Joint Investments in Trust Law, 5754-1994

In this Chapter –

"supervisory body" – a body whose function, under the laws of the state in which it operates, is to permit the offering of units of a foreign fund to the public in that state;

"units of a foreign fund" – units conferring rights in a foreign fund or shares of a foreign fund, if the foreign fund is a corporation;

"state of origin" – a state in which a permit has been granted by the supervisory body to offer units of a foreign fund;

"foreign fund manager" – a corporation that has been approved by the supervisory body in the state of origin to manage trust funds and to offer them to the public;

"foreign fund" – an arrangement or corporation whose purpose is joint investment in securities and the joint earning of profits from holding them and from any transaction in them, established in a foreign state under the laws of that state; for this purpose, "security" – including an option and a futures contract as defined in section 64(b).

If it becomes known to the Authority, whether by a notification under section 113e or in any other manner, that the conditions referred to in section 113b(a), including any of the conditions prescribed pursuant thereto under section 113c(a)(1), have ceased to be met, or if it becomes known to the Authority that a foreign fund manager has breached a provision applicable to it under sections 113c(a)(2) and 113d(a), the Authority may direct the foreign fund manager to rectify the defect within a period that it shall determine.

The Authority may direct a foreign fund manager, after having given it an adequate opportunity to state its arguments, to cease the offering of units of the foreign fund to the public within a period that it shall determine, upon the occurrence of any of the following:

If the Authority has directed a foreign fund manager to cease the offering of units of the foreign fund to the public in Israel as referred to in section 113g, and the units were listed for trading on an exchange in Israel, the Chairperson of the Authority may direct the exchange to delist the units from trading within a period that he or she shall determine.

The exchange in Israel shall prescribe in its articles rules for the protection of the rights of a holder of units of a foreign fund purchased thereon, in circumstances in which the units have been delisted from trading thereon; for this purpose, "articles" – the articles of the exchange as defined in section 46 of the Securities Law.

If a person has breached a provision of the provisions pursuant to this Law applicable to that person, as set out in the First Schedule (in this Chapter – violator and breach, respectively), the Authority may impose a financial sanction on the violator, and the provisions pursuant to Chapter VIII-C of the Securities Law shall apply in that regard, with the necessary modifications and with the modifications set out in this Chapter.

The Chairperson of the Authority may determine that a person who has breached an identical provision in respect of several funds or in respect of several unit holders shall be regarded as having committed a single breach if the breach was committed on the same day and by reason of the same cause.

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 First Schedule and the Second Schedule, provided that the amount of the financial sanction prescribed in the Second Schedule shall not exceed NIS 2,572,000.

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:

The Authority shall prescribe, for the purposes of this Chapter, a list of acts or omissions that are indicative of the fact that a fund manager or trustee who committed them did not act with the care, integrity and diligence that a reasonable fund manager or trustee 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 pending administrative enforcement proceedings; notice of the publication of the list and of any amendment thereto, and the date of their coming into force, shall be published in Reshumot (Official Gazette).

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 Third Schedule.