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Jun 26, 2019

Client Update | Investment Tech | General Investment Advising Regulation

The Israeli Securities Authority ("ISA") has published a draft for the public’s comments regarding the Regulation of Investment Advice, Investment Marketing and Portfolio Management Law (Amendment) (General Investment Advising) Bill (the "Draft Bill ").
 
Background:

In Israel, unlike other jurisdictions, there is no distinction between personal investment advice, which is tailored to the client’s needs, and general investment advice, which is provided to a number of clients, or in the case of investment analysis, that is distributed to the public. These activities, are subject to the Investment Advice, Investment Marketing and Portfolio Management Law 5755-1995 (the "Investment Advice Law"), and in general require the obtaining of an investment advising license in order to engage with clients.

The Draft Bill is intended to remove the existing barriers under the Investment Advice Law, as a response to the renewed consumption habits of the investment advice, in light of the expansion of the FinTech industry into this area, as well as to regulate the investment analysis practice separately.  

Subject to the Bill Draft being approved by the Knesset (the Israel’s Parliament), the Investment Advice Law will include three types of investment advice providers:

1. Investment advising licensees - who provide personal investment advice;
2. Analysts employed by "Supervised Bodies", as defined in the Draft Bill, who will be subject to registration. In addition, the analysts’ employers will be required to ensure their suitability for their position; and
3. General Investment Advisors, to which the obligation to obtain the investment advising license will not apply, as well as most of the provisions set out in the Investment Advice Law.  Such Advisors will be subject to extensive disclosure obligations.

Please do not hesitate to contact us should you wish to comment on the Draft Bill or if you have any questions or require any clarification regarding its implications.

Comments to the Draft Bill can be forwarded to the ISA by July 3, 2019.

For the draft full wording (in Hebrew) - click here>>

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