The ministerial legislative committee has passed a bill requiring private investment houses to file reports as if they were public companies. The bill applies to all investments houses with more than NIS 100 million in assets under management. The private members bill was submitted by MK Amnon Cohen (Shas) and MK Fania Kirshenbaum (Israel Beiteinu).

The bill will now go for a prereading by the Knesset plenum and then to the Knesset Finance Committee.

The bill requires investment houses to convene board of directors meetings at least once per quarter and to prepare financial reports pursuant to Israel Securities Authority regulations for public companies. The financial reports will not be disclosed to the public. The investment houses may subsequently, be required to publish the financial reports in the same way as privately owned insurance companies like Eliahu Insurance Ltd. or AIG Israel Ltd., or banks that are not listed on the TASE, such as Bank Yahav for Government Employees Ltd., Bank Otsar Hahayal, and Mercantile Discount Bank.

Privately owned investment houses account for an estimated NIS 220 billion of the NIS 600 billion in assets under management by the industry as a whole. The assets are in mutual, provident, and advanced training funds, portfolio management, and ETFs. Despite this, the privately owned investment houses are not supervised by either the Securities Authority or the Ministry of Finance’s Supervisor of Capital Markets, Insurance and Savings. Consequently, the privately owned investment houses can operate with no transparency.

Published by Globes [online], Israel business news – www.globes-online.com – on December 21, 2010

Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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