (3) or (4) of the definition 'securities offence'" it shall read "paragraphs (2) or (3) of the definition 'offence' as defined in the Investment Advice Law".

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Chapter VII: Disciplinary Offences and Disciplinary Adjudication

30.§

(Repealed — תשע״א)

31.§

(Repealed — תשע״א)

32.§

(Repealed — תשע״א)

33.§

(Repealed — תשע״א)

34.§

(Repealed — תשע״א)

35.§

(Repealed — תשע״א)

36.§

(Repealed — תשע״א)

37.§

(Repealed — תשע״א)

38.§

(Repealed — תשע״א)

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Chapter VII-A: Imposition of a Financial Sanction by the Authority

Financial Sanction§

38a.
(a)Where a person has breached a provision of the provisions under this Law that apply to that person, as detailed in the Second Schedule (in this Chapter – violator and breach, respectively), the Authority may impose a financial sanction on the violator, and the provisions under Chapter VIII-C of the Securities Law shall apply in that regard, with the necessary modifications and the modifications set out in this Chapter.
(b)For the purposes of this Chapter, the definition "repeated breach" in section 52s of the Securities Law shall be read as if at its end there were added "and for the purposes of item (26) in Part 1 of the Second Schedule to the Investment Advice Law, a breach of the same directive issued under section 28(b) of the Investment Advice Law shall be examined".

Amount of the Financial Sanction§

38b.
(a)The amount of the financial sanction to be imposed on a violator under this Chapter shall be the amount specified in relation thereto in the Third Schedule.
(b)The amount of the financial sanction to be imposed under this Chapter on a violator that is a company holding a portfolio management licence shall be determined according to the Third Schedule in accordance with the total asset value of the company; for this purpose, "total asset value" – the value of the securities and financial assets under the management of the company, in accordance with the last report submitted by the company to the Authority under this Law before the date of commission of the breach.
(c)The amount of the financial sanction to be imposed under this Chapter on a violator that is a corporation holding an investment advice or investment marketing licence shall be determined according to the Third Schedule in accordance with the number of licence holders employed by the corporation, in accordance with the last report submitted by the corporation to the Authority before the date of commission of the breach.

Reduced Amounts§

38c.
(a)The Authority is not entitled to impose a financial sanction in an amount lower than the amounts specified in the Third Schedule, except pursuant to the provisions of subsection (b).
(b)The Minister of Finance, with the consent of the Minister of Justice, may prescribe cases, circumstances and considerations by reason of which it shall be possible to reduce the amount of the financial sanction specified in the Third Schedule, by maximum rates to be prescribed.

Breach of Identical Provision in Respect of Several Clients§

38d.

A breach of an identical provision in respect of several clients shall be regarded as a single breach, and the financial sanction under section 38b shall be determined in accordance with the date of the last breach.

Amendment of the Second Schedule and the Third Schedule§

38e.

The Minister of Finance may, by Order, on the proposal of the Authority or in consultation with it, with the consent of the Minister of Justice and with the approval of the Finance Committee of the Knesset, amend the Second Schedule and the Third Schedule, provided that the amount of the financial sanction fixed in the Third Schedule shall not exceed NIS 2,572,000.

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Chapter VII-B: Imposition of Administrative Enforcement Measures by the Administrative Enforcement Committee

Definitions§

38f.

In this Chapter –

"the Committee" – the Administrative Enforcement Committee appointed under section 52af(a) of the Securities Law;

"breach" – an act or omission that is one of the following:

(1)it is detailed in the Fourth Schedule;
(2)it is included in the list of acts or omissions prescribed by the Authority under section 38k, which are capable of indicating that the person who committed them did not exercise the care that a reasonable licence holder would have exercised in similar circumstances.

Application of Provisions Regarding Investigation of a Breach and Administrative Enforcement Proceeding§

38g.

Where a person has committed a breach, the provisions of Chapter VIII-D of the Securities Law that apply in respect of a violator and in respect of a breach of a provision listed in Part 3 of the Seventh Schedule to that Law shall apply, with the necessary modifications and the modifications set out in this Section, in respect of the violator and in respect of the breach.

Application of Provisions Regarding a Financial Sanction§

38h.

For the purpose of imposing a financial sanction under this Chapter, the provisions of section 52ba(a) of the Securities Law shall apply, as follows:

(1)in respect of a violator who is an individual holding an investment advice or investment marketing licence – at a maximum amount of NIS 25,000;
(2)in respect of a violator who is an individual holding a portfolio management licence – at a maximum amount of NIS 50,000;
(3)in respect of a violator who is another individual – at a maximum amount of NIS 1,000,000;
(4)in respect of a violator that is a corporation – at a maximum amount of NIS 5,000,000.

Liability of General Manager and Partner other than Limited Partner§

38i.

The provisions of section 52bl of the Securities Law shall apply in respect of a violator and a violation; however, the maximum monetary sanction that may be imposed under this section on the general manager of a corporation or a partner other than a limited partner in a partnership, as the case may be, is NIS 50,000.

Prohibition of Indemnification and Insurance§

38j.
(a)Notwithstanding the provisions of any law, and without derogating from the provisions of sections 262 to 264 of the Companies Law –
(1)a proceeding under this Chapter, and under Chapters VII-A and VIII-A (in this section – a proceeding), may not be insured, directly or indirectly;
(2)a contract for insurance against the occurrence of a proceeding as an insured event – is void;
(3)a corporation shall not indemnify or pay, directly or indirectly, a monetary sanction imposed on another, and a controlling shareholder in a corporation shall not indemnify or pay, directly or indirectly, a monetary sanction imposed on the corporation, on a senior office holder in the corporation or on an employee of the corporation;
(4)a provision or undertaking to indemnify in respect of a proceeding – is void.
(b)
(1)Notwithstanding the provisions of subsection (a), a person may be indemnified or insured in respect of a payment to a victim of the violation as referred to in section 52bb(a)(1)(a) of the Securities Law or in respect of expenses incurred in connection with a proceeding conducted in that person's matter, including reasonable litigation expenses, and including legal fees, and including by way of advance indemnification;
(2)an undertaking to indemnify or to insure under paragraph (1), of an office holder in a corporation, shall not be valid unless a provision permitting this has been set out in the articles of association of the company.

List of Acts or Omissions Capable of Indicating a Deficiency in Care§

38k.

The Authority shall establish, for the purposes of this Chapter, a list of acts or omissions capable of indicating that a licence holder who committed them did not act with the care that a reasonable licence holder would have exercised in similar circumstances; 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, provided that an amendment to the list shall not apply to a pending administrative enforcement proceeding; notice of the publication of the list and of any amendment thereto, and of the date of their commencement, shall be published in Reshumot (Official Gazette).

Amendment of the Fourth Schedule§

38l.

The Minister of Finance may, by Order, on the proposal of the Authority or in consultation with it, with the consent of the Minister of Justice and with the approval of the Finance Committee of the Knesset, amend the Fourth Schedule.

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Chapter VIII: Penalties

Penalties§

39.
(a)A person who does any of the following is liable to two years' imprisonment or a fine of five times the fine prescribed in section 61(a)(3) of the Penal Law, and if that person is a corporation – twice that fine:
(1)engaged in investment advice, investment marketing or investment portfolio management without holding a licence, in contravention of the provisions of section 2(a) to (b1);
(2)employed in investment marketing a person who does not hold a marketer's licence, in contravention of the provisions of section 2(b2);
(3)engaged in portfolio management, in contravention of the provisions of section 9(a);
(4)engaged in investment advice, in contravention of the provisions of section 9(b), or employed in investment advice a person who does not hold an adviser's licence, in contravention of the provisions of that section;
(5)engaged in investment marketing or employed workers in investment marketing, in contravention of the provisions of section 9(c1);
(6)engaged in investment marketing, in contravention of the provisions of section 9(f).
(b)A person who does any of the following is liable to one year's imprisonment or a fine of five times the fine prescribed in section 61(a)(2) of the Penal Law, and if that person is a corporation – twice that fine:
(1)held or acquired securities for that person's own account, in contravention of the provisions of section 4(a);
(2)managed investment portfolios for a family member or for a corporation in which that person or a family member is a controlling shareholder, in contravention of the provisions of section 4(b);
(2a)furnished false or misleading information in an application for a licence under section 3(a4)(3), (d) or 5, or in a report to the Authority under section 27;
(2b)controlled a portfolio manager that is a significant financial body, or held means of control in such a portfolio manager, in contravention of the provisions of section 4a;
(3)served as an office holder in a licensed corporation, in contravention of the provisions of section 9(d);
(4)received a benefit in connection with investment advice, investment marketing, the execution of a transaction or the refraining from the execution of a transaction, in contravention of the provisions of section 17(a);
(5)granted a benefit, directly or indirectly, to one of that person's employees, one of that person's branches or one of that person's units, in connection with investment advice, investment marketing, the execution of a transaction or the refraining from its execution, in contravention of the provisions of section 17(c);
(6)determined the calculation of the fees and reimbursement of expenses to be charged to the client, in contravention of the provisions of section 17(d);
(7)gave advice or executed a transaction in respect of a financial asset to which an institutional body that is an interested party in the adviser or in the adviser's employer has a connection, in contravention of the provisions of section 17a;
(8)entered into an exceptional agreement with an institutional body without having received approval therefor, in contravention of the provisions of section 17b(a);
(9)(Repealed)
(10)used the word "advice" or a word derived therefrom in the name under which that person conducts business or in a publication on that person's behalf, in contravention of the provisions of section 20b.
(11)a person who does not hold a licence and engaged in investment advice in the media without including notices as referred to in section 3(b);
(12)addressed a proposal for the provision of services, in contravention of the provisions of section 3a;
(13)disclosed the contents of information or a document that came to that person's knowledge by virtue of that person's position, in contravention of the provisions of section 28(d)(2).
(b1)A person who does something with the intent of preventing or obstructing a violation inquiry proceeding or an administrative enforcement proceeding, under Chapter VIII-D of the Securities Law as applied in Chapter VII-B, is liable to three years' imprisonment or a fine of two and a half times the fine referred to in section 61(a)(4) of the Penal Law, and if that person is a corporation – five times the fine referred to in that section.
(c)(Repealed)
(d)(Repealed)

Liability of Corporation Manager§

40.

Where an offence referred to in section 39 is committed by a corporation, the directors of the corporation and its general manager are also liable for the offence, and in a partnership the partners, other than limited partners, are liable, unless they proved one of the following:

(1)that the offence was committed without their knowledge and that they were not required to know of it or could not have known of it;
(2)that they took all reasonable measures to prevent the offence.

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