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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 VIII-A: Arrangement for Refraining from Taking Proceedings or for the Cessation of Proceedings, Subject to Conditions

Definitions§

40b.

In this Chapter –

"proceedings" – a violation inquiry proceeding or an administrative enforcement proceeding, under Chapter VIII-D of the Securities Law as applied in Chapter VII-B, or a criminal investigation under section 56c of the Securities Law as applied in section 29(c), as the case may be;

"violation", "offence" – as defined in section 29(a).

Authority of the Chairperson of the Authority or a District Prosecutor to Enter into an Arrangement for Refraining from Taking Proceedings or for the Cessation of Proceedings, Subject to Conditions§

40c.

The authority vested in the Chairperson of the Authority and in a district prosecutor to enter into an arrangement for refraining from taking proceedings or for the cessation of proceedings, as the case may be, subject to conditions, in accordance with the provisions of Chapter IX-A of the Securities Law, shall be vested in them in respect of a violation or an offence, and the provisions of that Chapter shall apply in that regard, with the necessary modifications.

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Chapter IX: Miscellaneous Provisions

Service of Documents from the Authority by Secure Electronic Mail§

40d.

The provisions under Chapter VII-B of the Securities Law, with the necessary modifications, shall apply to a notice, directive, demand and any other document that the Authority or an employee authorised by it therefor is entitled to serve under this Law, on a licensed corporation or on a person who has submitted an application for a licensed corporation licence.

Publication of Authority Directives§

40e.
(a)Authority directives under sections 3(a4)(1)(a), (2) and (3) and 28(b) need not be published in Reshumot (Official Gazette); however, the Authority shall publish in Reshumot (Official Gazette) a notice of the issuance of such directives and of the date of their commencement.
(b)Authority directives as referred to in subsection (a), and any amendment thereto, shall be made available for public inspection at the offices of the Authority and shall be published on its website.

Fees§

41.
(a)The Minister of Finance, in consultation with the Authority and with the approval of the Finance Committee of the Knesset, may prescribe fees that applicants for licences, licence holders, and those applying to be registered in the register of foreign practitioners or registered therein under the provisions of Chapter II-A are required to pay to the Authority, and may also prescribe provisions regarding linkage differentials and interest to be paid in respect of late payment of fees under this section, and regarding the application of the Tax Collection Ordinance to the collection of fees and linkage differentials and interest as aforesaid.
(b)Where a licence holder or a person registered in the register of foreign practitioners has not paid a fee that was required to be paid under the provisions of subsection (a) within one year from the date prescribed for its payment under the provisions of that subsection, that person's licence shall be suspended or that person's registration shall be deleted, as the case may be, with effect from the date prescribed therefor in a warning served on that person by the Authority until payment of the fee together with linkage differentials and interest under the provisions of that section; a licence holder whose licence has been suspended under the provisions of this subsection shall immediately notify that person's clients thereof in writing; notice of the deletion of registration from the register of foreign practitioners under the provisions of this subsection shall be given in accordance with the provisions of section 10g.
(c)The renewal of a licence that has been revoked or suspended under this Law or the renewal of registration in the register of foreign practitioners that has been deleted under this Law shall be conditional upon payment of the debts of the licence holder or the person whose registration has been deleted, as the case may be, in respect of non-payment of a fee or in respect of non-payment of linkage differentials and interest that were required to be paid under the provisions of subsection (a).

Amendment of the First Schedule§

41a.

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

Implementation and Regulations§

42.

The Minister of Finance is charged with the implementation of this Law, and may make Regulations on any matter relating to its implementation, on the proposal of the Authority or after consultation with it; Regulations under this section shall be made with the approval of the Finance Committee of the Knesset.

Amendment of the Banking (Licensing) Law – No. 10§

43.

In the Banking (Licensing) Law, 5741-1981 –

(1)in section 1 –
(a)after the definition of "the Ordinance" there shall come:

""underwriting commitment" – as defined in section 1 of the Investment Advice, Investment Marketing and Investment Portfolio Management Law, 5755-1995;";

(b)after the definition of "real property" there shall come:

""investment portfolio management" – as its meaning in the Investment Advice, Investment Marketing and Investment Portfolio Management Law, 5755-1995;";

(2)in section 10 –
(a)in paragraph (7), after "as an agent or as a trustee" there shall come "but excluding the giving of an underwriting commitment, the management of a joint investment fund in trust as its meaning in the Joint Investments in Trust Law, 5754-1994, or investment portfolio management;";
(b)in paragraph (9), instead of "as a dealer, as an agent or as an underwriter" there shall come "as a dealer or as an agent";
(3)in section 11, after paragraph (3) there shall come:

"(3a) a corporation engaged in the giving of underwriting commitments whose other activities are activities permitted to a bank under section 10;

(3b)a corporation whose activity is investment portfolio management;
(3c)a fund manager for joint investments in trust;".

Amendment of the Banking (Customer Service) Law – No. 4§

44.

In the Banking (Customer Service) Law, 5741-1981, in section 5(a), paragraph (4) – shall be deleted.

Amendment of the Banking Ordinance – No. 19§

45.

In the Banking Ordinance, 1941, in section 15c, instead of "auxiliary corporation" there shall come "a corporation as referred to in paragraphs (3a) to (4) of section 11 of the Banking (Licensing) Law, 5741-1981.".

Amendment of the Joint Investments Law§

46.

In the Joint Investments in Trust Law, 5754-1994 –

(1)in section 9(a), instead of paragraph (3) there shall come:

"(3) it holds insurance, a bank guarantee, a deposit or securities in amounts, at rates and on conditions prescribed by the Minister of Finance; insurance under this paragraph may be prescribed as additional insurance over and above insurance required by reason of its other activities.";

(2)in section 13(a), instead of paragraph (3) there shall come:

"(3) it holds insurance, a bank guarantee, a deposit or securities in amounts, at rates and on conditions prescribed by the Minister of Finance.".

Commencement and Transitional Provisions for Certain Sections§

47.
(a)Sections 2 to 8, 10, 39 and 40 shall commence on the 26th day of Sivan 5757 (1 July 1997).
(b)Sections 13, 16(b) and (c), 17, 18 and 26 shall commence, insofar as they relate to persons who were clients of an investment adviser or portfolio manager on the eve of the publication of this Law, upon the expiry of six months from the date of publication.
(c)For the purposes of subsections (a) and (b), an individual or corporation engaging in investment advice or portfolio management on the date of publication of this Law and until the 25th day of Sivan 5757 (30 June 1997) shall be regarded as if that person were a licence holder under this Law.

Transitional Provisions§

48.
(a)In this section –

"examinations" – examinations prescribed under sections 7 and 8 of this Law;

"the qualifying period" – the period commencing on the 2nd day of Elul 5754 (9 August 1994) and ending on the 25th day of Sivan 5757 (30 June 1997).

(b)For the purpose of obtaining a portfolio manager's licence, a person who engaged in portfolio management in Israel continuously throughout the qualifying period shall be exempt from the examinations, except for an examination on the subject of professional ethics.
(c)For the purpose of obtaining an investment adviser's licence, a person who engaged in investment advice or portfolio management in Israel continuously throughout the qualifying period shall be exempt from the examinations, except for the examination on the subject of professional ethics.
(c1)The provisions of subsections (b) and (c) shall apply to a person who submitted an application for a licence with exemption from examinations as referred to in those subsections, until the 3rd day of Shevat 5766 (1 February 2006).
(d)A person who, on the 6th day of Tammuz 5758 (30 June 1998), was engaged in investment advice or portfolio management, as the case may be, by virtue of a temporary licence, is exempt, until the 22nd day of Tevet 5760 (31 December 1999), from the examinations, except for the examination on the subject of professional ethics.
(e)(Repealed)

Publication in Reshumot (Official Gazette)§

49.

This Law shall be published within 30 days of the date of its adoption.

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First Schedule (the definition "eligible client" in section 1)

1.§

A joint investment fund in trust or a fund manager.

2.§

A managing company or a provident fund as defined in the Provident Funds Supervision Law.

3.§

An insurer.

4.§

A banking corporation and an ancillary corporation as defined in the Banking (Licensing) Law, other than a joint services company.

5.§

A licence holder.

6.§

An exchange member.

7.§

An underwriter who fulfils the eligibility conditions under section 56(c) of the Securities Law.

8.§

A corporation, other than a corporation that was incorporated for the purpose of receiving services, whose equity exceeds NIS 50 million; in this paragraph, "equity" – including under foreign accounting rules, international accounting standards, and generally accepted accounting principles in the United States as defined under sections 17(b)(1) and 36 of the Securities Law.

9.§

An individual who fulfils two of the following conditions and who has given prior written consent to being regarded as an eligible client for the purposes of this Law:

(1)the total value of cash, deposits, financial assets and securities as defined in section 52 of the Securities Law, owned by that individual, exceeds NIS 12 million;
(2)that individual possesses expertise and qualifications in the field of the capital market, or was employed for at least one year in a professional position requiring expertise in the capital market;
(3)that individual carried out at least 30 transactions, on average, in each quarter during the four quarters preceding that individual's consent; for this purpose, "transaction" – other than a transaction carried out by a portfolio manager on behalf of an individual with whom that portfolio manager is party to a portfolio management agreement.
10.§

A corporation that is wholly owned by investors listed in this Schedule.

11.§

A corporation incorporated outside Israel whose activity characteristics are similar to those of a corporation listed in this Schedule.

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First Schedule A (section 24a)

"large portfolio management company" – a company that is the holder of a portfolio manager's licence in respect of which, on the 31st of December, at least one of the following two conditions was fulfilled:

(1)it and other companies that are holders of a portfolio management licence belonging to the same group had, together, more than 50 clients and the total value of their assets was more than NIS 5 billion;
(2)it and other companies that are holders of a portfolio management licence belonging to the same group had, together, more than 1,000 clients;

a company shall continue to be regarded as a large portfolio management company even if the said conditions have ceased to be fulfilled, until the end of three years from the day on which none of those conditions was fulfilled in respect of it;

"group" – a group of corporations that maintain control relationships among themselves, including a subsidiary and an associated company, as defined in the Securities Law, and a company controlled by a company that controls each of them;

"total asset value" – the value of the securities and financial assets under the management of a portfolio management company.

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Second Schedule (section 38a)

Part 1

(1)a licence holder who gave investment advice in the media without including a notice as to whether or not that licence holder has a personal interest in the matter, or a notice that the giving of the advice does not constitute a substitute for advice that takes into account the particular data and needs of each person, contrary to the provisions of section 3(b), unless the licence holder delivered the said notices to the media and received its written undertaking to include such notices in the publication;
(1a)held or acquired securities or units as defined in the Joint Investments Law, for that licence holder's own account, contrary to the provisions of section 4(a);
(1b)managed investment portfolios for a family member or for a corporation in which that licence holder or a family member is a controlling shareholder, contrary to the provisions of section 4(b);
(2)failed to specify in an agreement with a client the services to be provided by a foreign operator or the financial assets and securities in respect of which such services are to be provided, contrary to the provisions of section 10d;
(3)failed to notify a client immediately of the cessation of activity of a foreign operator, contrary to the provisions of section 10g;
(4)failed to ascertain from a client the investment objectives, financial position, including securities and financial assets, or other relevant circumstances of the client, even though the client agreed to provide information in respect of those matters, contrary to the provisions of section 12;
(5)failed to draw up a written agreement with a client or failed to deliver to a client a copy of such an agreement, prior to the commencement of the provision of the service, or failed to include in such an agreement the matters required to be included therein or failed to update the client's particulars therein, contrary to the provisions made under section 13;
(6)failed to include in the records of conversations with a client particulars prescribed under section 15(a), or failed to prepare or retain such particulars or failed to deliver them to the client, contrary to the provisions made under that section;
(7)ordered, on behalf of a client, securities for which a corporation connected to that licence holder or a corporation connected to the corporation in which that licence holder is employed serves as underwriter for their offering, without having received the client's prior written consent thereto, or failed to report to the client on such an order within 30 days of the date of its execution, contrary to the provisions of section 16(b);
(8)purchased on behalf of a client securities for which a corporation connected to that licence holder or a corporation connected to the corporation in which that licence holder is employed served as underwriter for their offering, before three months had elapsed from the date of fulfilment of the underwriting commitment, without having received the client's prior written consent thereto, purchased on behalf of a client such securities after three months had elapsed from the date of fulfilment of the underwriting commitment but before six months had elapsed from that date without having received the client's prior written consent thereto, or failed to report to the client on such a purchase within 30 days of the date of its execution, contrary to the provisions of section 16(c);
(9)executed a purchase of securities for which a corporation connected to that licence holder or a corporation connected to the corporation in which that licence holder is employed served as underwriter for their offering, outside the stock exchange or at a rate exceeding the known stock exchange rate at the time of the purchase, contrary to the provisions of section 16(d);
(10)failed to bring to the attention of clients, at the place where that licence holder conducts business, by means of a conspicuous and clear sign or in another manner as directed by the Chairperson of the Authority, the fact that that licence holder engages in investment marketing and not in investment advice, or the fact that that licence holder is a corporation connected to an institutional body or to a marketer, as the case may be, or the institutional bodies to whose financial assets that licence holder has a connection, contrary to the provisions of section 16a(a)(1), or failed to disclose to a client prior to entering into a contract with that client, in language intelligible to that client, orally and in a written document, or failed to publish on that licence holder's website, the fact that that licence holder so engages or the fact that that licence holder is such a corporation, the connection that that licence holder has to financial assets and its nature, or the fact that that licence holder gives preference to those assets, contrary to the provisions of section 16a(a)(2), or failed to include a notice as to whether or not that licence holder has a personal interest in the matter, or failed to include a notice that the investment marketing does not constitute a substitute for marketing that takes into account the particular data and needs of each person, contrary to the provisions of section 16a(d);
(11)failed to notify a client of the special risk involved in the execution of a transaction of the type listed in section 18(c), contrary to the provisions of section 18(a);
(12)executed on behalf of a client a transaction of the type listed in section 18(c), without the client having given prior written approval for that transaction or for transactions involving the same type of risk, contrary to the provisions of section 18(b);
(13)failed to keep confidential information brought to that licence holder's knowledge by a client, including documents transferred to that licence holder's possession and their content, or any other detail relating to actions in respect of which that licence holder provided advice or marketing to the client or executed for the client's account, contrary to the provisions of section 19;
(14)published in the media, in a circular, by post, electronic mail, facsimile, internet or any other means, the fact of engaging in investment advice in relation to financial assets to which a particular institutional body has a connection, contrary to the provisions of section 20a;
(15)engaged in the occupation that is the subject of the licence while not meeting the conditions and amounts prescribed in respect of insurance, equity, bank guarantee, deposit or securities, contrary to the provisions of section 20c;
(16)failed to hold clients' securities or financial assets separately from that licence holder's own, contrary to the provisions of section 22(1);
(17)failed to hold each client's securities or financial assets separately or failed to maintain separate records in respect of moneys, securities and financial assets of each client, contrary to the provisions of section 22(2);
(18)managed on behalf of a client a monetary account, a securities account or financial assets, other than with a banking corporation, with a bank outside Israel, with an exchange member, or with a person who is entitled under the law of the state in which that person operates to manage on behalf of a client a monetary account, a securities account or financial assets, contrary to the provisions of section 22(3);
(19)failed to execute transactions on behalf of clients separately from those executed for that licence holder's own account, contrary to the provisions of section 22(4);
(20)failed to credit or debit the client's accounts at that licence holder's office on the day of execution of the transaction, contrary to the provisions of section 22(5);
(21)used moneys, securities or financial assets of a client otherwise than for the purpose of executing transactions on behalf of that client or otherwise than in accordance with the agreement entered into with that client and the power of attorney received from that client, contrary to the provisions of section 23(a);
(22)executed a transaction with a client or derived a benefit from a client's assets, without having received the client's prior written consent for that transaction or that benefit, contrary to the provisions of section 23(b);
(23)made remuneration conditional on the profit derived by the client from a transaction or on the number of transactions executed on behalf of the client, contrary to the provisions of section 24;
(23a)contravened provisions made under sections 24b(a) to (c) or (e) or 24b1, regarding the tenure or appointment of external directors or restrictions on tenure on the board of directors;
(23b)served as a director of more than two financial bodies at the same time, contrary to the provisions of section 24b(d), or served as a member of an audit committee, contrary to the restrictions prescribed in section 24h(d);
(23c)contravened the provisions of section 24c(b) or (c) regarding the restriction on the tenure of a chief executive officer and the conferral of the chief executive officer's powers;
(23d)contravened provisions made under section 24d regarding eligibility conditions for directors and members of committees, regarding the internal control framework and the internal enforcement plan;
(23e)contravened the provisions of section 24e(a) or (b) regarding the conduct of board of directors meetings;
(23f)failed to draw up minutes at meetings of the board of directors or the audit committee as required under sections 24e(c) or 24h(j);
(23g)contravened the provisions of section 24f(2) in that the board of directors failed to approve the internal control framework and the internal enforcement plan for a period exceeding six months;
(23h)contravened the provisions of section 24f(4) or (5) in that the board of directors failed to fulfil one of its functions under that section for a period exceeding six months;
(23i)contravened the provisions of section 24h(b)(1) or (2) in that the audit committee it appointed failed to deliberate on the internal auditor's work plan or on the means of rectifying deficiencies that were found;
(23j)contravened provisions made under section 24h(c) or (d) regarding the composition of the audit committee it appointed and restrictions on tenure thereon;
(23k)contravened the provisions of section 24h(g) or (h) regarding the holding of audit committee meetings;
(24)failed to maintain records of a transaction executed on behalf of a client, of an advisory act given to a client or of a marketing act carried out in relation to a client, or failed to retain such records for a period of seven years, contrary to the provisions made under section 25;
(25)failed to provide a client with a report, contrary to the provisions made under section 26, or failed to include a particular that was required to be included therein in accordance with the provisions made under section 27c, provided that a special requirement to state that particular was prescribed under that section;
(26)contravened a direction given under section 28(b);
(27)failed to deliver information or a document contrary to a demand of the Chairperson of the Authority or of an employee of the Authority authorised for that purpose directed to a supervised entity as defined in the Securities Law, contrary to the provisions of section 29(b) or contrary to the provisions of section 56a1 of the Securities Law as applied by section 29(c);
(28)failed to deliver a notice to clients or failed to publish a notice in a newspaper, contrary to the provisions of sections 38a(a), 38g or 40c;
(29)insured, indemnified or paid a financial sanction on behalf of another, contrary to the provisions of section 38j.

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