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
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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 II-A: Investment Advice, Investment Marketing and Investment Portfolio Management by a Foreign Practitioner
Section A: Definitions
Definitions§
10a.
In this Chapter —
"foreign permit" — a permit to engage in the provision of services, in a foreign state, under the law of that state;
"foreign individual" — an individual who is not a resident of Israel and who holds a foreign permit;
"foreign practitioner" — a foreign individual or a foreign corporation;
"foreign corporation" — a corporation in respect of which all of the following conditions are fulfilled:
(1)it was incorporated outside Israel;
(2)control over it is held by a person who is not a resident of Israel; for this purpose, holding securities together with another person shall not be regarded as holding with a resident of Israel;
(3)it holds a foreign permit;
(4)its activities under the foreign permit are carried out, as a general rule, outside Israel;
"licensed corporation" — including a bank and any other banking corporation permitted to engage in investment advice or investment marketing under the Banking (Licensing) Law.
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Contact Us →Section B: Provision of Services by a Foreign Practitioner within a Licensed Corporation
Provision of Services by a Foreign Practitioner within a Licensed Corporation§
10b.
(a)Notwithstanding the provisions of section 2, a foreign practitioner may engage in the provision of services to clients of a licensed corporation, even without an appropriate licence under this Law, provided that the conditions set out below are fulfilled and subject to the provisions of this Chapter:
(1)the foreign practitioner and the licensed corporation have entered into a written agreement for the provision of the said services;
(2)the foreign permit held by the foreign practitioner authorises that practitioner to engage, in the state in which the permit was granted, in the provision of the said services, and if the foreign practitioner is a foreign corporation – the persons employed in its name in the provision of the said services also hold a foreign permit as aforesaid;
(3)the licensed corporation is entitled to provide the services itself to its clients under the provisions of this Law;
(4)the foreign practitioner and the licensed corporation have been registered in the Registry of Foreign Practitioners under the provisions of Section C.
(b)Notwithstanding the provisions of subsection (a), where the licensed corporation is a foreign bank, the provisions of sections 10c, 10e and 10f shall apply even where the service is provided to persons who are not clients of the licensed corporation, provided that they are clients of a bank that controls the licensed corporation or of a bank that is controlled by the licensed corporation or by the bank that controls it, in the foreign state; and those sections shall be read as if, wherever the words "client of the licensed corporation" appear, there were substituted the words "client as referred to in section 10b(b)"; in this subsection, "foreign bank" – a bank in a foreign state holding a licence to operate as a foreign bank in Israel, under the Banking (Licensing) Law.
Application of Provisions to a Registered Foreign Practitioner§
10c.
The provisions of Chapter III, other than section 13, as well as the provisions of Chapter IV and section 25, shall apply, with the necessary modifications, to a foreign practitioner in respect of whom the conditions referred to in section 10b are fulfilled (in this Section – a registered foreign practitioner), as if that practitioner were a licence holder.
Agreement between the Licensed Corporation and Its Client§
10d.
In the agreement between the licensed corporation and its client, the licensed corporation shall expressly state, in addition to what is set out in section 13, the services in respect of which it has entered into an agreement with the registered foreign practitioner as referred to in section 10b, which are to be provided by the foreign practitioner under the provisions of this Chapter, as well as the financial assets and securities in respect of which the said services are to be provided.
Civil Liability of the Licensed Corporation for the Acts of the Foreign Practitioner§
10e.
Without derogating from the liability of the foreign practitioner, the licensed corporation shall bear civil liability for the acts of the foreign practitioner with whom it has contracted for the purpose of providing services to its clients, and the provisions of this Law shall apply to the licensed corporation in that regard as if it had provided the services to its clients itself; for this purpose, "act" – includes an omission.
Duty of Supervision of the Licensed Corporation over the Acts of the Foreign Practitioner§
10f.
(a)A licensed corporation is obliged to supervise and to do everything possible to prevent a breach of the provisions set out below by the foreign practitioner with whom it has contracted for the provision of services to its clients:
(1)the provisions of section 10b;
(2)the provisions of Chapter III, other than section 13, as well as the provisions of Chapter IV and section 25, as applied to the foreign practitioner under section 10c.
(b)Where the foreign practitioner has breached a provision from among the provisions set out in subsection (a), it shall be presumed that the licensed corporation has breached its duty under that subsection, and its penalty shall be as set out below, as the case may be, unless it proves that it did everything possible to fulfil the said duty:
(1)in respect of a breach of the provisions of section 10b, as referred to in subsection (a)(1) – a penalty as referred to in section 39(a);
(2)in respect of a breach of a provision from among the provisions set out in subsection (a)(2) – an enforcement measure under Chapter VII-B or a penalty under Chapter VIII, as the case may be, that could have been imposed on the licensed corporation had it breached the provision itself.
Notice to the Authority and to Clients upon Cessation of Activity§
10g.
Where a condition from among the conditions listed in section 10b ceases to be fulfilled, the licensed corporation shall immediately give notice to the Authority and to its clients of the cessation of the activity of the foreign practitioner within it; the provisions of sections 27(f) and 27a shall apply to a notice under this section.
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Contact Us →Section C: Registry of Foreign Practitioners
Registration in the Registry of Foreign Practitioners§
10h.
(a)A foreign practitioner and a licensed corporation seeking to be registered in the Registry of Foreign Practitioners under the provisions of Section B shall submit an application for registration as aforesaid to the Authority; in an application under this subsection the applicant shall include the address in Israel of the foreign practitioner for the service of process, and shall attach to it documents and certificates attesting to the fulfilment of the conditions prescribed in section 10b, including, inter alia, the foreign permit and the agreement between the foreign practitioner and the licensed corporation.
(b)The Minister of Finance may, on the proposal of the Authority or in consultation with it, prescribe provisions regarding the management of the Registry of Foreign Practitioners and the manner of registration therein, including the particulars to be included in an application under subsection (a) and the certificates and documents to be attached to it.
(c)Where the Authority finds that the conditions prescribed in section 10b are fulfilled in respect of a foreign practitioner or a licensed corporation, it shall register that person in the Registry of Foreign Practitioners; the Registry of Foreign Practitioners shall be open for public inspection and shall be published on the Authority's website.
(d)The registration of a foreign practitioner or a licensed corporation in the Registry of Foreign Practitioners does not constitute authentication of the particulars appearing in the registry, nor evidence that the foreign practitioner or the licensed corporation, as the case may be, complies with the requirements of this Law.
Deletion from the Registry of Foreign Practitioners§
10i.
Where the Authority finds that a condition from among the conditions listed in section 10b has ceased to be fulfilled in respect of a foreign practitioner or a licensed corporation registered in the Registry of Foreign Practitioners, it may delete that person from the Registry of Foreign Practitioners.
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Contact Us →Chapter III: Duties of Loyalty and Care of an Investment Adviser, an Investment Marketer and a Portfolio Manager
Duties of Loyalty§
11.
(a)A licence holder shall act for the benefit of clients in good faith and with diligence, shall not prefer personal interests or the interests of another over the interests of clients, and shall not prefer the interests of one client over those of another client.
(b)The giving of consent by a client, whether in advance, whether in writing, whether orally, whether in relation to a specific transaction or whether in relation to categories of transactions, shall not exempt a licence holder from the duties under this Chapter, unless expressly provided otherwise in this Law.
Adaptation of Service to the Needs of the Client§
12.
A licence holder shall adapt, as far as possible, the advice or marketing that the licence holder provides to clients or the nature of the transactions executed on their behalf to the needs and instructions of each client, after ascertaining with the client the investment objectives, the financial position of the client including the client's securities and financial assets, and the other circumstances relevant to the matter, to the extent that the client has agreed to provide information in that regard.
Written Agreement§
13.
(a)A licence holder shall enter into a written agreement with a client and shall deliver a copy thereof to the client prior to the commencement of the provision of the service.
(b)The agreement shall include the matters required for the purposes of the engagement, including the following matters:
(1)the identification particulars and data of the client;
(2)the needs and instructions of the client as referred to in section 12;
(3)fees and reimbursement of expenses to be charged to the client and the manner of their calculation;
(4)a provision that the client is entitled to cancel the engagement with the licence holder at any time;
(5)a provision regarding the possibility of providing advice or marketing by telephone or the absence of such possibility;
(6)a provision that the client is aware that the duty of confidentiality imposed on the licence holder is subject to the licence holder's duty to provide information under any law;
(7)in respect of a licence holder who is an exchange member – a provision that the client is aware that the agreement is subject to the obligations of an exchange member in accordance with the exchange's articles under the Securities Law.
(8)(Repealed)
(c)An agreement between a portfolio manager and a client shall also include the following:
(1)a power of attorney specifying the scope of the authority and discretion conferred on the portfolio manager, including a statement of the manner in which the investment portfolio is to be managed, whether by blind trust or otherwise;
(2)the possibility of obtaining credit for the client and its conditions, or the absence of such possibility;
(3)provisions regarding the categories of securities and financial assets to be included in the investment portfolio and the proportion of each category relative to the value of the portfolio, or a provision that these shall be determined at the discretion of the portfolio manager;
(4)authority to purchase securities, options or futures contracts at a price exceeding the exchange price known at the time of purchase, as well as authority to sell those assets at a price below the exchange price known at the time of sale, or the non-granting of authority to purchase or sell as aforesaid.
(5)in respect of a portfolio manager that is a corporation affiliated with an institutional body or with a marketer, and in respect of a portfolio manager engaged in investment marketing – the particulars that are to be brought to the client's attention under section 16a(a).
(c1)An agreement between a marketer and a client shall also include the particulars that are to be brought to the client's attention under section 16a(a).
(d)The particulars under subsection (b)(1) and (2) shall be updated whenever the client gives notice of a change therein; where the client has not given notice of a change in respect of the particulars under subsection (b)(2), the licence holder shall initiate the updating of the particulars at the times and in the manner directed by the Authority under subsection (d1).
(d1)The Authority shall direct, in directions under section 28(b), the times for updating particulars as referred to in subsection (d), the manner of their documentation and the transmission of the documentation to the client; in determining the said times, the Authority shall take into account, inter alia, the nature of the service provided by the licence holder and the nature of the relationship between the licence holder and the client.
(e)An exemption clause in an agreement, exempting a licence holder from liability imposed on the licence holder under this Law or under any other law in respect of the manner of performance of duties, or limiting such liability – is void.
(f)The Minister of Finance, in consultation with the Authority and with the approval of the Finance Committee of the Knesset, may prescribe provisions regarding the manner of drafting an agreement between a licence holder and a client, the form of the agreement and the manner of its delivery to the client, as well as regarding additional matters to be included in such an agreement, generally or by categories of agreements, and may prescribe categories of agreements in which there is no obligation to include a matter from among the matters in subsections (b) or (c).
Fair Disclosure§
14.
(a)An investment adviser or an investment marketer shall disclose to the client, in fair disclosure, all matters that are material to the advice or marketing provided by that adviser or marketer and to the proposed transaction.
(b)Without derogating from the generality of the provisions of subsection (a), the Minister of Finance, in consultation with the Authority, may prescribe matters that shall be deemed material to the advice, marketing or transaction and rules regarding the manner of fair disclosure.
Conflict of Interests§
15.
(a)Where a licence holder becomes aware of a conflict of interests between the licence holder or the licensed corporation in which the licence holder works or is a partner, and the client, whether in the provision of a service to that client generally or in respect of a specific transaction, the licence holder is obliged to notify the client, in writing or by telephone in a conversation recorded by the licence holder, of the existence of the conflict of interests and to refrain from performing any action involving a conflict of interests, unless the client has consented in advance in writing or by telephone, in a conversation recorded by the licence holder, in relation to that specific transaction; the Minister of Finance, in consultation with the Authority and with the approval of the Finance Committee of the Knesset, may prescribe the particulars to be included in the records referred to in this section and the manner of their preparation, retention and delivery to the client.
(b)Without derogating from the generality of the provisions of subsection (a), the Minister of Finance, in consultation with the Authority, may prescribe circumstances that shall be deemed to constitute a conflict of interests.
Prohibition of Preference§
16.
(a)In providing investment advice or in managing investment portfolios, a licence holder shall not prefer securities or financial assets of the licence holder or of a corporation affiliated with the corporation in which the licence holder works or is a partner, by reason of the said affiliation.
(b)A portfolio manager shall not order, on behalf of a client, securities in respect of which a corporation affiliated with the portfolio manager or a corporation affiliated with the corporation in which the portfolio manager works serves as underwriter for their offering, unless the client has given prior written consent; the portfolio manager shall report to the client on an order as aforesaid within 30 days of the date of its execution.
(c)A portfolio manager shall not purchase, on behalf of a client, securities in respect of which a corporation affiliated with the portfolio manager or a corporation affiliated with the corporation in which the portfolio manager works served as underwriter for their offering, for as long as three months have not elapsed from the date of fulfilment of the underwriting commitment, if on that date the underwriter still holds securities it purchased under the underwriting commitment, unless the client has given prior written consent in relation to a specific transaction; where more than three months but less than six months have elapsed from the date of fulfilment of the underwriting commitment, a portfolio manager may purchase securities as aforesaid on behalf of a client if the client has given prior written consent; a portfolio manager shall report to the client on such a purchase within 30 days of the date of its execution; in this subsection, "date of fulfilment of the underwriting commitment" – the date as set out below, as the case may be:
(1)where the underwriter undertook to purchase securities offered pursuant to the prospectus if the public does not purchase them – the date of completion of the sale to the public in the framework of which the underwriter purchased the said securities;
(2)where the underwriter undertook to purchase securities offered pursuant to the prospectus in order to sell them to the public – the date of completion of the sale to the public, by the underwriter, of the said securities.
(d)A purchase as referred to in subsections (b) and (c) shall be executed on the exchange or at a price not exceeding the exchange price known at the time of the purchase.
Fair Disclosure, Conflict of Interests and Preference in Investment Marketing§
16a.
(a)Without derogating from the generality of the provisions of section 14, the following provisions shall also apply in respect of an investment marketer, a portfolio manager that is a corporation affiliated with an institutional body or with a marketer, and a portfolio manager engaged in investment marketing:
(1)each of them shall bring to the attention of clients, at every place where business is conducted and at every other place directed by the Chairperson of the Authority, by means of a prominent and clear sign or in another manner as directed by the Chairperson of the Authority, the fact of their engagement in investment marketing and not in investment advice, or the fact of being a corporation affiliated with an institutional body or with a marketer, as the case may be, as well as the institutional bodies whose financial assets they have a connection to;
(2)each of them shall disclose to the client, in language intelligible to the client, orally and in a written document to be delivered to the client before the engagement, and shall also publish on their website, the matters referred to in paragraph (1), the connection they have to financial assets and its nature, and the fact of their preference for those financial assets; the Minister of Finance, in consultation with the Authority and with the approval of the Finance Committee of the Knesset, may prescribe rules regarding the detail to be given in the document and in the publication on the website under this paragraph, of a connection that is a benefit as referred to in paragraph (2) of the definition of "connection", including the type of benefit, its extent and the manner of its calculation.
(b)Notwithstanding the provisions of sections 11(a) and 16(a), a marketer, a portfolio manager that is a corporation affiliated with an institutional body or with a marketer, and a portfolio manager engaged in investment marketing, may, in the framework of their engagement in investment marketing or in investment portfolio management, as the case may be, prefer a financial asset to which they have a connection over another financial asset that is similar in terms of its suitability to the client to that financial asset and to which they do not have a connection, provided that they have complied with all the disclosure requirements vis-à-vis the client under subsection (a).
(c)A connection of a marketer or of a portfolio manager to a financial asset shall not be regarded as a conflict of interests between that person and the client for the purposes of section 15.
(d)An investment marketer in the media shall include a notice as to whether or not that marketer has a personal interest in the matter, as well as 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.
Prohibition of Incentives§
17.
(a)A licence holder, or another on behalf of or for a licence holder, shall not receive a benefit, directly or indirectly, in connection with investment advice, investment marketing, the execution of a transaction or the refraining from executing a transaction, other than fees and reimbursement of expenses from the client as determined in the agreement under section 13(b)(3).
(b)The provisions of subsection (a) shall not apply to the following:
(1)investment advice, investment marketing, the execution of a transaction or the refraining from executing a transaction, by a licence holder, in securities issued by the licence holder or by a person controlled by the licence holder;
(2)investment marketing, the execution of a transaction or the refraining from executing a transaction, by a marketer licence holder, in financial assets to which the licence holder has a connection;
(3)the receipt of a refund of a purchase or sale commission by a portfolio manager from an exchange member, in respect of a specific transaction or a set of transactions of which the specific transaction forms part, provided that the client on whose behalf the transaction was executed gave prior written consent to the receipt of the refund as aforesaid and to its rate;
(4)the receipt of a distribution commission by a person who is not a marketer from a fund manager or a foreign fund manager as defined in section 113a of the Joint Investments Law, in respect of the execution of a transaction, provided that the client on whose behalf the transaction was executed gave prior written consent to the receipt of the commission and to its rate, and that the distribution commission is in accordance with the provisions under section 82(c) of the Joint Investments Law;
(5)the receipt of a commission by an investment adviser that was paid by a managing company, under the provisions of section 32(e)(2) of the Provident Funds Supervision Law, in respect of the execution of a transaction in a training fund, provided that the client on whose behalf the transaction was executed gave prior written consent to the receipt of the commission and to its rate, and that the rate of the commission is not contingent on the identity of the managing company from which it is received.
(6)
(a)the receipt of a benefit for analytical work (analysis), in special cases and circumstances to be determined by the Authority, provided that the analytical work is accompanied by a disclosure regarding the receipt of the benefit for it; a determination as aforesaid shall be made in a manner that ensures that the benefit is received in a manner that minimises the concern that its receipt will influence the analytical work, and the Authority may consider, inter alia, the following cases and circumstances:
(1)the analytical work relates to securities or financial assets in respect of which the making of an investment decision requires special expertise;
(2)the analytical work relates to a field in which it may contribute to the development of trading on the exchange;
(b)in this paragraph, "analytical work" – a document containing an analysis of securities or financial assets, providing reasoned information or a target price on which a decision regarding the advisability of investing in, holding, purchasing or selling the said securities or financial assets may be based.
(c)An adviser licence holder or a licence holder that is a banking corporation engaged in investment marketing shall not give a benefit to an employee, a branch or a unit, in connection with investment advice, investment marketing, the execution of a transaction or the refraining from executing a transaction, as the case may be, if the benefit is determined having regard to the identity of the body by which the securities that are the subject of the advice, marketing or transaction are issued, or to the identity of the body that has a connection to the financial assets that are the subject of the advice, marketing or transaction.
(d)The calculation of fees and reimbursement of expenses to be charged to a client for investment advice shall be made without regard to the identity of the body in respect of whose issued securities or in respect of whose financial assets to which it has a connection the advice is given, and without regard to the client's payment to such a body.
(e)In this section, "licence holder" – includes one who controls the licence holder or one who is controlled by any of them, as well as an office holder in any of them and one who is employed by any of them.
Prohibition of Investment Advice and Execution of a Transaction in Respect of Certain Financial Assets§
17a.
An investment adviser, or a person engaged in investment advice in the adviser's name, shall not give advice and shall not execute a transaction in a financial asset to which an institutional body holding ten per cent or more of any class of means of control in the adviser has a connection; for this purpose, "institutional body" – includes one who controls it or one who is controlled by any of them.
Restrictions Regarding the Entry by an Investment Adviser into an Exceptional Agreement§
17b.
(a)An investment adviser shall not enter into an agreement with an institutional body for the provision of services that is not in the ordinary course of business of the investment adviser, that is not on market terms, or that may materially affect the profitability, property or liabilities of the investment adviser (in this section – an exceptional agreement), unless the investment adviser has received prior written approval from the chairperson of the Authority, and, if the investment adviser is a banking corporation – also from the Supervisor of Banks.
(b)The receipt of consideration by an investment adviser from an institutional body pursuant to an agreement for the provision of services that is not an exceptional agreement, or pursuant to an exceptional agreement that was approved in accordance with the provisions of subsection (a), constitutes a mode of operation consistent with the duties of an investment adviser under sections 3(a4)(2), 11 and 15.
(c)In this section, "institutional body" and "investment adviser" – include a corporation connected to them.
17c.§
(Repealed — תש״ע־2)
Special Risks§
18.
(a)Where a transaction involves a special risk, the investment adviser or the investment marketer, as the case may be, shall notify the client of the nature of the risk.
(b)A portfolio manager shall not execute on behalf of a client a transaction involving a special risk without the client having given prior written approval for that transaction or for transactions involving the same type of risk.
(c)Without prejudice to the generality of the provisions of subsections (a) and (b), the following transactions shall be regarded as transactions the execution of which involves a special risk:
(1)a transaction in a security in respect of which it was stated in the prospectus that investment therein involves a special risk, for as long as two years have not elapsed from the date of the prospectus, unless the risk referred to as aforesaid no longer exists;
(2)a transaction involving a short sale, within its meaning in section 63 of the Joint Investments Law, and the lending of securities for the purpose of executing such a transaction;
(3)a transaction in a futures contract, an option or a structured product;
(4)any other transaction prescribed for this purpose by the Minister of Finance, after consultation with the Authority and with the approval of the Finance Committee of the Knesset.
Duty of Confidentiality§
19.
(a)Subject to the provisions of any law or agreement in which the client has expressly waived the duty of confidentiality in relation to a person specified in that agreement, a licence holder shall keep confidential information brought to that holder's knowledge by the client, including documents transferred to that holder's possession and their contents, and any other detail relating to activities in respect of which the holder engaged in advice or marketing towards the client or executed on the client's account.
(b)The provisions of the Privacy Protection Law, 5741-1981, shall apply to the duty of confidentiality under this section, even where the aggrieved party is a corporation.
Duty of Care§
20.
A licence holder shall conduct that holder's occupation with the care and level of skill that a reasonable licence holder would exercise in similar circumstances, and shall take all reasonable measures to safeguard the interests of that holder's clients.
Prohibition on Advertising of Institutional Bodies by an Investment Adviser§
20a.
An investment adviser shall not advertise, through the media, by circular, by post, electronic mail, facsimile, internet or any other means, that the adviser engages in investment advice in relation to financial assets to which a particular institutional body has a connection.
Restriction on the Use of the Word "Advice" by an Investment Marketer§
20b.
An investment marketer, a portfolio manager that is a corporation connected to an institutional body or to a marketer, and a portfolio manager who engages in investment marketing, shall not use the word "advice" or any word derived therefrom, in the name under which they conduct their business or in any publication on their behalf.
Duty of a Licence Holder to Fulfil the Conditions Regarding Insurance, Equity, Bank Guarantee, Deposit and Securities§
20c.
(a)An authorised corporation shall not engage in the occupation that is the subject of the licence at a time when it does not fulfil the conditions and amounts prescribed in respect of insurance, equity, bank guarantee, deposit or securities, under section 7(b)(3) or (c)(3) or (4), or under section 8(b)(4) or (5), as the case may be.
(b)An individual licence holder shall not engage in the occupation that is the subject of the licence at a time when that holder does not fulfil the conditions, amounts and rates to be prescribed by the Minister of Finance, after consultation with the Authority and with the approval of the Finance Committee of the Knesset, in respect of insurance to cover the liability of the licence holder in respect of a negligent act or omission towards a client.
Prohibition on Additional Occupations§
20d.
(a)A licensed company shall not engage in underwriting.
(b)A company holding a portfolio manager's licence shall not engage in any additional occupation other than those listed in section 8(b)(1).
Liability of an Individual Licence Holder§
21.
Engaging in an occupation within the framework of a corporation shall not derogate from the application of the provisions of this Law to an individual licence holder acting on behalf of the corporation.
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