Capital Markets, Insurance and Savings Authority (Israel)

Capital Markets, Insurance and Savings Authority (Israel)
Name	Capital Markets, Insurance and Savings Authority (Israel)
Native name	הרשות לשוק ההון, ביטוח וחיסכון
Formed	2007
Preceding1	Israel Securities Authority
Preceding2	Ministry of Finance (Israel)
Jurisdiction	Israel
Headquarters	Tel Aviv
Chief1 name	Chaim Itzkovitch
Chief1 position	Commissioner
Parent agency	Ministry of Finance (Israel)

Capital Markets, Insurance and Savings Authority (Israel) is the statutory regulator responsible for supervision of securities, insurance, and pension markets in Israel. The Authority operates within the framework set by the Knesset and the Ministry of Finance (Israel), coordinating with domestic institutions such as the Bank of Israel and international bodies including the International Monetary Fund and the Organisation for Economic Co-operation and Development. It oversees market stability, consumer protection, and regulatory policy affecting participants from Tel Aviv Stock Exchange issuers to Pension fund managers and Insurance company groups.

History

The Authority was established following reforms in the 2000s that consolidated functions previously held by the Israel Securities Authority and insurance divisions within the Ministry of Finance (Israel), influenced by comparative models from the United Kingdom and the United States. Legislative milestones such as amendments to the Capital Market, Insurance and Savings Law and directives inspired by the Basel Committee on Banking Supervision and the International Association of Insurance Supervisors shaped its mandate. Key events in its development were responses to market episodes involving Teva Pharmaceutical Industries disclosures, corporate governance debates tied to Osem Investments, and pension reforms echoing trends seen after the Global Financial Crisis of 2007–2008.

Organization and Leadership

The Authority is structured into departments that mirror its remit: capital markets, insurance, pensions, enforcement, and market conduct. Leadership includes a Commissioner appointed by the Minister of Finance (Israel) with oversight from the Knesset Finance Committee and interface with regulatory peers such as the European Securities and Markets Authority and the U.S. Securities and Exchange Commission. Senior directors liaise with institutional stakeholders including Tel Aviv Stock Exchange, Israel Securities Authority-related units, insurance conglomerates like Harel Insurance Investments & Financial Services, and pension managers such as Clal Insurance Enterprises Holdings. Administrative functions interact with the State Comptroller of Israel and judicial review through Israeli courts including the Supreme Court of Israel.

Responsibilities and Regulatory Functions

Statutory responsibilities derive from the Capital Market, Insurance and Savings Law and encompass licensing of investment advisers, registration of securities offerings, approval of insurance policy frameworks, and authorization of pension fund operations. The Authority issues regulations consistent with standards from the International Organization of Securities Commissions and the International Association of Insurance Supervisors, and aligns with directives from multilateral organizations like the OECD and the Financial Stability Board. It enforces disclosure requirements for listed companies such as Strauss Group and Bank Hapoalim, and sets solvency and capital adequacy norms comparable to Solvency II benchmarks.

Supervision of Financial Institutions

On-site inspections and off-site supervision cover broker-dealer firms, asset managers, mutual funds, insurance companies, and provident funds. The Authority monitors systemic participants including Bank Leumi and Bank Mizrahi-Tefahot, macroprudential indicators reported by the Bank of Israel, and risk exposures of conglomerates like IDB Group. Enforcement actions have targeted market manipulation, insider trading linked to cases involving executives from listed corporations, and regulatory breaches by intermediary firms. Collaboration occurs with enforcement agencies such as the Israel Police economic division and prosecutorial bodies including the State Attorney (Israel).

Consumer Protection and Market Conduct

The Authority advances consumer protection through rules on product disclosure for life insurance, unit-linked policies, and pension portability, drawing from consumer frameworks in the European Union and the United Kingdom Financial Conduct Authority. It operates complaint-handling mechanisms that interact with advocacy groups, labor organizations representing Histadrut-affiliated pensioners, and professional associations of actuaries and accountants, including links to the Institute of Certified Public Accountants in Israel. Market conduct initiatives address conflicts of interest in firms like Clal Finance, sales practices in bancassurance channels, and fiduciary duties for trustees of provident funds.

Policy Development and Legislative Role

The Authority drafts regulatory proposals, impact assessments, and testimony for the Knesset Finance Committee on reforms affecting capital markets infrastructure, insurance product regulation, and pension adequacy. It contributed to legislative debates on portability and fee transparency informed by comparative studies of Australia and Chile pension systems. Policy areas include corporate governance codes for listed entities, remuneration rules for senior executives, and proposals for regulatory sandboxes to foster fintech innovation alongside incumbents such as PayKey and Leumi Card.

International Cooperation and Standards Compliance

International engagement includes membership in the International Organization of Securities Commissions and participation in peer reviews hosted by the Financial Stability Board and the IMF. The Authority signs memoranda of understanding with counterparts such as the U.S. Securities and Exchange Commission, the European Securities and Markets Authority, and the Prudential Regulation Authority (UK) to facilitate cross-border supervision of conglomerates and insurance groups. It incorporates international standards like Solvency II principles and OECD corporate governance guidelines while coordinating crisis management protocols with creditors, clearinghouses like NOMAD Clearing and regional regulators in the Mediterranean basin.

Category:Government of Israel Category:Financial regulatory authorities