Client updates /  Financial Regulation

On August 5, 2026, the Israel Securities Authority (ISA) published a new draft directive issued under the Regulation of Investment Advice, Investment Marketing and Portfolio Management Law,1995, The directive will supersede its 2011 directive and allow, for the first time, licensees to publicize past returns on portfolios. Public comments will be accepted until September 4, 2026.

On July 26, 2026, the Israeli Capital Market, Insurance and Savings Authority published a policy document for implementing a reform in the guarantee market, along with a draft update to the licensing procedure for regulated financial services and supplementary draft circulars. Public comments were accepted until August 16, 2026, and discussions of the comments will be held on September 7, 2026.

The upcoming corporate credit database is expected to significantly affect Israel’s business credit market, expand credit data use, increase competition and access to credit, and require financial and other entities to prepare for reporting or relying on the database.

For the first time, Israel’s Supreme Court has established a clear test for calculating financial sanctions under the Consumer Protection Law, depending on whether the conduct constitutes a single act or multiple separate acts.

At the end of April 2026, the Israel Securities Authority (ISA) published a new draft directive regulating the activities of licensed investment advisors and marketers when providing one-off services and services in relation to alternative assets. The purpose of the directive is to reduce information asymmetries and mitigate potential conflicts of interest identified during ISA audits that, in some instances, even resulted in enforcement proceedings.

The Banking Supervision Department has published for public comment a draft Proper Conduct of Banking Business Directive titled “Supervisory Framework for Small and New Banks.” The purpose of the draft directive is to adapt regulatory and supervisory requirements to the size and complexity of small and new banking corporations’ operations, in accordance with the Basel Committee’s principle of proportionality, while maintaining banking system stability and protecting customers.

The Bank of Israel recently issued its decision to expand the identification code used by banking corporations and nonbank entities to connect to payment systems from two digits to three digits. While ostensibly only a technical change, in practice it is a significant step that will enable financial entities to hold accounts and transfer funds for customers directly and independently, without relying on existing banks.

ISA staff confirmed that activities of foreign research firms publishing “sponsored analyses” to investors abroad are not subject to the Israeli Advice Law. This determination provides certainty for foreign entities covering Israeli companies, provided they carry out and distribute the activity exclusively outside Israel.

2025 will be remembered as the year financial regulation succeeded in catching up with the pace of technological innovation, progressing from regulatory uncertainty to a clear framework encompassing many aspects of financial activity and suited to the modern era.

In August 2025, after receiving the recommendations of the Simhon Committee, the Bank of Israel published new guidelines for banking corporations. Banks providing financing for residential construction projects will now be prohibited from including stipulations in their financing agreements that relate to the price of an individual apartment.