The Capital Market
Providing legal advice in the field of capital market requires wide knowledge of the Israeli legal system and practice.
Legal advice focuses primarily on the following Laws:
1.The Companies Act, 5759-1999: law that regulates the organs of the company: General Meeting> Board of Directors> Executive Manager, and the method of establishing a private company and a public company.
2.The Securities Law, 5728-1968: a law that regulates the disclosure obligations of reporting entities through two mechanisms: One is the primary market: disclosure is made through a prospectus. The second is the secondary market: disclosure is made through three types of reports: a periodic report (also known as "Annual Report"); a financial interim report (also known as "Quarterly Report"), and an immediate report.
3. Joint Investment Trust Law, 5754-1994: a law that regulates the entities that manage mutual funds and the way funds are managed by two companies: one of which is the fund manager, and the other - the trustee.
4.Regulation of Investment Advice, Investment Marketing and Portfolio Management Law, 5755-1995: this Act regulates receiving various licenses in Israel and the activities and the disciplinary rules of investment advisors and portfolio managers. The law emphasizes the duty to always see the benefit of the client and to promote his interests, to avoid conflicts of interest, and to act according to the fiduciary duty.
5.Anti Money Laundering Order, 5771-2000 and the orders that apply to portfolio managers and members of the Tel-Aviv Stock Exchange: the orders require acting according to the KYC rule: Know Your Customer. The orders direct portfolio managers to meet their clients face to face, checking the source of the money, and reporting to the Anti-Money Laundering Authority regarding any unusual activity.
6.Law Regulating the Activity of Credit Rating Companies, 5774-1994: a new law that regulates the registration procedures of credit rating agencies in Israel such as MAALOT and MIDROOG, the manner of determining their evaluation methods, prohibition on any misleading detail in their reports, the regulation of conflicts of interest and the independence of rating procedures.
Beyond understanding the provisions of the law, inclusing its limitations and stipulatioins, legal advisors must be familiar with customary practices in their dealings with the Israel Securities Authority (ISA), with reporting entities and with portfolio managers and investment houses. These issues are reviewed on this site.