Joint Investments in Trust Law, 5754-1994

In this Law –

"distribution site" – a website of the Authority open to public inspection, on which reports and prospectuses submitted to the Authority are displayed, by a fund manager or trustee as defined in section 4;

"exchange" – an exchange in Israel, and an exchange outside Israel that has received approval from a person authorised to grant it under the law of the state in which it operates;

"exchange in Israel" – an exchange as defined in the Securities Law;

"court" – (deleted);

"bank in Israel" – a bank as defined in the Banking Law;

"bank outside Israel" – a corporation incorporated in a foreign state, in respect of which both of the following apply:

"external director" – as defined in the Companies Law;

"directive" – of the Authority or of the Chairperson of the Authority – including a demand made by them;

"special resolution of unit holders" – a resolution passed at a general meeting of the unit holders, as required under this Law, in which both of the following conditions are met:

"company" – as defined in the Companies Law or a foreign company registered under section 346 of that Law;

"management company" and "provident fund" – as defined in the Financial Services Supervision Law (Provident Funds), 5765-2005;

"Commissioner" – (deleted);

"affiliated company of a fund" – (deleted);

"foreign company" – as defined in the Companies Law;

"registration company" – as defined in the Securities Law;

"Banking Law" – Banking Law (Licensing), 5741-1981;

"Companies Law" – Companies Law, 5759-1999;

"Foreign Currency Law" – Foreign Currency Control Law, 5738-1978;

"Law for the Promotion of Competition and Reduction of Concentration" – Law for the Promotion of Competition and Reduction of Concentration, 5774-2013;

"Securities Law" – Securities Law, 5728-1968;

"price calculation day" – a day in respect of which, pursuant to section 46(e) or section 129c(3), a manager of an open-ended fund is required to calculate the purchase price and the sale price of the fund's assets;

"business day" – any day of the week on which the majority of holders of a bank licence under the Banking Law are open for business, unless it is the eve of a day of rest as defined in the Law and Administration Ordinance, 5708-1948;

"units" – as defined in section 3(b);

"foreign currency" – a currency that is legal tender in any state and is not Israeli currency;

"clearing house" – as defined in section 44ae of the Securities Law;

"distributor" – a member of an exchange through whom orders for units may be submitted;

"office holder" – a senior office holder as defined in the Securities Law, and also, in relation to a fund manager – a member of an investment committee as defined in section 20(a), and in relation to a trustee – a person appointed within the trustee to perform the trustee's duties and functions as referred to in section 78;

"securities" – as defined in the Securities Law, including securities issued by the State;

"foreign securities" – securities traded on an exchange outside Israel or on a regulated market outside Israel, or shares or units of a fund registered outside Israel;

"personal interest" – as defined in the Companies Law;

"coordinated transaction" – a transaction effected on an exchange in Israel whose terms were agreed upon in advance by the parties thereto;

"Companies Ordinance" – Companies Ordinance [New Version], 5743-1983;

"newspaper publication" – publication in at least two daily newspapers with wide circulation, published in Israel in the Hebrew language, at least one of which is a widely-circulated newspaper as defined in section 1a of the Planning and Building Law, 5725-1965; in relation to a fund approved for non-residents only, publication in at least one such widely-circulated newspaper and publication in at least one daily newspaper published in Israel in the English language;

"provident fund" – (deleted);

"relative" – as defined in the Companies Law;

"fund" – a joint investment fund in trust, as defined in section 3;

"high-technology fund" – a closed-ended fund whose fund agreement provides that it shall be a high-technology fund;

"foreign fund" – (deleted);

"special fund" – a closed-ended fund whose fund agreement provides that it shall be a special fund;

"money market fund" – a fund in respect of which both of the following apply:

"index-tracking fund" – a fund whose investment policy is aimed at achieving results derived from the rate of change in the price of an index or commodity;

"exchange-traded fund" – an index-tracking fund that is a closed-ended fund, whose fund agreement provides that it shall be an exchange-traded fund;

"open-ended fund" – a fund whose fund agreement provides that it shall be an open-ended fund;

"closed-ended fund" – a fund whose fund agreement provides that it shall be a closed-ended fund;

"restricted fund", "unrestricted fund" – (deleted);

"net asset value of a fund" – the value of the fund's assets less its liabilities;

"regulated market" – a system through which trading in securities, options or futures contracts is conducted, pursuant to rules set by a person authorised to set them under the law of the state in which it operates;

"financial year of a fund" – a period of 12 months designated by the fund manager in the prospectus or in a report as the financial year of the fund, or a shorter period so designated by the fund manager, if it is the first financial year of a new fund or the first financial year after the fund manager has changed the financial year of the fund;

"interested party", "equity capital", "holding", "the Authority", "affiliated company", "misleading detail", "control" – as defined in the Securities Law;

"public director" and "foreign company" – (deleted);

"licence holder", "investment adviser" and "portfolio manager" – as defined in the Regulation of Investment Advising and Portfolio Management Law, 5755-1995 (hereinafter – the Regulation of Occupation Law).

The fund agreement shall be made between a company approved as a trustee under section 9, to whom the assets of the fund shall be conveyed (hereinafter – the trustee), and another company approved as a fund manager under section 13, which shall manage the assets of the fund (hereinafter – the fund manager).

(biad) .

"business relationship" – a relationship between a supplier and a customer, a relationship between a service provider and a service recipient, the granting or receipt of loans, leasing of assets, business partnership, joint transactions, partnership in assets or any other commercial or economic relationship, whether directly or indirectly, whether on a permanent basis or on a one-time basis, excluding a relationship as aforesaid arising from the provision of the following services:

"material business relationship" – a business relationship, including a business relationship arising from the provision of standard banking services, from which the total revenues, together with the revenues from all business relationships of the company's group with the fund manager's group, exceed five percent of the total revenues of the company's group;

"revenues" – total revenues according to the most recent annual financial statements;

"overall business relationship" – a business relationship, including a business relationship arising from the provision of services as referred to in paragraphs (1) and (2) of the definition of "business relationship";

"company's group" – the company, a person controlling the company and a corporation controlled by such a person;

"fund manager's group" – the fund manager, a person controlling the fund manager and a corporation controlled by such a person.

"provision of economic law" – a provision of any of the laws listed in the definition of "offence";

"monetary liability as an alternative to criminal proceedings" – as defined in section 260(a) of the Companies Law;

"offence" – an offence under any of the laws listed below, excluding an offence the penalty for which is a fine only: this Law; Anti-Money Laundering Law, 5760-2000; Securities Law; Regulation of Occupation Law; Companies Ordinance; Companies Law; Banking Law; Banking Ordinance, 1941; Banking Law (Customer Service), 5741-1981; Income Tax Ordinance [New Version]; Real Property Taxation Law (Appreciation and Acquisition), 5723-1963; Value Added Tax Law, 5736-1975; Customs Ordinance; Trade Levies and Safeguard Measures Law, 5751-1991; Economic Competition Law, 5748-1988; Financial Services Supervision Law (Insurance), 5741-1981; Financial Services Supervision Law (Pension Counselling, Marketing and Clearing System), 5765-2005; Financial Services Supervision Law (Provident Funds), 5765-2005, or a moral turpitude offence;

"moral turpitude offence" – any other offence which, by reason of its nature, gravity or circumstances, renders a person convicted thereof unfit to hold a position in a fund manager or in a trustee, as the case may be, or to hold means of control in a fund manager, including an offence under foreign law and including a disciplinary offence.

The validity of an approval granted to a company to serve as trustee shall lapse after one year during which it did not serve as trustee.