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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Chapter III: Prospectus of a Fund and Permit for its Publication
24.§
(Repealed — תיקון מס' 5, 1999)
Offer of Units and Allotment of Units pursuant to a Prospectus§
25.
(a)A public offer of units shall be made pursuant to a prospectus whose publication the Authority has permitted.
(b)Subsection (a) shall not apply to:
(1)the allotment of bonus units as referred to in section 58;
(2)an offer of units of a closed-ended fund in the course of trading therein on the exchange;
(3)an offer of units to investors whose number does not exceed the number prescribed in Regulations under section 15a(a)(1) of the Securities Law, provided that the number of investors to whom the offeror sells units in the offer or sale referred to, together with the number of investors to whom units were sold during the 12 months preceding that offer or sale, does not exceed the prescribed number; in counting the investors for this purpose, investors listed in section 15a(b)(1) and (2) of that Law shall not be taken into account.
(c)The Authority may exempt from the application of subsection (a) –
(1)an offer of units of a closed-ended fund by a liquidator, receiver, estate administrator or guardian; where such an exemption is granted, the procedures for offering the units shall be determined by the court hearing the liquidation, receivership, estate or guardianship proceedings, as the case may be;
(2)a person offering units of a closed-ended fund who is not the fund manager, subject to conditions it prescribes.
(c1)The provisions of subsection (a) shall also apply to the allotment of units of a closed-ended fund to the fund pursuant to section 57(b), and an allotment of units as aforesaid that is made during the period for submitting orders for units offered in the prospectus, as referred to in section 32(a)(3), shall be deemed an allotment made pursuant to a prospectus.
(d)(Repealed).
Particulars of a Prospectus§
26.
(a)A prospectus of a fund shall include every particular that the Minister of Finance has prescribed in Regulations as being required to be included therein, as well as any other particular that may be of importance to a reasonable investor considering the purchase of the units offered pursuant thereto.
(b)(Repealed).
(c)Regulations under subsection (a) may relate, inter alia, to the following matters:
(1)the structure and form of the prospectus;
(2)the financial statements of the fund, the degree of their detail and the accounting principles for their preparation;
(3)the matters and particulars to which the auditor's opinion on the statements referred to in paragraph (2) shall relate, and the form of the opinion.
(c1)The Authority may prescribe in rules additional particulars to be included in the prospectus of an index-tracking fund.
(d)(Repealed).
(e)(Repealed).
(f)(Repealed).
Directives of the Authority regarding Particulars of the Prospectus§
27.
(a)The Authority may direct a fund manager to include in the fund's prospectus the matters listed below, if it is of the opinion that in the circumstances of the case they are of importance to a reasonable investor considering the purchase of the units offered:
(1)an additional particular beyond those brought in the prospectus, or additional detail beyond that required by Regulations or rules under section 26 or section 129c(1);
(2)a report or expert opinion relating to a matter connected with a particular in the prospectus;
(3)other reports or opinions, in addition to a report or opinion brought in the prospectus;
(4)financial statements, an opinion or a review by the auditor who audited or reviewed them, or by another auditor, in place of those brought in the prospectus, if in its opinion they were not prepared in accordance with generally accepted accounting principles and accepted reporting standards and do not adequately reflect the state of the fund's business, provided that the fund manager has been given an adequate opportunity to present its arguments.
(b)The Authority may direct a fund manager that a particular brought in the prospectus be given special prominence in a manner it directs.
(c)(Repealed).
Duty to Provide Explanations§
28.
A fund manager is required to furnish the Authority in writing, upon the demand of the Chairperson of the Authority or an employee whom the Chairperson has authorised for that purpose, with explanations, particulars, information and documents in connection with the prospectus and the particulars included therein, within a period to be determined by them.
Permit for Publication of a Prospectus§
29.
(a)
(1)The procedures for the examination of a prospectus of a fund, generally or for types of funds, shall be determined by the Authority with the approval of the Minister of Finance, and shall be published in Reshumot (Official Gazette);
(2)The Authority shall give notice of the examination procedures approved by the Minister of Finance to the Finance Committee of the Knesset, and they shall be published in Reshumot (Official Gazette) after fourteen days from the date of such notice, unless by that time a demand has been made by a member of the Finance Committee of the Knesset to annul them; where such a demand has been made, the Committee shall deliberate thereon and the examination procedures shall be published in Reshumot (Official Gazette) after thirty days from the date of the demand, if the Committee has not annulled them.
(b)The Authority shall grant a permit for the publication of a prospectus if it is satisfied that the provisions of this Law and the directives of the Authority thereunder have been complied with, and that all permits required by law to be obtained prior to the publication of a prospectus have been granted; for this purpose the Authority may adopt such examination procedure as appears to it to be appropriate from among the examination procedures prescribed under subsection (a).
(b1)
(1)Notwithstanding the provision of subsection (b), the Authority may, after having given the fund manager an opportunity to present its arguments, refuse to grant a permit for the publication of a prospectus, on grounds by reason of which the Chairperson of the Authority is entitled to order the rectification of a defect as referred to in section 15(a), or if circumstances have arisen by reason of which the Authority is entitled to apply to the court for the winding up of the fund as referred to in section 104(a);
(2)Where the Authority finds, after having given the fund manager an opportunity to present its arguments, that grounds as referred to in paragraph (1) exist and considers that the defect is capable of rectification, it shall order its rectification within a period it prescribes; if the defect has not been rectified to the satisfaction of the Authority, the Authority shall notify the fund manager as soon as possible, by a reasoned notice, of its refusal to grant a permit for the publication of a prospectus.
(c)A permit granted by the Authority does not constitute verification of the particulars brought in the prospectus, or approval of their reliability or completeness, or the expression of an opinion on the quality of the units offered.
(d)The provision of subsection (c) shall be written in the prospectus verbatim.
(e)The procedures for handling applications for a permit to publish a prospectus of a fund, generally or for types of funds, shall be determined by the Authority with the approval of the Minister of Finance, and shall be published in Reshumot (Official Gazette).
(f)(Repealed).
Approval of the Prospectus and Signing thereof§
30.
(a)A draft prospectus of a fund submitted to the Authority shall be signed by the trustee and by the fund manager.
(b)A prospectus of a fund submitted to the Authority for the purpose of obtaining a permit for its publication shall be signed by the trustee, the fund manager and all the directors of the fund manager; however, if the board of directors of the fund manager has approved the prospectus, it is sufficient that the prospectus be signed by the trustee, the fund manager and a majority of the directors of the fund manager, including at least one who is an external director.
(c)Where the name of a person who has undertaken to purchase the offered units of a closed-ended fund, all or some of them, to the extent that they are not purchased by the public, is included in the prospectus, that person shall also sign the prospectus.
(d)Where units of a closed-ended fund are offered by a person other than the fund manager, the offeror shall also sign the prospectus.
(e)A director's signature on a prospectus shall be made by the director personally or by a person whom the director has authorised in writing to sign that prospectus on the director's behalf.
(f)The provisions of section 22(e) and (f) of the Securities Law shall apply to the prospectus of every fund, and to the prospectus of a closed-ended fund the provisions of section 22(c) and (d) of that Law shall also apply.
Date of the Prospectus and its Publication§
31.
(a)A prospectus shall bear a date (hereinafter – the prospectus date) indicating the commencement of the validity of the prospectus, which shall be no later than fifteen days after the grant of the permit for its publication, unless the Authority has extended the said period.
(b)No later than the first business day after the prospectus date, the fund manager shall publish the prospectus by means of electronic reporting under Chapter VII-A of the Securities Law, as well as a notice in a newspaper regarding the publication of the prospectus on the distribution site and regarding the places at which orders for the offered units may be submitted; such a notice shall also include the front cover of the prospectus as defined in the Regulations or rules made under sections 26, 129c(1) and 131(a); the Authority may direct that additional particulars be included in the notice, in the manner it directs.
(c)A fund manager shall not publish the prospectus unless the Authority's permit for its publication is in its possession, and shall not offer the units to the public until it has complied with the provisions of subsection (b).
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Contact Us →Chapter IV: Orders pursuant to a Prospectus, Amendment of a Prospectus and Changes in a Prospectus
Period for Submitting Orders§
32.
(a)With respect to the period for submitting orders for units offered in a prospectus (hereinafter – the period), the following provisions shall apply:
(1)in an open-ended fund or an exchange-traded fund offering its units to the public for the first time, the period shall commence at the end of seven days from the prospectus date and shall end no later than twelve months after that date;
(2)in an open-ended fund or an exchange-traded fund whose units are already held by the public, the period may commence on the prospectus date, provided that it ends no later than twelve months after that date;
(3)in a closed-ended fund that is not an exchange-traded fund, the period shall commence at the end of seven days from the prospectus date and shall end no later than one month after that date.
(b)The Chairperson of the Authority may, at the request of a fund manager, advance the commencement of the period under subsection (a)(1), or extend the one-month period under subsection (a)(3) by up to six months, if the Chairperson is of the opinion that circumstances exist that justify doing so, and subject to conditions the Chairperson prescribes.
(c)Units shall not be offered to the public before the commencement of the period or after the expiry of the period.
33.§
(Repealed — תיקון מס' 23, 2014)
Report of a Fund Manager§
34.
(a)A manager of an open-ended fund shall submit a report to the Authority and to the exchange regarding the correction of a misleading particular in the prospectus of a fund under its management, immediately upon becoming aware of the existence of the misleading particular, and shall immediately publish the report in a newspaper.
(b)If the Authority considers that the prospectus does not include a matter that may be of importance to a reasonable investor considering whether to purchase or redeem a unit, or that a misleading particular has been included in a published prospectus, or that an event has occurred that may be of importance to a reasonable investor considering whether to purchase or redeem a unit and the fund manager has not submitted a report thereon or has not published it in a newspaper, the Authority, or an employee authorised by it for that purpose, may, after having given the fund manager an adequate opportunity to present its arguments, direct the fund manager to submit a report thereon within a period to be determined by them and to publish it immediately in a newspaper; the submission of a report and its publication in a newspaper shall not derogate from any liability under law.
(c)(Repealed).
Amendment of a Prospectus of a Closed-ended Fund§
35.
(a)The provisions of sections 25, 25a, 25b and 26(a) of the Securities Law shall apply, with the necessary modifications, to the prospectus of a closed-ended fund and to a manager of a closed-ended fund.
(b)(Repealed).
Correction of a Clerical Error in a Prospectus§
36.
With respect to the correction of a clerical error in a prospectus, the provisions of section 25c of the Securities Law shall apply, with the necessary modifications.
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Contact Us →Chapter V: Liability for a Prospectus
Liability of Prospectus Signatories§
37.
(a)A person who signed a prospectus under section 30 is liable to those who purchased or redeemed units and to those who bought or sold units of a closed-ended fund in the course of trading on the exchange or outside it, for damage caused to them by reason of a misleading particular in the prospectus.
(b)The limitation period for a right of action under subsection (a) in respect of which no legal proceedings have been instituted is two years from the date of the transaction or seven years from the prospectus date, whichever is earlier.
(c)For the purpose of subsection (a), a director of a fund manager who held office on the day on which the board of directors approved the prospectus shall be deemed to have signed the prospectus, unless that director proves one of the following:
(1)the director did not know and was not required to know, or could not have known, of the publication of the prospectus;
(2)immediately upon becoming aware of the existence of a misleading particular in the prospectus, the director gave a reasoned written notice thereof to the Authority and to the fund manager.
(d)Nothing in subsection (c) shall derogate from the provisions of section 39.
Liability of Experts§
38.
A person who gave an opinion, report, review or certificate that was included or mentioned in a prospectus with that person's prior consent shall be liable as provided in section 37(a) for damage caused by reason of a misleading particular in the opinion, report, review or certificate given by that person, and the limitation period for the purpose of this section shall be as provided in section 37(b).
Exemption from Liability§
39.
Liability under sections 37 and 38 shall not apply –
(1)to a person who proves that all appropriate measures were taken to ensure that there would be no misleading particular in the prospectus, the opinion, the report or the certificate, as the case may be, and that that person believed in good faith that it contained no misleading particular;
(2)as against a person who is proved to have purchased, redeemed, bought or sold units as referred to in section 37(a) at a time when that person knew or was required to know that there was a misleading particular in the prospectus, the opinion, the report or the certificate, as the case may be;
(3)once a fund manager has submitted to the Authority and to the exchange a report in which the misleading particular was corrected and has published the report in a newspaper as aforesaid, and all this as against a person who is proved to have purchased, redeemed, bought or sold units in the fund as referred to in section 37(a) after the said publication in a newspaper;
(4)to a person who signed the prospectus under section 30, to a person deemed to have signed the prospectus under section 37(c), and to a person who gave an opinion, report or certificate as referred to in section 38, after twenty-four hours have elapsed from the time that person notified the fund manager of the correction of the misleading particular.
Liability of Multiple Persons§
40.
Where two or more persons are liable under sections 37 or 38, they are jointly and severally liable to the injured party, and with respect to liability among themselves – the rules applicable to liability in torts shall apply.
41.§
(Repealed — תיקון מס' 23, 2014)
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