The Finance Committee, chaired by MK Alex Kushnir, today held a discussion on the Financial Regulations (Provident Funds) Regulations (direct expenses due to the execution of transactions). ‘Direct expenses’ on transactions, which limit the amount of direct expenses collected beyond the management fee commissions in various investments, and set them at a maximum of 0.25%.
In February 2008, the then Minister of Finance, Roni Bar-On, enacted the regulations that set out the expenses that can be charged to members in addition to the management fee. In 2014, for the first time, the main regulations set a ceiling for the amount of certain expenses that can be charged, in order to limit their rate. The expense limit has been set for expenses arising from investing in investment funds, portfolio managers, funds, mutual funds, non-marketable assets, including the provision of credit, and the provision of mortgages. The ceiling set is 0.25% of the total revalued value of the institutional investor’s assets, and is set as a provision that has been amended several times and extended.
In the explanatory memorandum to the regulations approved today, it was stated that since 2014, the Insurance and Savings Capital Authority has examined the implementation of the expenditure limit among institutional entities. Examination of the application reveals that on the one hand, it is important that certain types of direct expenses were limited. On the other hand, there is a concern that imposing an arbitrary or inappropriate limit, in terms of the scope and types of investments The public. ”
The explanatory memorandum stated that in order to determine the necessary balance and prevent unnecessary harm to the saving public, the Authority sought to conduct a comprehensive and horizontal examination of the issue of direct expenses, and that for this purpose the Commissioner appointed an advisory committee to examine the issue: ” , Including: examining the types of expenses that can be charged as direct expenses, the expense limit set in regulations for some types of expenses, the contribution of investment in channels and investment instruments in which expenses can be charged directly to savers’ returns, the disclosure of direct expenses based on colleagues and their classification. The rate of investment abroad.
The committee began its work on March 12, 2020 and published the draft report of its recommendations on June 28, 2021, stating in the explanatory memorandum to the regulations that “as part of its work, the committee held comprehensive discussions with representatives Yields on a number of investment channels for which direct expenditures were allowed to be collected “and that upon completion of its work the committee will submit to the commissioner its report of recommendations” which will be examined by it, and will form the basis for a proposed permanent regulation to be presented to the Minister of Finance
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