ISA Publishes Temporary Order on Clarification of Clients’ Needs

The ISA published a temporary order for license holders in connection with the clarification of clients’ needs. The temporary order is valid until June 30, 2020.

Performing the clarification of a client’s needs from a distance

• It is possible to conduct the clarification of the client’s needs via telephone call, without necessarily recording the call. However, if the call is not recorded, the RM is obligated to document the call immediately. The documentation will be sent to the client, who will approve orally and in writing (with his signature or an email) that he has received the forms and agrees to their contents.
• In addition, the mandatory requirement that each recorded telephone call be monitored by a “conversation monitor,” who will ascertain that the process was carried out properly and confirm this in writing, is no longer necessary. Discretion as to how the calls are conducted is given to management, provided that the monitoring process is carried out as required by law.

Updating the client’s characteristics and investment policy

• The mandatory guideline that the client requires assessment once every 12 months has been updated to 15 months. If the company’s management decides to act according to said provision, the following considerations should be taken into account:
  (a) prioritizing customer referrals during this period; and
  (b) the RMS’ familiarity with the client’s needs, characteristics, and preferences, provided the RMs, at all times, meet their mandatory obligation to be updated on the clients’ characteristics and needs.
• The Update may be carried out through face-to-face meeting, telephone call, email correspondence, or online internet system that can be retrieved. The Company’s management should verify first that the online system has all the feature needed to conduct the Update through it.

The ISA is taking significant steps to comply with Ministry of Health guidelines. However, it should be noted, the order will remain in place for only three months. The ISA should consider continuing to encourage remote communication and the use of technological means to make the performance of license holders’ obligations easier, regardless of the current crisis.

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Source: barlaw.co.il