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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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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Section E: Restrictions on Tenure or Employment of an Employee
Restrictions on Employment§
22.
A fund manager shall not employ in a position involving the making of decisions relating to the management of the investment portfolio of a fund under its management –
(1)an individual who is employed in a position involving the making of decisions relating to the management of the investment portfolio of a fund managed by another fund manager;
(2)an individual who participates in the management of the investment portfolio of the fund manager, or a corporation, whether it or its employee participates in the management of the investment portfolio as aforesaid.
Person Convicted or against Whom an Indictment Has Been Filed§
23.
(a)A director of a fund manager or of a trustee, or an employee of either of them or a member of the investment committee of a fund manager, against whom an indictment has been filed for an offence or who has been convicted of an offence, may be suspended from his office or position by the Authority if an application therefor is made by the Attorney General or by the Chairperson of the Authority, provided that he has been given a reasonable opportunity to present his arguments before the Authority; for this purpose, "offence" – as defined in section 9a, with the necessary modifications.
(b)(Repealed).
(c)For the purposes of this section, a director of a company that controls the fund manager, whose directors serve on the board of directors of the fund manager and constitute a majority thereof, shall be regarded as a director of the fund manager, and a director of a company that controls the trustee, whose directors serve on the board of directors of the trustee and constitute a majority thereof, shall be regarded as a director of the trustee.
(d)(Repealed).
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Contact Us →Chapter II-A: Control and Holding of Means of Control in a Fund Manager and Restriction on Market Share
Definitions§
23a.
In this Chapter –
"total market share" – the aggregate market share of fund managers controlled by a person, and in respect of a person who controls a fund manager together with others, the market share of the fund manager shall be attributed to each of the controllers separately;
"market share", of a fund manager – the proportion of the net asset value of the funds managed by a fund manager out of the net asset value of the assets of all funds managed by all fund managers in Israel, as calculated in accordance with rules prescribed by the Authority and published in Reshumot (Official Gazette);
"offence" – as defined in section 9a, with the necessary modifications.
Control and Holding of Means of Control in a Fund Manager§
23b.
(a)A person shall not hold more than thirty percent of a particular class of means of control in a fund manager, or a lower proportion that confers control of the fund manager, except pursuant to a permit from the Licensing Committee; the Minister of Finance may prescribe by Order, after consultation with the Authority, a proportion lower than thirty percent, provided that it shall not be less than five percent.
(b)The Licensing Committee may refuse to grant a permit under this section only on grounds relating to the trustworthiness of the applicant for the permit or of an office holder therein.
(c)A permit under this section shall not be granted to a person if, after the grant of the permit, his total market share would exceed twenty percent.
(d)The provisions of subsection (a) shall not apply to a person who holds means of control by virtue of a transfer by operation of law.
(e)The provisions of this section shall also apply to the holding of means of control in a fund manager as security for an obligation, except for means of control as aforesaid that are intended in good faith to serve as security for an obligation in the hands of a banking corporation and whose proportion in a securities account of any customer does not exceed 0.001% of that class of means of control.
Duty to Notify the Authority of a Trustworthiness Defect§
23b1.
If one of the circumstances set out below has arisen with respect to a person who holds means of control in a fund manager at a proportion requiring a permit under section 23b, or with respect to an office holder therein, the holder shall notify the Authority immediately upon becoming aware thereof:
(1)any of the circumstances set out in paragraphs (1) to (6) of section 9a(a);
(2)in respect of a holder that is a corporation – a winding-up order has been made against it or a receiver has been appointed over its assets or a material part thereof due to non-payment of a debt, and in respect of a holder who is an individual – a receiving order has been made against him in bankruptcy proceedings or he has been declared legally incompetent.
Prohibition on a Significant Real Corporation from Controlling and Holding Means of Control in a Fund Manager that is a Significant Financial Body§
23b2.
(a)In this section –
"financial body" and "real corporation" – as defined in section 28 of the Law for the Promotion of Competition and Reduction of Concentration;
"significant financial body" – a financial body in respect of which one of the following applies:
(1)it is listed on the list of significant financial bodies;
(2)what is stated in section 29(a)(1) of the Law for the Promotion of Competition and Reduction of Concentration applies to it, even if it is not listed on the list of significant financial bodies;
"list of significant financial bodies" – the list of significant financial bodies published pursuant to section 29 of the Law for the Promotion of Competition and Reduction of Concentration;
"list of significant real corporations" – the list of significant real corporations published pursuant to section 30 of the Law for the Promotion of Competition and Reduction of Concentration;
"controls", in a real corporation – including a holder of a controlling block as defined in the Companies Law, in a real corporation that has no other controlling shareholder;
"significant real corporation" – a real corporation in respect of which one of the following applies:
(1)it is listed on the list of significant real corporations;
(2)what is stated in section 30(a)(1) of the Law for the Promotion of Competition and Reduction of Concentration applies to it, even if it is not listed on the list of significant real corporations; however, for this purpose, the power vested in the Commissioner of Competition in the latter part of the definition "determining sales turnover" in section 30(e) of that Law shall be vested in the Chairperson of the Authority;
(3)what is stated in section 30(a)(2) of the Law for the Promotion of Competition and Reduction of Concentration applies to it, even if it is not listed on the list of significant real corporations; however, for this purpose, the power vested in the Committee for the Reduction of Concentration in the latter part of the definition "determining credit" in section 30(e) of that Law shall be vested in the Chairperson of the Authority.
(b)A significant real corporation or a person who controls it shall not control a fund manager that is a significant financial body and shall not hold more than ten percent of a particular class of means of control in such a fund manager; the Minister of Finance may, on the proposal of the Authority or after consultation with it, prescribe for the purposes of this subsection a proportion lower than ten percent, provided that it shall not be less than five percent; in prescribing the proportion as aforesaid, account shall be taken, inter alia, of the structure of the mutual fund industry.
(c)A person who holds more than five percent of a particular class of means of control in a significant real corporation (in this section – the holder) shall not control a fund manager that is a significant financial body; for the purpose of calculating the proportion of holdings of such a holder, the holdings of the fund manager, financial bodies that control it or are controlled by it, or other financial bodies under the control of the holder shall not be counted; for the purpose of calculating the determining sales turnover and the determining credit of the real corporation pursuant to section 30 of the Law for the Promotion of Competition and Reduction of Concentration, a real corporation that is not the holder or a corporation that is not a real corporation in which the holder holds more than five percent of the means of control, or a corporation that is not a corporation controlled by such a corporation, shall not be taken into account.
(d)If a significant real corporation or a person who controls it controlled a fund manager that is a significant financial body, or held means of control in such a fund manager, or if a person who holds means of control in a significant real corporation controlled a fund manager that is a significant financial body, in contravention of the provisions of this section, he shall sell the means of control he holds such that he does not hold means of control of any class in excess of the proportion permitted for holding without a permit under this section, and the Chairperson of the Authority may give instructions in this regard, including instructions as referred to in paragraphs (1) to (4) of section 23e(a), with the necessary modifications; the provisions of section 23e(d) and (e) shall apply in this regard, with the necessary modifications; where the Chairperson of the Authority has given instructions pursuant to this subsection, he shall also send notice thereof to the fund manager.
(e)Without derogating from the powers of the Chairperson of the Authority to require information under this Law, he may, for the purpose of implementing this section –
(1)require from a person who controls or holds means of control in excess of the proportions referred to in subsections (b) or (c) in a fund manager, or from a person who applies for a permit under section 23b, information concerning the total value of assets of that person and of every person whose total asset value is taken into account for the purpose of determining a financial body as a significant financial body; for this purpose, "total asset value" – as defined in section 29(d) of the Law for the Promotion of Competition and Reduction of Concentration;
(2)require from a person who controls or holds means of control in excess of the proportions referred to in subsections (b) or (c) in a fund manager that is a significant financial body, or from a person who applies for a permit under section 23b to hold or control such a fund manager, information concerning sales and credit data of that person and of every person whose determining sales turnover or determining credit is taken into account for the purpose of determining a real corporation as a significant real corporation, provided that the Chairperson of the Authority shall not require under this paragraph information concerning credit received by an individual unless he has first required information concerning credit received by the corporations relevant to the matter and has found that this information and the other information in his possession are insufficient for the purpose of implementing this section; for this purpose, "credit", "determining credit" and "determining sales turnover" – as defined in section 30(e) of the Law for the Promotion of Competition and Reduction of Concentration.
Transfer of Means of Control§
23c.
A person who holds means of control in a fund manager shall not transfer them to another, knowing that the transferee requires a permit under section 23b and does not hold such a permit.
Revocation, Modification or Suspension of a Permit§
23d.
(a)If the Chairperson of the Authority finds that a material condition of the permit has ceased to be fulfilled with respect to the holder of a permit, that the holder has breached such a condition, or that circumstances included on the list pursuant to subsection (b) have arisen, indicating a trustworthiness defect on the part of the permit holder or of an office holder therein, and considers that the defect can be remedied, he may direct that it be remedied within a period he shall prescribe; if the defect cannot be remedied, or the period prescribed by the Chairperson has elapsed and the defect has not been remedied, the Licensing Committee may, after giving the permit holder an opportunity to present his arguments, suspend, modify or revoke the permit granted to him under section 23b, by a reasoned decision in writing.
(b)The Authority shall establish a list of circumstances that indicate a trustworthiness defect on the part of a holder of a control permit under section 23b or of an office holder therein; 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, however a change to the list shall not apply to a pending proceeding under this section; notice of the publication of the list and of any change thereto, and their date of commencement, shall be published in Reshumot (Official Gazette).
Directions of the Chairperson of the Authority to a Person who Acted without a Permit§
23e.
(a)If the Chairperson of the Authority sees that a person holds means of control in a fund manager without a permit as referred to in section 23b, he may, after giving that person an opportunity to present his arguments, direct –
(1)that the means of control held by that person, in whole or in part, be sold within a period he shall prescribe, such that he does not hold means of control of any class in excess of the proportion permitted for holding without a permit under section 23b;
(2)that the voting rights or rights to appoint directors by virtue of means of control held by that person without a permit under section 23b shall not be exercised;
(3)that a vote by virtue of means of control held by that person without a permit under section 23b shall not be counted among the votes in that vote;
(4)that the appointment of a director effected by that person be cancelled.
(b)If a person holds means of control in a fund manager by virtue of a transfer by operation of law at a proportion requiring a permit under the provisions of section 23b, the Licensing Committee may, after giving the holder an opportunity to present his arguments, direct him to sell the said means of control, in whole or in part, within a period it shall prescribe, such that he does not hold means of control of any class in excess of the proportion permitted for holding without a permit under section 23b.
(c)Where the Licensing Committee has directed pursuant to the provisions of subsection (b) that means of control be sold, it may give a direction as referred to in subsection (a)(2) to (4), with the necessary modifications.
(d)If the holder does not sell the means of control in accordance with the direction of the Chairperson of the Authority pursuant to subsection (a) or in accordance with the direction of the Licensing Committee pursuant to subsection (b), the court may, on the application of the Authority, appoint a receiver for the sale of the said means of control.
(e)A fund manager shall do its utmost to prevent a person from acting by virtue of means of control held in contravention of the provisions of section 23b.
Reporting on Holdings of Means of Control§
23f.
(a)A person who holds a particular class of means of control in a fund manager at a proportion exceeding twenty percent or the proportion prescribed by the Minister of Finance under section 23b(a), whichever is the lower, shall submit to the fund manager on 1 April of each year and at such other times as the Chairperson of the Authority may prescribe, a report on the holdings of such means of control in his possession, and such other particulars as the Chairperson of the Authority may prescribe, including the following particulars:
(1)in respect of a holder that is a corporation – those who control it, as well as those who hold five percent or more of a particular class of means of control therein;
(2)the person on whose behalf the holder is acting as agent or trustee.
(b)The Chairperson of the Authority may prescribe that a holder of means of control who is subject to a reporting obligation under this section shall also submit the report directly to the Chairperson of the Authority.
(c)The provisions of this section shall also apply to a person who holds means of control in a fund manager as security for an obligation, except for a holder that is a banking corporation.
Restriction on Market Share§
23g.
(a)A fund manager shall not receive into its management a fund from another fund manager, other than from another fund manager that is a company controlling the fund manager or a company under the control of such a company (in this section – another fund manager), whether by agreement or by other means, if its market share would, after receiving the management, exceed twenty percent.
(b)A person shall not control fund managers in such a manner that his total market share exceeds twenty percent by reason of one of the fund managers under his control having received into its management a fund from another fund manager.
(c)If the Chairperson of the Authority sees that a fund manager has received into its management a fund from another fund manager, and after receiving the management its market share, or the total market share of a person who controls it, has exceeded twenty percent, he may, after giving the fund manager and the trustee or that person, as the case may be, an opportunity to present their arguments, direct it to reduce its market share or the total market share, as the case may be, such that it does not exceed twenty percent, all within a period he shall prescribe.
(d)If the period prescribed by the Chairperson of the Authority pursuant to subsection (c) has elapsed and the fund manager or the person to whom the direction was given pursuant to that subsection has not acted in accordance therewith, the court may, on the application of the Authority, direct it to reduce its market share or the total market share, as the case may be, such that it does not exceed twenty percent, all within a period it shall prescribe.
23h.§
(Repealed — תיקון מס' 16, 2010)
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