Client updates /  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 of 1995, which will supersede its 2011 directive and allow licensees to publicize past returns on portfolios for the first time. 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.

At the end of June 2026, in the Afikim Water case, Israel’s Supreme Court for the first time set out a clear test for calculating financial sanctions under the Consumer Protection Law. The CPFTA quickly adopted the ruling in a legal statement and temporary enforcement directive, changing how sanctions are calculated in practice. This unusual speed suggests the authority attributes considerable significance to the judgment.

Amendment 74 to the Consumer Protection Law introduces, for the first time, obligations to record sales-related conversations, retain those recordings, and provide them to consumers upon request. The amendment applies to certain transactions listed in the law where the transaction value exceeds ILS 750, or where the price is unknown at the time of the call.

The reform expands options for importers, manufacturers, and marketers in Israel by lowering barriers and creating an additional route for products that meet the statutory conditions. However, it does not grant broad relief, since eligibility remains subject to conditions, exceptions, and documentation requirements, and compliance with applicable Israeli law must still be reviewed. Businesses should therefore prepare in advance to identify qualifying products, required documents, and points of interaction with existing Israeli regulation.

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.

Installing a “robot” for algorithmic trading and defining its parameters is not deemed a “technological service” but may constitute investment portfolio management, which requires a license. This is because the service provider retains material discretion (choice of platform, transaction volume, profit and loss targets, and risk management), even when the account and funds are in clients’ names.

The European Parliament has announced that agreement has been reached on the Digital Omnibus proposal for changes in the EU AI Act. Although still subject to completion of the formal legislative process, these changes represent a significant regulatory development and provide greater clarity as to the direction of EU AI legislation.

In March 2026, the Ministry of Economy and Industry published a draft bill to replace the current dual-use export control orders with comprehensive primary legislation. The proposed law aims to broaden regulatory oversight and establish a more effective, modern framework for controlling exports of civilian, nuclear, biological, and chemical items.

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.