Client updates / Regulation

In order to contend with the meager supply of investment advice or portfolio management services via technological interfaces, the Israel Securities Authority has published a proposed amendment to the directive focusing on two main services: trading signal services and social trading. Both of these services rely on digital media.

The regulations grant several new rights to the relevant data subjects, when the database contains information transferred from the European Economic Area (EEA) to Israel, including the data subject’s right to delete information and a broader right of review.

The publication of the questionnaire aligns with global trends and reflects the importance of this subject for investors. According to the TASE press release, only 70 companies currently publish full ESG reports.

The monitoring of greenhouse gas emissions is not only important for protecting environmental quality, but it also offers commercial benefits, such as monitoring energy and supply chain expenses and participating in carbon emissions trading markets. 

A few months after ChatGPT became a popular tool for millions of users, users began filing lawsuits alleging violations of users’ privacy and data security breaches. The conclusions from these lawsuits are relevant to all companies engaging in the development and assimilation of AI technologies.

At the conclusion of a proceeding conducted over about two years, an Israeli court recommended that the class plaintiffs withdraw their actions in light of the legal difficulties and since there is no reasonable possibility that the legal questions will be  ruled in favor of the plaintiffs. The plaintiffs accepted the court’s recommendation, and the court dismissed in limine 66 class actions.

Notwithstanding growing awareness and the measures being taken to reduce greenhouse gas emissions (as part of Israel’s commitment under the Paris Agreement), the emerging Arrangements Law could cause a regression in environmental legislation and hinder efforts to protect Israel’s population from environmental hazards.

The more artificial intelligence permeates additional spheres of private and public life, the greater the need to regulate uses of this technology. Various artificial intelligence regulations are already in place around the world and additional regulatory initiatives are being promoted at a rapid pace.

Israeli cyber companies operating in Europe are exposed to the GDPR even though they are registered in Israel, and even if the information they collect is not processed or stored in Europe.

An amendment to the Israeli Consumer Protection Law, also known as the “Do Not Call Me Law,” is about to enter the enforcement phase on January 1, 2023. Inter alia, the law imposes liability on a business telemarketing its product or service, even if a third party is actually making the call.

Activity in the form of financial decentralization (Decentralized Finance - DeFi) does not exempt from requirements in the field of prevention of money laundering prohibition or compliance with sanctions. It turns out that DeFi is subject to the same "laws of gravity" as projects in the traditional financial industry.

The Israel Securities Authority’s (ISA) new draft amendment to the general permit to offer foreign brokerage services in Israel proposes to obligate permit holders to supervise the activities of marketers on their behalf. For example, permit holders must carry out due diligence examinations of marketers.

New privacy protection regulations drafted by the Israeli Ministry of Justice will obligate Israeli entities to protect data reaching Israel from the European Economic Area, i.e., from EU member states and Iceland, Norway, and Liechtenstein.

The Israeli Privacy Protection Authority recently published a document presenting its position and recommendations on the privacy protection aspects pertinent to waivers of medical confidentiality and disclosures of medical information during the hiring process.

The Israeli Privacy Protection Authority has published a document containing a series of recommendations that address the use of ordinary and non-designated applications for sharing information among a variety of parties.

The Tel Aviv District Court recently allowed a motion to certify a class action against the Volkswagen Group and its importer in Israel, Champion Motors Ltd. The class action focuses on the Dieselgate scandal, after an investigation discovered that Volkswagen installed emissions management software in its diesel-powered vehicles that falsifies air pollution data.

In light of the increase in fraud crimes in the digital space, the Israeli Justice Ministry has formulated recommendations for defining a policy to contend with ransomware attacks. The recommendations relate to both private entities and government bodies. The new recommendations are part of a more comprehensive examination conducted by the Justice Ministry of enforcement authorities’ handling of these cyberattacks, including regarding the provision of support to entities under attack, assistance to victims of fraud in the digital space, investigation, and enforcement.

To make it easier for fintech companies to operate in Israel, the Knesset Finance Committee has passed regulations to exempt several types of credit providers and financial service providers from a licensing duty.

The Israeli CMISA published two draft circulars about its intent to tighten the supervision over crypto assets, in the wake of the Celsius crypto meltdown.

This week, the Israeli government approved the joint proposal submitted by the Prime Minister and the Minister of Environmental Protection to obligate all government ministries to formulate climate action plans. The proposal was approved ahead of the upcoming United Nations Climate Change Conference, which will be held in Sharm El Sheikh, Egypt.