Legislative updates for regulated financial service-providers – inception of the Financial Information Service Law

Important updates relating to the Financial Information Service Law have been published in recent days.

Financial Information Service Order – Postponement Order

Due to requests from licensed credit providers and licensed operators of credit brokerage system, who are deemed as information sources pursuant to the Financial Services Law, for a postponement of the inception date of the law, the Capital Market Authority decided to postpone the inception date of the law for licensed credit-providers and licensed operators of credit brokerage systems until May 14, 2025. The reason for the postponement is the need for additional preparation time, mainly due to the complexities of developing technological systems and complying with data security and cybersecurity requirements. Therefore, the law will come into effect on May 14, 2025.

Exemption for small entities and a general exemption (Low Volume of Activity Order and the Exemption Regulations)

According to the Financial Information Service Law, information sources are obligated to allow access to financial information. However, the Minister of Finance may grant a general exemption to particular entities or individual exemptions to small-scale entities, for reasons relating to the cost involved in implementing the provisions of the law or relating to competitive considerations in the financial system.

The Exemption Regulations grant a general exemption from the obligation to provide access to financial information to sources of information that are: (1) institutional entities whose volume of credit activities does not exceed ILS 500 million or that are defined as long-standing funds as defined in the law; (2) licensed credit-providers or licensed operators of credit brokerage systems, whose credit backlog does not exceed ILS 500 million; and (3) licensed deposit and credit service-providers whose credit backlog or deposit backlog does not exceed ILS 500 million.

In addition, according to a Temporary Order in effect until May 28, 2027, the obligation to provide access to financial information will also not apply to licensed credit-providers and licensed operators of credit brokerage systems whose credit backlog does exceed ILS 500 million, provided that the number of their customers does not exceed 1,000 and 8,500, respectively.

Referring to individual exemptions, the Low Volume of Activity Order updated the sums considered a low volume of activity by information sources that are licensed credit-providers or licensed to operate a credit brokerage system, such that a low volume of activity will be defined as a credit backlog not exceeding ILS 1.5 billion.

Therefore, licensed credit-providers and licensed operators of credit brokerage systems that do not fulfill the conditions for a general exemption prescribed in the Exemption Regulations may apply for an individual exemption, provided that they meet the requirements of the Low Volume of Activity Order.

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