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2012-03-22

Guaranteeing a Yield on Investments

The Supervisor of Banks issued this directive to prohibit banking corporations from guaranteeing investment yields to participants in mutual funds or members of provident funds. This ban applies to all joint investment arrangements and remains in effect as an interim measure until a comprehensive regulatory framework governing these financial relationships is enacted. The regulation explicitly establishes this prohibition to prevent misleading investor expectations while broader oversight rules are developed.

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Supervisor of Banks: Proper Conduct of Banking Business (12/95) Guaranteeing a Yield on Investments Page 320- 1 ONLY THE HEBREW VERSION IS BINDING GUARANTEEING A YIELD ON INVESTMENTS Introduction

  1. There are a variety of relationships between banking corporations and joint investments in mutual and provident funds. This regulation addresses the subject of guaranteeing a yield on investment in these bodies, until the overall regulation of these relationships is introduced. Prohibition on guaranteeing a yield
  2. A banking corporation shall not guarantee a yield to participants in joint investments in mutual funds, or to members of provident funds.

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