Update: 2020 Ethic Exam

Update: 2020 Ethic Exam

 

Dear Examinees,

Please find here ISA's updated guidelines regarding the Exam in English. 

Here are some important updates as for the next exam:

 

1. Fraud on the Market 

 The ISA issued a legal paper regarding fraud on the market. This paper includes interpretations about the cases that might be considered "behavior patterns: which are "fraudulently" under Article 54.

Please find herethe original paper (in Hebrew).

 

2. A new Fund: DLF

The new mutual fund: DLF: Recently, ISA approved regulations dealing with public investment in fund of deposits and loans = DLF. The fund offers a solid investment which would be accessible to the public and will serve as a substitute for bank deposit, offering very low rates of return. The DLF will have fixed dates in which the public may purchase and sell units once a week. The fund's name will be: "Karnit (00) DLF, Thuesday".

 

3. Monery Laundering updates

 ISA has replied several questions regarding anti-money laundering policy: 

 

  1. According to ISA'a guidelines, a resident card issued by a municipality can be used as a second verifying certificate. Note that lawyers' card and doctor's certificate cannot be used for identification or verification purposes.

  2. If a person is appointed under a power of attorney, only for purpose of clarifying the customer' needs, than there is no need to identify him face to face, but the portfolio manager must ask for details regarding the connections between him and the customer.

  3. In case the customer wants to open an additional account, there is no need to identify him face to face again, provided that the portfolio manager is convinced that this is the same person.

 

Please read some more instructions here.

 

4.  Advisors' reference 

During June 2015, new ISA regulations came into action, regarding referring clients to portfolio management companies. These guidelines applies specifically to the cases in which the bank's investment advisors direct clients to portfolio management services of the subsidiaries of the bank. For example, an advisor at Bank Hapoalim may direct customers to manage active investment portfolio in "PE'ILIM", which is a subsidiary of Bank Hapoalim (Also "Discount Bank" may direct to "TAFNIT"; Bank Mizrahi-Tefahot to "ETGAR", and the International Bank to "Unique").

ISA determines that if the bank' advisor has no information enabling him to evaluate portfolio management companies, he should not direct a client to a specific company. However, the advisor may direct a client to a company if he has information about it, but he must mention that there are other companies. In addition, the advisor may not be compensated directly or indirectly in respect to the reference.

The guidelines also provide that if an investment advisor knows that the client is interested in a specific portfolio manager, he should not prevent such a contact.

When it comes to referral of an investment marketer, then the marketer may be compensated, provided that the customer agreed in advance.

Please read the guidelines here

 

 

 

 

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