2024-02-06 14:02:20
Today (Tuesday), the Capital Market Authority sent a letter of clarification to all license holders on its behalf – agents and consultants, regarding the marketing of unsupervised investments, in which it warns them that they must act first and foremost for the sake of the customers and safeguarding their money, and not for their own personal benefit. This is against the background of Globes being exposed to an investigation conducted by the Real Estate Authority regarding the marketing of alternative investment funds.
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The authority clarified that these days it is conducting an inspection process with license holders on this issue, and may take sanctions in case of violations.
First, we note that most agents act according to the law and for the benefit of their clients. However, the Capital Market Authority explained that information received by the Authority indicates that “there is a practice in which license holders, in addition to their occupation according to the license granted by the Authority, also engage in the sale and marketing of financial products that are not supervised by the Authority”.
Therefore, the Authority clarifies in the letter the obligations that apply to agents and consultants who operate in the fields of unsupervised investment marketing and clarifies that “they must act for the benefit of their clients with faith and diligence, not prefer their personal affairs or the interests of others over the interests of the clients, act carefully and take all measures to ensure the the benefit of their clients”.
As written in Globes, the license holders must inform the client if they have a conflict of interest during the marketing process and also avoid an action that has a conflict of interest and the client did not give his consent to this in writing, and the authority clarified this in the letter.
The authority also stated in its letter the license holders’ obligation to act in accordance with its instructions on service, which state that there is an absolute prohibition for a license holder to integrate another service that is not under his license and is not supervised by the Capital Market Authority, during the same meeting or conversation in which an insurance or pension product is sold. Marketers were also reminded of the obligation to document the customer’s consent as part of a separate sale, because he is aware that this product is not supervised.
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