Moshe Barkat (Photo from the gov website)
One of the most powerful positions in the capital market is “Member of the Investment Committee”. Virtually every institutional body (a body that manages money for the public) should appoint an investment committee that outlines the body’s investment policy and approves or rejects investments in exceptional amounts or in various channels and so on.
Today, the person who appoints the members of the investment committees is the institutional body itself. For example, the Phoenix Insurance Company appoints its members of its investment committee, as well as Migdal, Harel, Altshuler and so on. This method of appointment may create conflicts of interest that Moshe Barkat, who is in charge of the capital market and motor insurance, is interested in.
More in-
A bill is expected to come up soon that will regulate the work of the investment committees, and in order to complete the picture, one must accept the position of the Capital Market and Insurance Supervision, where the issue of investment committees is regulated. Hence the importance of the supervisory position.
In the bottom line, like his mother, the Capital Market and Insurance Supervisor today announces its official position, the highlight of which is the establishment of a public committee that will appoint the members of the investment committees and thus sever the link that may create conflicts of interest between the institutional body and the investment committees.
“The purpose of the position is to ensure that the supervision of the management of pension savers’ money is done while maintaining their interests at the maximum level and to ensure effective management of the investments by the trustees. Effectively.
“The position also states unequivocally that the use of the members’ voting power will be done independently and exclusively by the Fellows Investment Committee, with full neutralization of external influences, and while devoting resources to it from the institutional body,” the statement said.
The public committee, for the system of supervision, should be appointed by the Minister of Finance in a similar manner to the committees that elect dictators in a bank or an insurer without control. Such appointments committee will serve, as is customary in the said committees, also by two deputies who serve on the executive body.
The position of the Commissioner of the Capital Market further states that the role of the Peer Investment Committee will be sharpened as a factor that oversees investment management and not as a factor involved in aspects of actual investment management. Transactions with related parties or other transactions in which there is a risk of a conflict of interest will be required for the actual approval of the Peer Investment Committee.
The Fellow Investment Committee will be independently and exclusively responsible for formulating the voting policy of the institutional investor in the general meetings and in making decisions on how to vote so that the decisions reflect the good of the savers. The Capital Market Commissioner sets clear boundaries between the positions of the Investment Committee, the positions of the Board of Directors and the positions of the Investment Division.
The Commissioner of the Capital Market also seeks to strengthen the independence and independence of the committee members so that the appointment will be made in a similar procedure to an uninsured insurer. “The members of the committee shall be elected by a public appointments committee composed of public representatives and two deputies who serve on the governing body. In addition, adjustments will be made under the conditions of professional competence. For example, the experience requirement of committee members will increase from two years to five years, “the inspector writes.
The Commissioner of the Capital Market, Insurance and Savings, Dr. Moshe Barkat, said when publishing the supervisory position that:
“The separation must be made on three main levels – the first concerns the affiliation of the committee members to the institutional body, the second is the separation between the investment management system of the institutional body and the members of the investment committee supervising it, and the third separation is between the institutional body In the savers’ portfolio.
“I hope that in the future all the principles outlined in the document will be implemented within the framework of the legislation we propose to promote, with the main goal of putting the benefit of pension savers in Israel at the center.”
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