Joint Investments in Trust Law, 5754-1994

חוק השקעות משותפות בנאמנות, תשנ"ד-1994

Published: 1994-08-23Consolidated Hebrew text as of 2026-01-01 · Last amended 2026-08-02✓ Amendment status checked against the Knesset legislation record on 2026-09-28

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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.

Part 2

(1)Failed to comply with a provision or requirement as set out below:

(a)a directive of the Authority to change the fund's name, given pursuant to section 6(b);

(b)a directive of the Chairperson of the Authority to remedy a defect, given pursuant to section 15(a);

(c)a directive of the Authority or of an employee authorised by it for that purpose to submit a report or to publish it in a newspaper, given pursuant to sections 34(b), 72(b) or (d) or 78(g);

(d)a directive of the Authority to publish an amendment to a prospectus or an amended prospectus or to include additional particulars therein, given pursuant to section 35(a);

(e)a directive of the Chairperson of the Authority to cease the public offering of units of an open-ended fund or to cease their redemption, given pursuant to section 48(a)(1) or (3), or a directive as aforesaid to cease the public offering of units of an exchange-traded fund or to cease their redemption, given pursuant to section 54b;

(f)a requirement of the Authority or of an employee authorised by it for that purpose, to furnish in writing to the Authority an explanation, particulars, information or documents in connection with particulars contained in a report or a notice under this Law, given pursuant to section 72(c);

(g)a directive of the Authority to publish a correction in respect of a misleading particular that appeared in a publication relating to the fund, given pursuant to section 73(d);

(h)a requirement of the Chairperson of the Authority or of an employee authorised by him for that purpose, to furnish particulars concerning a matter relating to the fund or its management, given pursuant to section 78(h);

(i)a directive of the Authority relating to the modes of operation of a fund manager and a trustee, of an office holder in them or of any person employed by them, in order to ensure the proper management of the fund manager and the trustee and the protection of the interests of the unit holders, given pursuant to section 97(b);

(j)a directive of the Authority concerning the manner in which a fund manager is to maintain data from the fund's books, given pursuant to section 129(b), or a requirement of the Authority or of an employee authorised by it for that purpose to furnish information relating to the fund manager or to the fund or data contained in the fund's books, given pursuant to section 129(b1);

(2)Contravened provisions pursuant to sections 13(c1), 16(a), (a2), (b), (c) or (d), 19(a) or 20(b1) or (b2), concerning the composition of the board of directors of a fund manager or of an investment committee, conditions of eligibility for directors or members of an investment committee of a fund manager, or restrictions on service on the board of directors or on the investment committee of a fund manager;

(3)Failed to transfer the management of the funds to another manager within the period set by the Chairperson of the Authority, contrary to the provisions of section 15(d);

(4)Contravened the provisions of section 16a(2) or (3), concerning the restriction on the tenure of a chief executive officer, the tenure of the chairperson of the board of directors, and the conveyance of the chief executive officer's powers;

(5)Contravened the provisions of section 17 concerning meetings of the board of directors of a fund manager, or contravened the provisions of section 20(c) or (d) concerning meetings of an investment committee;

(6)Contravened the provisions of section 18(2), (4), (5), (5a), (5b) or (8), in that the board of directors of the fund manager failed to discharge a function among its functions under that section for a period not exceeding six months;

(7)Offered units to the public before publishing a notice in a newspaper, contrary to the provisions of section 31(c);

(7a)Sold or redeemed a unit in an open-ended fund at a price other than as required pursuant to section 42(a) to (c), or charged a commission at a rate other than as required pursuant to section 42(d), or sold or redeemed a unit in a closed-ended fund at a price other than as required pursuant to section 50(a) or (c) or 56(b);

(8)Charged a commission from a unit purchaser otherwise than in accordance with provisions pursuant to section 42(e);

(9)Failed to transfer to the fund manager, through the clearing house, the aggregate of orders for units or the aggregate of instructions for redemption received by the distributor, in the manner or at the time prescribed pursuant to section 44(b);

(10)Received payment other than in cash for units of a fund under its management, contrary to the provisions of section 44(c);

(11)Failed to continue offering units of an open-ended fund to the public, contrary to the provisions of section 46(g)(1);

(12)Failed to respond to orders for units at a uniform rate, contrary to the provisions of section 46(h);

(13)Failed on the allotment day of units of a closed-ended fund to carry out the actions enumerated in section 53(a)(1) or (2), or failed to allot the offered fund units in the manner and form specified in the prospectus, contrary to the provisions of section 53(b);

(13a)Allotted units of a closed-ended fund to the fund without consideration, contrary to provisions pursuant to section 57(b)(1);

(13b)Contravened a provision among the provisions prescribed pursuant to section 57(c) concerning the assurance of the tradability of units of a closed-ended fund;

(14)Purchased for a fund under its management or held therein assets otherwise than in accordance with provisions pursuant to section 59 or 65a(a)(1) or pursuant to section 59 as applied by section 129c(3);

(15)Executed a transaction referred to in section 18(6), (7) or (7a) even though the transaction had not been approved in advance by the board of directors or by a committee thereof, contrary to the provisions of section 60;

(15a)Contravened the provisions of section 20a(b)(1) or (2) in that the audit committee it appointed did not deliberate on the internal auditor's work plan or on the means of remedying deficiencies found, or contravened the provisions of section 20a(b)(5) in that the audit committee it appointed did not deliberate on engagement with a trading company;

(15b)Contravened provisions pursuant to section 20a(c) or (d) concerning the composition of an audit committee it appointed and restrictions on service thereon;

(15c)Contravened the provisions of section 20a(g) or (h) concerning the holding of audit committee meetings;

(16)Contravened the provisions of section 61, in that in a fund under its management the value of an asset or class of assets as a proportion of the total net value of the fund's assets deviated, upwards or downwards, from the rate prescribed in the fund's investment policy, and the deviation did not exceed five percent of the net value of the fund's assets, and none of the provisos set out in that section applied;

(17)Contravened the provisions pursuant to section 62 or pursuant to that section as applied by section 129c(3), in that in a fund under its management the proportion of securities of a corporation, the proportion of a security of the listed value for trading, or the proportion of another asset exceeded the maximum rate set by the Minister of Finance or the Authority by a rate not exceeding half of the maximum rate or five percent of the net value of the fund's assets, and none of the provisos set out in that section applied;

(18)Lent securities held in a fund under its management for the purpose of a short-sale transaction or executed a short-sale transaction for a fund under its management, contrary to provisions pursuant to section 63;

(19)Purchased, sold or created an option or a futures contract for a fund under its management, contrary to provisions pursuant to section 64 or pursuant to that section as applied by section 129c(3);

(20)Took credit for a fund under its management, contrary to provisions pursuant to section 65 or pursuant to that section as applied by section 129c(3);

(21)Published matter in connection with the fund, contrary to provisions pursuant to section 73 or pursuant to that section as applied by section 129c(3) and (4);

(21a)Failed to participate or failed to vote at a holders' meeting and in proceedings of a corporation whose issued securities are held in a fund under its management, contrary to Regulations prescribed pursuant to section 77 that the Minister of Finance prescribed in this Schedule;

(22)Failed to submit to the Authority a report in which it stated that in its opinion the system of measures pursuant to section 78(a)(3) was sufficient to ensure what is stated therein, or failed to specify the directives it issued to the fund manager to ensure what is stated therein, contrary to the provisions of section 78(e)(1), or failed to act in connection with such a report in accordance with the provisions of section 78(e)(2);

(23)Failed to instruct the fund manager, in writing, to remedy deficiencies found in the management of the fund, failed to specify in such a directive a time for remedying the deficiencies, or failed to transmit a copy of the directive to the board of directors of the fund manager, contrary to the provisions of section 78(d);

(24)Paid from the fund's assets a trustee's fee or a fund manager's fee otherwise than as prescribed in the fund agreement, in the prospectus or in the report, contrary to the provisions of section 80(a)(1), or paid from the fund's assets commissions and other expenses attendant upon the execution of transactions for the fund otherwise than as detailed in the prospectus or in the report, contrary to the provisions of section 80(a)(2), or the fund manager failed to bear from its own resources the excess expenses deducted from the assets of a fund under its management, contrary to the provisions of section 104a(d);

(25)Charged a unit holder for the expenses of correcting the records maintained by a distributor manager, due to the correction of an error in the unit price or in the redemption price, contrary to the provisions of section 80a;

(26)Paid or charged a commission contrary to provisions pursuant to section 82(c).

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Part 3

(1)Appointed a person who does not satisfy the eligibility conditions prescribed pursuant to section 9(c) to discharge the trustee's duties and functions;

(2)Employed in a position involving the making of decisions concerning the management of a fund's investment portfolio a person who does not hold a portfolio manager's licence, contrary to the provisions of section 13(c)(1);

(2a)Failed to appoint a chairperson of the board of directors, contrary to the provisions of section 16a(1);

(2b)Appointed an external director without having obtained the trustee's approval therefor, as required pursuant to section 16(a1);

(3)Failed to appoint an investment committee, contrary to the provisions of section 20(a);

(3a)Failed to appoint an audit committee, contrary to the provisions of section 20a(a);

(4)Employed in a position involving the making of decisions concerning the management of a fund's investment portfolio a person in respect of whom what is stated in paragraphs (1) or (2) of section 22 applies;

(5)Transferred means of control in a fund manager to a person who does not hold a permit pursuant to section 23b, contrary to the provisions of section 23c;

(6)Offered units to the public, including units or shares of a foreign fund, or allotted units, otherwise than pursuant to a prospectus whose publication the Authority has permitted, contrary to the provisions of section 25(a) or (c1), as the case may be, or without the Authority's approval contrary to provisions pursuant to section 113b(a);

(7)(Repealed);

(8)Refused to distribute units contrary to the provisions of section 44(a);

(9)Failed to transfer to the fund manager's account or to the fund's account, through the clearing house, a sum in cash equal to the unit price, in the manner prescribed pursuant to section 45 or on the day prescribed pursuant to section 46(d), or failed to transfer to the fund's account a sum transferred by a distributor to the fund manager's account, contrary to the provisions of section 45;

(10)Sold or redeemed units of an open-ended fund on days other than those in respect of which it is required to calculate the purchase price and the sale price of the fund's assets, or sold or redeemed units of a fixed-dates fund on dates other than those set in accordance with provisions pursuant to section 47, contrary to provisions pursuant to section 46(a);

(11)Redeemed a unit of an open-ended fund even though it had not received an instruction to do so from the distributor, contrary to the provisions of section 46(b), or failed to redeem a unit of an open-ended fund pursuant to an instruction received from the distributor, in the manner prescribed pursuant to that section, or failed to transfer to the unit holder the amount in respect of the redemption of the unit on the day on which the fund manager transferred from the fund's account to the distributor the said amount, contrary to provisions pursuant to that section;

(12)Failed to transmit to the clearing house an order for a unit or an instruction for the redemption of a unit that it received, at the time prescribed therefor, contrary to provisions pursuant to section 46(c);

(13)Purchased units of a fund affiliated to it, contrary to the provisions of section 49(c);

(14)Failed on the allotment day of units of a closed-ended fund to transfer to the fund's account a sum in cash equal to the price of the units allotted to the subscriber, contrary to the provisions of section 53(a)(3), or failed on that day to transfer to the fund manager's account such a sum in the manner prescribed pursuant to section 53(c);

(15)Failed to redeem a unit of a closed-ended fund, pursuant to a demand by a unit holder, on the redemption date as prescribed in the fund agreement, contrary to the provisions of section 56(a), or failed to redeem such a unit in accordance with the conditions prescribed in the fund agreement pursuant to section 56(c) or (d);

(16)Failed to redeem a unit of a closed-ended fund, pursuant to a demand received from the unit holder, in the manner prescribed pursuant to section 56(a1), or failed to transfer to the unit holder who requested its redemption the amount transferred to it by the fund manager in respect of the unit's redemption on the day on which that amount was transferred to it, contrary to the provisions of that section;

(17)Purchased from among the units of a closed-ended fund, for that fund, or sold units purchased as aforesaid, contrary to provisions pursuant to section 57(a);

(18)Offered a unit without consideration, contrary to the provisions of section 58;

(19)Transferred units otherwise than pursuant to a written demand by a unit holder, contrary to the provisions of section 58a(a), or failed to transfer units pursuant to a written demand by a unit holder in the manner detailed in the prospectus, contrary to the provisions of section 58a;

(20)Contravened the provisions of section 61, in that in a fund under its management the value of an asset or class of assets as a proportion of the total net value of the fund's assets under its management deviated, upwards or downwards, from the rate prescribed in the fund's investment policy, and the deviation exceeded five percent of the net value of the fund's assets, and none of the provisos set out in that section applied;

(21)Contravened the provisions pursuant to section 62 or pursuant to that section as applied by section 129c(3), in that in a fund under its management the proportion of securities of a corporation or the proportion of a security of the listed value for trading or the proportion of another asset exceeded the maximum rate set by the Minister of Finance or the Authority, by a rate exceeding half of the maximum rate or five percent of the net value of the fund's assets, and none of the provisos set out in that section applied;

(22)Purchased for the fund an asset whose proportion at the time of its purchase exceeded the maximum rate prescribed pursuant to section 62(b) or pursuant to that section as applied by section 129c(3), or purchased for the fund an asset or held an asset in the fund otherwise than in accordance with the conditions prescribed pursuant to those sections;

(23)Held units of a fund under its management or held units of a fund for which it serves as trustee, contrary to provisions pursuant to section 68;

(24)Paid in respect of a transaction executed for the fund a commission from the fund's assets otherwise than in accordance with the provisions of section 69;

(25)Failed to deposit cash forming part of the fund's assets in an account at a bank in Israel or at a bank outside Israel, contrary to the provisions of section 76(d);

(26)Failed to discharge its duties or functions pursuant to section 78(a)(1) to (4) and (a1); and for this purpose a repeated breach, or a continuing breach for a period exceeding 45 days, by the fund manager shall be regarded as a breach of the provisions of that section by the trustee, unless the trustee notified the Authority of the breach immediately upon becoming aware of it; for this purpose, "repeated breach", "continuing breach" – as defined in section 52s of the Securities Law as applied by section 114;

(27)Pledged or charged the fund's assets otherwise than for the purpose of performing a transaction for the fund, contrary to the provisions of section 79, or otherwise than in accordance with the conditions set by the Minister of Finance pursuant to that section;

(28)Offered a payment or other benefit in connection with the purchase, redemption, sale or holding of units, contrary to the provisions of section 82(a), or charged a commission in connection with the sale of fund units, their redemption or their holding, contrary to the provisions of section 82(b);

(29)Failed to furnish information or a document contrary to a demand of the Chairperson of the Authority or an employee of the Authority authorised for that purpose, addressed to a supervised entity as defined in the Securities Law, contrary to provisions pursuant to section 97a(b) or contrary to provisions pursuant to section 56a1 of the Securities Law as applied by section 97a(c);

(29a)Failed to appoint an auditor for the fund, contrary to the provisions of section 99(a);

(30)Merged or split funds otherwise than in accordance with the provisions of section 100(a) to (d);

(31)Failed to redeem the fund's units on the liquidation date, contrary to the provisions of section 108(e);

(32)Failed to retain the fund's books for a period of seven years from the conclusion of the liquidation, contrary to the provisions of section 110(3);

(33)Failed to convene a general meeting of the unit holders even though a demand had been made therefor, within the time prescribed therefor, contrary to the provisions of section 111(a)(2), or failed to pay, from its own resources, to those who convened the general meeting the reasonable expenses incurred by them in convening it, contrary to the provisions of section 111(a)(3);

(34)Failed to participate in a general meeting of unit holders, contrary to the provisions of section 111(h);

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