Regulatory Alerts2014-07-10
Added
A banking corporation’s business with related parties
The Bank of Israel revises Directive 312 to lower the ownership threshold for defining a related party from 10 percent to 5 percent, with a 60-day temporary deviation allowance. The amendments expand the definition of related parties to include directors nominated by shareholders and holders of control in controlled corporations, while updating the capital measure to Tier 1 capital. New requirements mandate that the Board of Directors establish policies for approving related-party transactions and managing personal conflicts of interest. Indebtedness restrictions for non-controlling holders are set at 5 percent of capital, with a NIS 1 million cap for officers, and transaction approval thresholds are updated to require Audit Committee oversight. These changes apply to banking corporations as of January 1, 2015.
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