pc
nid 93474
Jun 24, 2026
rghosh@vixio.com
Israel
BOI - Press Releases
financial services
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2120 charsIsrael's Bank of Israel, Finance Ministry, and Securities Authority Release Final Compensation Model Report
On June 24, 2026, a joint working group comprising the Bank of Israel (BOI), the Ministry of Finance, and the Israel Securities Authority (ISA) published its final report on compensation models for public activity in securities markets.
The report presents an updated compensation system for securities account activity designed to protect consumers and encourage competition among market participants. The new model introduces several key improvements: simplified fee collection mechanisms, enhanced transparency, and better alignment between services provided and fees charged. The model was developed following a public call for comments, an interim report, extensive consultations with market participants, and comparative analysis of existing compensation structures and consumer preferences.
The compensation model comprises three phased implementation stages. Phase A introduces investment advisory services and service bundles within the banking system, allowing banks to offer bundled service packages and dedicated advisory fees separate from deposit management fees. Phase B modifies the collection mechanism for mutual fund unit transactions, replacing the current distribution fee with a unified brokerage fee of 0.2 percent of purchased unit value, collected over the holding period. This phase also establishes unified buy and sell fee mechanisms across passive and active mutual funds, excluding money market funds. Phase C establishes a fixed monthly shekel-based fee for securities deposit management services, covering custody and operational costs, with potential tiered pricing based on portfolio value to protect smaller investors.
The working group believes adoption of this model will strengthen competition, expand service offerings, improve investment advisory markets, and enable investors to make informed decisions. Implementation will proceed gradually, with regulators monitoring market adaptation at each stage before advancing to the next phase. The team recommended extending similar regulation to all market participants, including banks and non-bank brokerage firms, in the future.
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2449 charsBank of Israel Releases Final Report on Securities Fee Models
On June 24, 2026 a joint working team comprising the Bank of Israel's Banking Supervision Department, the Ministry of Finance Budget Division, and the Israel Securities Authority (ISA) published the final report on remuneration models for public activity in securities. The report presents an updated fee model for securities account activity, aimed at strengthening consumer protection and encouraging competition among market participants.
The new model is to be implemented in three phased stages, with the working team recommending that similar regulation be extended in future to all market participants, including banks and non-bank stock exchange members. Key points include:
Phase 1 - Investment advisory services and service packages in the banking system:
Banks will be permitted to offer customers service packages under which a single aggregate fee covers all securities and financial asset activity.
Banks will be permitted to charge a dedicated advisory fee for investment advisory services, separate from securities deposit management fees. The fee may be structured to reflect the nature of the advice provided, whether ongoing or one-off, human, digital, or hybrid.
Investment advisory services must be offered without conditioning on the purchase of additional services and must not be made a prerequisite for portfolio management.
2. Phase 2 - Changes to the fee mechanism for mutual fund unit transactions:
A uniform intermediation fee of 0.2% of the value of units purchased will replace the existing distribution fee model, charged over the holding period across all mutual fund types except money market funds, which will retain the existing distribution fee model.
The intermediation fee will be payable by the fund manager to the investment adviser or bank advisory function, and will apply only to advised purchase transactions.
Buy and sell fees for all mutual fund types, excluding money market funds, will be standardised. Legislative and regulatory amendments are required to complete this phase.
3. Phase 3 - Securities deposit management fees:
Securities deposit management fees, covering custody and operational costs arising from capital market trading, will be set as a fixed shekel amount charged monthly across all securities holdings and financial assets, both Israeli and foreign.
A tiered fee structure based on portfolio value may be introduced to protect customers with lower-value portfolios.