Supervisor of Banks: Proper Conduct of Banking Business [32] Board of Directors

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 1 ONLY THE HEBREW VERSION IS BINDING BOARD OF DIRECTORS
Table of Contents
Chapter 1 General

Introduction 301-5
Application 301-5
Definitions 301-6
Office holder’s certification 301-6
Chapter 2 The functions and authority of the board of directors 301-8
The functions of the board of directors 301-8
Subjects that the board of directors is obligated to discuss
and decide
301-8
Repealed 301-12
The business situation of the banking corporation 301-12
Exceptional events 301-13
Mechanisms for supervision and control of controlled
corporations
301-13
Audit and control functions 301-14
CEO 301-14
The senior echelon 301-15
Repealed 301-15
Code of ethics 301-15
Conflicts of interest 301-16
Non-transparent activities 301-16
Frequency of discussions 301-17
Approval of means and monitoring for the implementation of
decisions
301-18
Meetings without the presence of management 301-18
Vesting authority in committees of the board of directors 301-19
Chapter 3 The composition of the board of directors 301-21
21a. General 301-21
21b. Proper representation for both genders 301-21
Number of members of the board of directors 301-21
Employees of the banking corporation as members of the
board of directors
301-22
Outside directors 301-22
The board’s qualifications 301-23
Knowledge of Hebrew 301-25
Repealed 301-25

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Chapter 4 Chairman of the board of directors 301-26
28. Chairman of the board of directors 301-26
29. Repealed 301-26
Chapter 5 Eligibility to serve as director 301-27
30. Eligibility of director 301-27
31. Permanent conflict of interests 301-27
32. Other occupations 301-30
Chapter 6 Board of directors’ committees 301-31
33. Required committees 301-31
34. Composition and work methods of board of directors’
committees
301-31
35. Audit committee—composition and work methods 301-32
36. Audit committee—functions 301-33
37. Committee for transactions with related parties 301-36
38. Remuneration committee—composition and work methods 301-36
38a Remuneration committee—functions 301-37
39. Risk management committee 301-39
39a Information Technology and Technological Innovation Committee 301-40
Chapter 7 Meetings of the board of directors 301-42
40. Frequency of meetings 301-42
41. Attendance at meetings of the board of directors 301-42
42. Notices and background material for meetings 301-42
43. Legal quorum and voting 301-43
44. Agenda 301-43
45. Minutes 301-44
46 Participation of the internal auditor in meetings 301-44
47. Repealed 301-44
48. Substitution and observation 301-44
49. Holding meetings via communications media 301-45
50. Making decisions without convening 301-46
Chapter 8 Practices for effective functioning of the board of directors 301-47
50a. Work procedures 301-47
51. Requirements of a director 301-47
52. A director’s right to receive information 301-47
53. Professional assistance for the board of directors 301-47
54. Signatory rights 301-48

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55. Sector conflict of interest 301-48
56. Personal interest 301-50
57. Relations with employees of the banking corporation outside
of meetings
301-50
58. Professional instruction and expertise 301-52
59. Evaluating the effectiveness of the board of directors’ work 301-52
Chapter 9 Reporting to the Supervisor of Banks 301-54
60. Frequency of reporting 301-54
61. Annual reporting 301-54
62. Reporting an exceptional event 301-54
63. Mode of reporting 301-56
Chapter 10 Miscellaneous 301-57
64. Documents of incorporation 301-57
Appendix A Questionnaire for candidate for office in a banking corporation 301-58
Appendix B Declaration by an office holder when updating particulars 301-76
Appendix C Capital market corporations 301-78

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Chapter 1: General
Introduction

(a) Effective corporate governance is an essential element in the safe and proper
functioning of a banking corporation, and consequently in achieving and maintaining public confidence in the banking system. Given the important role of banking corporations in the economic system, and their sensitivity to difficulties stemming from ineffective corporate governance, and in view of the need to protect the deposit holders, proper functioning at a high standard by the board of directors has become an increasingly important part of proper corporate governance and the proper running of a banking corporation. For this purpose, directives governing a board of directors’ functions, composition, and method of operation have been established. These directives constitute the minimum rules required for the proper conduct of a banking corporation in all matters pertaining to the actions of its board of directors. (b) To remove all doubt, it is hereby stated that as a rule, these directives are designed to supplement the Companies Law. Application
(a) These directives shall apply to all the following corporations (in this directive—
“banking corporation”):
(1) banking corporation;
(2) auxiliary corporation that is a credit card company; (3) one holding a license as a payment service provider with prudential importance, as defined in Section 36i of the Banking (Licensing) Law; however, for an entity listed in paragraph (1) of the said definition that does not meet the conditions set forth in Section 36j(b) of the Banking (Licensing) Law, only Section 4 of this Directive shall apply. (b) The Supervisor of Banks is entitled to issue specific directives differing from those given below that apply to a specific banking corporation or specific director, or to exempt, in exceptional cases, a banking corporation or a director from a specific directive, if the Supervisor is convinced that circumstances justify it. Definitions
“The Ordinance”—The Banking Ordinance, 1941
“Banking (Licensing) Law”—The Banking (Licensing) Law, 5741-1981 “Companies Law”—The Companies Law, 5759–1999. “Internal auditor” – the internal auditor of the banking corporation, as referred to in Section 14E of the Ordinance.

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 5 ONLY THE HEBREW VERSION IS BINDING “CEO”—An individual who holds the most senior management position in the banking corporation, regardless of his or her title. “Office holder”—As defined in the Companies Law, unless stated otherwise in this directive. “Personal interest”—As its understanding in the Companies Law. “Audit and control function”—Includes internal audit, risk management, or the compliance function—the function or its head, as relevant. “The external auditor”—The external auditor of the banking corporation, as referred to in Proper Conduct of Banking Business Directive No. 302 – "External Auditor of the Banking corporation". “Branches”—controlled corporations, branches, representative offices, and agents outside of Israel. “Controlled corporation” - A corporation controlled by the banking corporation. Office holder’s certification
4. (a) In accordance with Sections 11A and 15c(b) of the Banking Ordinance, a person
shall not serve as an office holder in a banking corporation unless the Supervisor of Banks was notified at least 60 days before the start of the office holder’s term. The banking corporation shall enclose with the said notice a questionnaire to be completed by the candidate. The questionnaire and its appendices are attached in Appendix A (hereinafter – ‘the Questionnaire’). The Supervisor is entitled to change and update the questionnaire from time to time. The Questionnaire constitutes an integral part of the notice of appointment of an office holder and the commencement of the review process by the Banking Supervision Department. (b) In order to remove all doubt, it is hereby clarified that any of the following cases shall also be considered an appointment of a person as an office holder as referred to in Subsection 4(a) above, and requiring that the Supervisor be notified in advance, as required under the Ordinance together with the Questionnaire:
(1) Extension of a term or reappointment to the same position; (2) Appointment to a different position as an office holder; (3) Appointment of a director as chairman of the board of directors; (b1) Notwithstanding the provisions of Subsection (a), for the announcement of the appointment of an office holder for a limited period that does not exceed 4 months, instead of the questionnaire, the banking corporation’s explanation of the special circumstances of the appointment and the expectation of its length are to be attached. (b2) Notwithstanding the provisions of Subsection (a), if within 12 months from the date of appointing an office holder (hereinafter, “the period”), the banking corporation requests to appoint that office holder in the same banking group, as defined in Section 31c, to another office or to an additional office—a questionnaire

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 6 ONLY THE HEBREW VERSION IS BINDING is not necessary to be filled out. If during the period there were no occurrences or changes in the details listed in the questionnaire, attach a declaration in the format of Appendix b1; if there were such occurrences or changes as noted, attach a declaration in the format of Appendix b2. (c) The office holder must give notice through the banking corporation of events or material changes in the particulars mentioned in the questionnaire. The Supervisor shall consider and decide whether, due to such changes, to order the termination of the office holder’s term under Section 11A(e) of the Ordinance. The office holder and the banking corporation must attach to the notice a statement as formulated in Appendix B2. (c1) In order to examine the list of office holders who require the approval for the appointment in accordance with Section 11a(h)(1) of the Ordinance, the banking corporation must notify the Supervisor of any material change in its organizational structure including material changes in the scope of areas of responsibility as defined in Section 11a of the Ordinance). (d) For the purposes of this section (Section 4), “office holder” is as defined in section 11A of the Ordinance.

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Chapter 2: The functions and authority of the board of directors
The functions of the board of directors
5. The board of directors bears responsibility for the banking corporation’s business and
financial soundness. The board of directors shall employ all reasonable measures required to fulfill its duties in accordance with the law and as stated in this directive. (a) The board of directors shall formulate the banking corporation’s strategy, and shall approve the board of directors’ policy, which will guide the banking corporation in its regular activity. (b) The board of directors shall supervise the actions of management and their compliance with the board’s policy. (c) The board of directors shall verify the existence of clear areas of responsibility and accountability in the banking corporation. (d) The board of directors shall formulate an organizational culture for the banking corporation that requires implementation of high standards of professional behavior and integrity. (e) The board of directors shall verify the banking corporation’s compliance with the law and regulations. Subjects that the board of directors is obligated to discuss and decide
6. The board of directors shall discuss, decide, approve, and issue instructions, whichever is
relevant, on the following topics:
Overall strategy and policy
(a) The overall strategic goals of the banking corporation, controlled corporations, and branches, including the principles for actions, the business model and profit sources, operational efficiency, overall risk strategy, and appetite for risk, as detailed in Directive 310. The discussion on strategic goals is to be conducted against the background of the macroeconomic, business, and regulatory environment in which the banking corporation operates. The board of directors of a controlled corporation must take into account the group’s overall strategic goals, as determined by the board of directors of the controlling corporation, insofar as they are consistent with the good of the controlled corporation and the stipulations of Section 11 of the Companies Law; (a1) The banking corporation’s organizational structure and the group’s structure. The board of directors is to examine that the structures of the banking corporation and the group are consistent with its business strategy, with reference to, among other things, the types of corporations in the group and the manner of their holding and control, and to the controlling banking corporation’s ability to identify, control and manage the risks at the group level, including excess risks deriving from complex structures. To that end, the board of directors shall verify that the structures of the

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 8 ONLY THE HEBREW VERSION IS BINDING banking corporation and of the group include appropriate channels of communication and of reporting. In this subsection, “group” refers to the banking corporation and corporations controlled by it. (b) Overall risk management policy, including approval of policy and the method of risk management for each of the banking corporation’s various risks, plus all its controlled corporations and branches (credit risks, market risks, operational and technology risks, liquidity risks, compliance risks, legal risks, etc.), as listed in
Section 15 of Proper Conduct of Banking Business Directive 310;
The board of directors of a controlled corporation must take into account the group’s risk management policy, as determined by the board of directors of the controlling corporation, insofar as it is consistent with the good of the controlled corporation and the stipulations of Section 11 of the Companies Law; (b1) Approval of new product policy and examination and pre-approval of significant new products prior to their operation, as detailed in Proper Conduct of Banking Business Directive 310; (c) The banking corporation’s credit policy, and the goals listed in Proper Conduct of Banking Business Directive 311; (d) The banking corporation’s IT and E-Banking policy and strategy; (e) The process of evaluating capital adequacy in comparison with the level determined for exposure to risk, capital policy, and capital structure and the changes in it; (f) Targets for achievement during the coming year and the degree to which they match the banking corporation’s policy, and approval of the work plan in view of these targets; (g) The banking corporation’s overall budget (income, expenditures, and investments), and monitoring its actual performance; Supervision and control (h) Reporting the banking corporation’s business situation, as described in Section 8; (i) Significant deviation, as defined by the board of directors, from the restrictions established in the framework of the policy determined by the board of directors; (j) Types of exceptional events that the board of directors should discuss, and discussion of significant exceptional events in accordance with the circumstances described in Section 9; (k) Mechanisms for supervision and control of controlled corporations, as described in
Section 10;
(l) Work of the audit and control functions, as described in Section 11; (m) Audit reports as listed in Section 36(a)(2); (n) Approval of the banking corporation’s annual and quarterly reports to the public; (o) Notices from the external auditor; (1) Notices of failure to correct deficiencies under Section 3(B) of Proper Conduct of Banking Business Directive 304;

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 9 ONLY THE HEBREW VERSION IS BINDING (2) Notice of doubt concerning the banking corporation’s continued existence as a going concern under Section 6(C) of Proper Conduct of Banking Business Directive 302; Personnel and remuneration policy (p) Appointment of a CEO, as described in Section 12, his dismissal, and evaluation of his performance; (q) Appointment policy and evaluation of the performance of the senior echelon, as described in Section 13; (r) Periodic rotation of certain office holders in the banking corporation, as described in Proper Conduct of Banking Business Directive 360; (s) Remuneration policy (as defined in Proper Conduct of Banking Business Directive 301A), after taking into account the recommendations of the remuneration committee; (t) Contractual agreement between the banking corporation and senior office holders regarding their remuneration (as these terms are defined in Proper Conduct of Banking Business Directive 301A), after the approval of the remuneration committee and before the approval of the general meeting as required and with regard to the Internal Auditor, the board’s approval shall also be at the recommendation of the audit committee; (u) Principles of remuneration agreements of banking corporation employees who are not senior office holders; Miscellaneous (v) An issuance of shares (including options and convertible securities) by a controlled corporation, whether in Israel or overseas, and any other issuance by a controlled corporation guaranteed by the banking corporation, other than an issuance by a corporation in which the parent corporation holds all the means of control, and in which the issuance is to the banking corporation itself or a corporation controlled by the banking corporation; (w) Making changes in the structure of the banking corporation’s control of a controlled corporation whose activity is significant for the banking corporation; (x) Making and selling permanent investments, including an investment in a controlled corporation, whether located in Israel or overseas, according to criteria established by the board of directors, where the amount of the investment is one of the criteria; the criteria shall be determined in a way that avoids involvement by the board of directors in regular management of the banking corporation; (y) A code of ethics for the banking corporation, as described in Section 15; (z) A policy for preventing conflicts of interest and controls for them, as described in Proper Conduct of Banking Business Directive 312 and in Section 16; (aa) A policy on “non-transparent activities,” as described in Section 17; (ab) Any other matter of significance to the banking corporation’s activity, or to

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7. Repealed.
The business situation of the banking corporation
8. In the discussion of the business situation of the banking corporation under Section 6(h),
the board of directors shall address the reports submitted to it written in a format decided by the board of directors. At a minimum, these reports shall include the following items:
(a) Monthly report
(1) A summary of the balance sheet and profit and loss statement that discusses the financial profits, income from fees, and operating expenditures; (2) The degree of the banking corporation’s exposure to various types of risks; (3) Handling of hard-to-collect debts whose amount are significant; (4) Important changes in the situation of controlled corporations and significant investments in fixed assets; (5) Transactions that are significant or exceptional for the banking corporation’s business according to the judgment of the CEO, in addition to the rules established by the board of directors in this matter; (6) Activity of the banking corporation in the capital market for its own account (nostro). (b) A quarterly document for exposure to the various types of risks, as described in Proper Conduct of Banking Business Directive 310. Exceptional events
9. In the discussion of exceptional events under Section 6(j), the board of directors:
(a) Shall discuss any event included in the list of types of exceptional events as determined by the board in advance, including lawbreaking or alleged lawbreaking, violation of proper conduct of banking and lack of integrity, provided that each exceptional event involving a suspected crime is referred immediately to the internal auditor for investigation or to the police, whichever is relevant, and that any exceptional event involving a reasonable suspicion of embezzlement, as described in Section 8D1 of the Ordinance is reported to the internal auditor and the Supervisor, as stipulated in Section 8D1 of the Ordinance and Proper Conduct of Banking Business Directive 351. (b) Shall immediately discuss any event deviating from the ordinary course of the banking corporation’s activity that is likely to have a substantial impact on the banking corporation’s business (even if not included in the list appearing above in subsection 9(a)). Mechanisms for supervision and control of controlled corporations

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10. In discussing the mechanisms for supervision and control of controlled corporations
under Section 6(k), the board of directors shall set general guidelines for the corporate governance structure in controlled corporations that will contribute to effective supervision of the group, and shall establish mechanisms for supervision and control of controlled corporations, including, at a minimum, the following:
(a) Guidelines that ensure that controlled corporations communicate to the banking corporation the information necessary for regular monitoring of the group and supervision and control of its business and the volume of risk, subject to any law; (b) Guidelines for establishing a central headquarters unit to concentrate and analyze this information on branches and deliver a summary report about it with recommendations to the banking corporation management in an approved reporting format; (c) Guidelines and procedures that ensure that the internal auditor receives all the information and documents that he requires, in his judgment, in order to conduct an internal audit and verify the existence of proper internal auditing in any controlled corporation in which he does not serve as the internal auditor, including the work plans of the internal auditors in controlled corporations, reports on exceptional events in these corporations, and any information and material required from the directors of these entities, or from their management, or from any of their employees, all subject to any law. The board of directors of a controlled corporation must take into account the overall guidelines for the group issued by the board of directors of the controlling banking corporation, insofar as they are consistent with the good of the controlled corporation and the stipulations of Section 11 of the Companies Law. Audit and control functions
11. In discussing the work of the audit and control functions under subsection 6(l), the board
of directors shall verify that the banking corporation is making effective use of the audit and control functions to provide independent examination and confidence with respect to the operations and performance of the banking corporation, including:
(a) Verifying the independence, objectivity and effectiveness of the audit and control functions; (b) Ensuring the qualifications of the audit and control functions and allocating suitable resources for their work; (c) Verifying effective handling by management of the findings of the audit and control functions. CEO
12. In discussing the appointment, performance and dismissal of a CEO under Section 6(p),
the board of directors shall:
(a) Appoint only one CEO for the banking corporation

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 12 ONLY THE HEBREW VERSION IS BINDING (b) Establish the process of appointing the CEO (c) Define in detail the work methods and obligations of the CEO vis-à-vis the board of directors; (d) Require the CEO to regularly report his actions to the board of directors, and define the reports that he or she must provide, including the reports listed in Section 8. The senior echelon
13. In discussing appointments policy and evaluation of the senior echelon’s performance
under Section 6(q), the board of directors shall, among other things:
(a) Approve appointment of executives by the CEO. The board of directors is entitled to rule that appointments to additional senior positions require its approval; (b) Discuss the circumstances under which key audit and control officers were dismissed; (c) Determine criteria and threshold conditions that ensure that candidates for senior positions possess appropriate and suitable qualifications for managing the affairs of a banking corporation; (d) In addition, verify the existence of a proper work plan for maintaining a suitable management reserve in the banking corporation;
14. Repealed.
Code of ethics
15. In discussing the code of ethics under Section 6(y), the board of directors shall, among
other things:
(a) Establish a code of ethics defining high values and standards of professional behavior and responsibility for the purpose of guiding the banking corporation in its regular activity, and which addresses matters such as corruption, private business, unethical behavior, and lack of fairness towards customers; (b) Verify that measures are taken to ensure that the standards mentioned above in subSection 15(a) are distributed and applied throughout the banking corporation; (c) Verify the existence of mechanisms for encouraging the reporting of illegal and unethical acts, while providing proper protection for employees complaining about negative consequences. Conflicts of interest
16. In discussing policy for preventing conflicts of interest and their control under Section
6(z), the board of directors shall, among other things; (a) Establish guidelines for transactions with related parties, as required under Proper Conduct of Banking Business Directive 312; (b) Establish mechanisms for separation between the banking corporation’s activities in different sectors, between the banking corporation’s activities and those of controlled

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 13 ONLY THE HEBREW VERSION IS BINDING corporations or between the banking corporation’s activities and those of the group to which the banking corporation is related, if conflicts of interest are likely. Non-transparent activities
17. In discussing “non-transparent activities” under subsection 6(aa), the board of directors
must ensure that the banking corporation’s policy and procedures are proper, and which facilitate:
(a) Verifying that it is necessary that the activity be of a structure that limits transparency, and if not, closing it or changing its structure (b) Defining and understanding the purpose of the activity and ensuring that its actual implementation matches the goal it was meant to achieve; (c) Identifying, measuring, and managing all significant risks resulting from this activity, including legal (including anti-money laundering and counter the financing of terrorism) risks and risks involving goodwill; (d) Supervision of the regular evaluations of compliance with all the relevant laws, and compliance with the banking corporation’s internal policy; In this section, “non-transparent activities” are activities carried out through compound entities (such as trustee entities and special-purpose entities) and activities of the corporation on its own behalf or on behalf of others in jurisdictions in which enforcement and transparency mechanisms are weak or in jurisdictions established by the banking corporation as “Offshore”. Frequency of discussions
18. The board of directors shall discuss the topics listed in Section 6 with the following
frequency:
(a) The topic mentioned in subsection (a), at least once every three years; topics mentioned in subsections (b), (c), (e), (f), (p–q) (s)—concerning evaluation of performance only, at least once a year; (b) Topics mentioned in subsections (i) and (j) concerning significant exceptional events; in subsections (m), (o(1)), and (q) concerning appointments and dismissals; and in subsections (v), (w), (x), and (aa) soon after the event, concerning the obtaining of reports, decisions, notices, or a requirement, depending on the circumstances of the matter; (c) In subsection (g) – budget:
(1) The budget shall be submitted no later than the end of December of the year preceding the budget year under discussion; at the same time, an overall budget can be approved no later than the end of January of the budget year under discussion, provided that by the end of December of the preceding year, a temporary budget has been approved for the budget year under discussion or for January itself; (2) The board of directors shall regularly monitor, at least once a quarter, the actual performance of the budget;

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 14 ONLY THE HEBREW VERSION IS BINDING (d) In subsection (h) – the business situation of the banking corporation:
(1) The board of directors shall be briefed at least once every six weeks, and shall discuss as necessary the business situation of the banking corporation according to the monthly report mentioned in Section 8(a); (2) Once every three months, the board of directors shall discuss the banking corporation’s business situation according to the risk exposure document mentioned in subsection 8(b). (e) In subsection (n) – reports to the public – the reports should be discussed before their approval: once a quarter for quarterly reports and once a year for yearly reports; (f) In subsection (o(2)) – notice by the external auditor of doubt concerning the continued existence of the corporation as a going concern – the discussion shall take place no later than three days after the notice, before the financial statements are approved; (g) In the other subsections, the board of directors shall determine in advance the frequency at which they will be discussed, provided that a discussion takes place as soon as possible when the conditions requiring it are fulfilled. Approval of means and monitoring for the implementation of decisions
19. (a) The board of directors shall verify the existence of adequate means of implementing
its decisions, and shall monitor their implementation.
(b) In cases in which the board of directors must set guidelines, it shall determine written procedures for handling the topics listed. The procedures shall determine and define the entity authorized to handle these matters and the method of handling them, and the accountability in a matter assigned to a different individual or entity in the banking corporation. Meetings without the presence of management
20. (a) The board of directors shall hold a discussion at least once a year without the
presence of management. The following topics shall be discussed at this meeting:
(1) Evaluation of the performance of the CEO and the functioning of management; (2) Evaluation of the quality of the information received from management at meetings of the board of directors, including the amount and type of information and its frequency; (3) Salary and remuneration for the senior echelon; (4) Evaluation of the audit and control function and of the effectiveness of controls in the banking corporation; (5) Additional topics relating to the relationship between management and the board of directors. (b) Once every two years the board shall hold a discussion to assess the

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21. The board of directors is entitled to use committees specializing in specific matters, which
shall operate as described in Chapter 6 of this directive:
(a) The board of directors shall discuss and decide on which topics it will vest its authority in a committee on its behalf. The board of directors shall not vest authority in an undefined or residual manner in any of its committees, unless it has assessed the significance of such a concentration of authority. (b) A decision to establish a committee shall be taken by the plenum of the board of directors. When the board of directors establishes a committee, it shall determine its composition, authority, and functions, and shall approve its procedures. (c) Decisions taken by committees on the topics listed in Section 6 shall be reported in writing to the plenum, with the attachment of the background material submitted to the committee. In any case, an additional discussion shall be held by the board of directors plenum if demanded by one or more of the directors within a period of time to be determined by the board. (d) Regardless of the stipulations of subsections 21(a) and (b), the board of directors is not entitled to vest its authority in board of directors committees in the matters listed in the following subsections: 6(a), 6(b) except for risks that are not material or components that are not central to the risk management, 6(e), , 6(g) except for ongoing monitoring of actual budget performance, 6(h), 6(i), 6(m), 6(n), 6(o), 6(p), 6(s), 6(t),. (e) The stipulations of subsection (d) do not apply to matters in which a decision in the framework of the committee is required under any law, or to matters in which the board of directors has obtained advanced written approval from the Supervisor.

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Chapter 3: The composition of the board of directors
General
21a. The execution of boards’ functions in an appropriate manner requires holding effective discussions on the various issues on the agenda. An effective discussion is held, among other things, when the directors represent a range of sectors and express different opinions, which prevents “groupthink”. Proper representation for both genders 21b. Without detracting from other requirements in this Directive, the composition of the banking corporation’s board of directors shall give proper representation to both genders. To that end, the Board shall establish policy for the gender diversity percentage in it, including the range of time and the milestones for achieving the target. Number of members of the board of directors
22. (a) The board of directors shall contain a number of directors that will encourage
efficiency and significant strategic discussion, provided that it includes no less than 7 and no more than 10 directors. (b) Should a banking corporation become a banking corporation without a controlling core, and the number of its directors just before becoming a banking corporation without a controlling core is less than 10, the Supervisor of Banks is permitted to set instructions for said banking corporation regarding a gradual increase in the number of directors, up to reaching the full 10 members, and to that end may establish for said banking corporation a maximum number of directors for a given year or given years. This will take into account, among other things, the needs of the banking corporation in the period after becoming a banking corporation without a controlling core, including the need for balance in the composition between veteran directors and new directors. (c) A banking corporation that is not a bank, and the nature and scope of whose transactions do not justify the appointment of 7 members to the board of directors may, if so permitted by the Supervisor of Banks, appoint a smaller number of directors to the board of directors. (d) A banking corporation that is of the opinion that a larger number of directors are needed for its board’s proper functioning, may, if so permitted by the Supervisor of Banks, appoint a larger number of directors to the board of directors. Employees of the corporation as members of the board of directors
23. Employees of the banking corporation shall not be appointed as members of the board of
directors.

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24. (a) At least one-third of the members of the board of directors shall be outside
directors;
The banking corporation is entitled to appoint, as said outside directors, the outside directors and independent directors listed under the Companies Law; unless explicitly stated otherwise, in addition to the relevant provisions in the Companies Law, all the provisions referring to outside directors in this directive shall apply to said directors. (b) For the purposes of this directive, an ‘outside director’ is someone who fulfills all the following conditions:
(1) The qualifying requirements described in Section 240 of the Companies Law. For this purpose:
(i) ‘“Control” is as defined in the Banking (Licensing) Law; (ii) “Professional qualification” – an academic degree as required under one of the conditions listed in paragraphs (1) or (2) of Section 2(a) of the Companies Regulations (Conditions and Tests for a Professionally Qualified Director with Accounting and Financial Expertise and for a Professionally Eligible Director), 5765–2005, as well as experience required under its paragraph (3). (iii) “Linkage” – In addition to the stipulations of Section 240(b) of the Companies Law, the existence of a linkage with a party holding over 5 percent of a particular type of means of control in the banking corporation shall also be regarded as a linkage that excludes appointment as a director. (2) Neither the candidate or any relative holds shares in the banking corporation, in a corporation controlled by the banking corporation, in a corporation that controls the banking corporation, or in a banking corporation controlled by any of the above; For the purposes of this section:
(i) “Control” is as defined in the Banking (Licensing) Law.
(ii) ”Holder”—holding as defined in the Banking (Licensing) Law, 5741– 1981, except for a holding of less than 1 percent of the paid-up capital of a corporation whose shares are listed on the TASE. (iii)“Relative” – a spouse, parent, or son or daughter. (c) The provisions of sections 239(d), 241, 244, 244(a), 245(a), 245(a3), 245(b), 246, 247, and 249 of the Companies Law shall apply to an outside director according to this directive. (d) Notwithstanding the stipulations of Section 245(b) of the Companies Law, the Supervisor is entitled to end the term of an outside director, who is not an outside director appointed in accordance with the Companies Law, under Section 11A(e) of the Ordinance, as well as to authorize a banking corporation to place on the agenda of the general meeting a shareholder’s proposal to terminate the term of said

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 18 ONLY THE HEBREW VERSION IS BINDING outside director, if the shareholder is entitled to do so according to the Companies Law and the banking corporation’s rules. (e) In exceptional cases, the Supervisor is entitled to approve a candidate for the position of “outside director,” even if not all the conditions listed in subsection 24(b) above are fulfilled, provided that if it is an outside director who was appointed in accordance with the Companies Law or an independent director appointed under the Companies Law, all the conditions set for such a case in the Companies Law are fulfilled. The board’s qualifications 25.In addition to the conditions for qualifications applying to each of the directors, as listed in Section 30, the board of directors shall collectively possess proper knowledge, qualifications, expertise and experience that are in accordance with the banking corporation’s strategy and types of activity, provided that the following conditions are fulfilled:
(a) At least a third of directors shall have proven “banking experience.” For this purpose, “have banking experience” means someone who:
i. Has served at least three years in a senior position in a bank or in a foreign
bank, and who dealt with management or control of a core area or of material risk to the banking corporation in which he or she serves as director. “Senior position” in this Section—a manager reporting directly to the CEO as well as one reporting to a manager as described in the first section, including an internal auditor.
ii. Has served as a partner responsible for managing an audit at a banking
corporation, including knowledge of building SOX processes during a cumulative period of at least 5 years, at an accountant-auditor’s office (contingent on the existence of independence rules set in the Proper Conduct of Banking Business Directives of the Supervisor of Banks, and the provisions of any laws).
iii. Has served as a director at a banking corporation during a cumulative period
of at least 9 years or as Chairman of a board during a cumulative period of at least three years.
iv. Someone whom the Supervisor of Banks has authorized as having parallel
experience.
For banking corporations that are not banks, or banking corporations that are subsidiaries of a bank, at least one fifth of all directors shall have banking experience. (b) At least a fifth of directors shall have “accounting and financial expertise” as used in Section 240 of the Companies Law. (c) At least half of all directors shall have professional qualifications as noted in Section 24(b)(1)(ii). (d) At least one director shall have knowledge and proven experience in information

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 19 ONLY THE HEBREW VERSION IS BINDING technology sectors. This subsection shall not apply to banking corporation that is a subsidiary of a banking corporation and receive information technology services from the banking corporation that controls it. (e) To remove all doubt, a director who has several of the qualifications required in this
section, can be counted as one of the directors required by those sections.
Knowledge of Hebrew
26. (a) The directors shall be fluent in the Hebrew language, at least at the reading and
speaking level, to an extent that will make it possible to read background information for meetings and active participation in discussions. (b) The Supervisor may, in exceptional cases, exempt a director from the requirement noted in section (a). Reapproval of appointment as director
27. Repealed.

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Chapter 4: Chairman of the board of directors
Chairman of the board of directors
28. The board of directors shall be headed by a chairman.
The chairman of the board of directors is the person responsible for the proper functioning of the board of directors and for its meeting the obligations imposed on it. The chairman makes a significant contribution to maintaining the balances and the brakes in a banking corporation’s corporate governance regime, between the board, senior management, holders of control, and other parties at interest. The chairman of the board must have appropriate experience, ability and personal abilities in order to fulfill the role. (a) All the obligations of a director shall also apply to the chairman of the board of directors. (b) The chairman is to encourage holding open discussions that allow the expression of differing opinions and to take care that decisions are made on the basis of adequate information. (c) In the absence of the chairman of the board of directors, his place shall be taken by one of the members of the board of directors. (d) The owner of a controlling interest in the banking corporation, or his relative, shall not serve as chairman of the board of directors. (e) An outside director shall not serve as chairman of the board of directors in a banking corporation with a controlling core. (f) A person shall not serve as chairman unless he participates on a regular basis in board meetings. (g) The board of directors shall establish policy for the maximum term of the chairman of board. (h) The board of directors shall define the functions and authorities of the Chairperson of the Board in such manner that they shall not deviate from the functions and authorities accorded to him under the provisions of the Law, such that there will not be an intertwining of his functions and manner of carrying them out and the functions of the management, so that his independence from the banking corporation is not adversely impacted and in a manner that shall not derogate from the functions of the board and will not decrease the obligations and responsibilities of the other directors, and in a banking corporation without a controlling core – so that a connection will not be created between him and the banking corporation. Without derogating from the above generality, in the definition of the board chairperson’s functions and powers, the board shall take care that the provisions of Section 95(b) of the Companies Law and Sections 57(c) and (d) are in place. In general, to the extent that the chairperson’s activity is more integrated and involved with the functions of the banking corporation, and to the extent that the scope of his connections with the bank’s management is higher, the more there is a concern that his independence is

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 21 ONLY THE HEBREW VERSION IS BINDING impaired. (i) In addition to what is determined in Subsection (h), the Board may impose on the board chairman to carry out any activity that the board is allowed to authorize one of its members to carry out that is related to the board’s work, including:\ (1) to serve as chair of a candidate search committee for the position of CEO of the banking corporation; (2) to represent the board to outside functions for issues related to the board’s work and its functions. (j) the board shall define the scope of time that the chairperson of the board must dedicate to carrying out his functions. Nonresident chairman of the board of directors
29. Repealed.

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Chapter 5: Eligibility to serve as director
Eligibility of director
30. (a) A director in a banking corporation shall be an individual.
(b) Each director shall possess appropriate qualifications for his position, including education, knowledge, experience, or expertise in one or more of the following spheres: banking, finance, economic or business activity, law, funding, accounting, risk management, regulatory compliance, information technology, information security (including cyber security) accounting, or any other sphere authorized by the Supervisor. Permanent conflict of interests
31. (a) A person shall not serve as a director if his business or regular occupations create a
permanent conflict of interest between him and the banking corporation, or if it is reasonable to assume that such conflict may arise permanently. (b) Without derogating from the above, a person serving as a director or member of an investment committee, credit committee or employee (in this Section, all these— office holder) in the following entities shall not be appointed or serve as a director of a banking corporation:
(1) A different banking corporation or a different corporation controlled by a different banking corporation or a corporation which controls another banking corporation, if these are not part of the same banking group or its controllers; It is clarified that the above does not serve as permission for the prohibited tenure noted in Section (b)(2) below. (2) A corporation (whether or not it is a banking corporation) controlled by the banking corporation; In order to remove all doubt, the stipulations of this section do not apply to simultaneous tenure in affiliated companies in the same banking group, provided that between the two there is no permanent conflict of interest. (3) A financial entity or corporation which controls a financial entity, in a case where the banking corporation is large, or that the financial entity is large. Notwithstanding the above, the tenure or appointment of a director in a large banking corporation simultaneous to his tenure as an office holder in a financial entity or in a corporation which controls a financial entity, and vice versa, shall be permitted. For the purpose of this section, in a case where the candidate serves at a large banking corporation simultaneously to his candidacy or tenure in several small financial entities in the same group, such simultaneous terms will not be permitted if the total assets of those financial entities in the same group, in which the office holder serves or is a candidate to serve, is greater than NIS 2 billion. In a case in which during a tenure which is permitted according to this

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Section, one of the conditions prohibiting such simultaneous tenure
begins to come about (hereinafter in this Section, “the date of change”), the director shall be permitted to continue to serve the simultaneous term until the end of 6 months from the date of change or until the next annual meeting, the later of the two, and for an outside director, until the completion of 3 years of tenure. (b1) No more than two directors shall serve in any banking group simultaneously with their tenure as office holders in any of the entities noted in Appendix C which belong to the same group. It is clarified that the above does not constitute permission for tenure which is prohibited under sections (b)(1) and (b)(3) above. For the purpose of this subsection:
“Financial entity”
Any of the following:
(1) An institutional entity as defined in the Supervision of Financial Services (Insurance) Law, 5741–1981; (2) A mutual fund investment manager as defined in the Mutual Funds Law, 5754–1994. “Small financial entity” A financial entity with not more than NIS 2 billion in total assets. “Large financial entity” A financial entity with more than NIS 10 billion in total assets. “Total assets” Based on the most recent annual report, including assets managed by it for others and assets of financial entities under its control. “Employee” Includes one with whom the entity has a permanent professional relationship. “Group” or “Banking Group” Banking corporations or entities noted in
Appendix C, which are controlled, directly or
indirectly, by the same controlling entity.
“Small banking group”
A banking corporation whose total balance sheet assets, on a consolidated basis, are not more than NIS 2 billion. “Large banking group” A banking corporation whose total balance sheet assets, on a consolidated basis, are more than NIS 10 billion. (c) A person shall not be appointed a director if he was a director of another banking corporation and less than a year has passed since he ceased to serve as a director there, unless the consent of the board of directors on which he previously served is obtained and provided that at least half a year has passed from the end of his tenure

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 24 ONLY THE HEBREW VERSION IS BINDING as director at the other banking corporation. (d) The board of directors shall establish guidelines for cases in which potential for a permanent conflict of interest exists. These guidelines shall deal with the following matters, among others:
(1) The volume of business in which a conflict of interest exists; (2) The significance of the business in which a conflict of interest exists between the banking corporation’s business and that of a director; Other occupations
32. A person shall not serve as a director if his other occupations do not leave him sufficient
time to fulfill his duties in that capacity.

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Chapter 6: Board of directors’ committees
Mandatory committees
33. Pursuant to the stipulations of Section 21, the board of directors shall appoint the
following committees:
(a) An Audit Committee, as described in Sections 35 and 36; (b) A Remuneration Committee, as described in Section 38; (c) A Risk Management Committee, as described in Section 39. (d) An Information Technology and Technological Innovation Committee, as described in Section 39a below. This subsection shall not apply to a banking corporation that is a controlled banking corporation and receives information technology services from the banking corporation that controls it. Composition and work methods of board of directors committees
34. (a) In addition to required committees, as noted in Section 33, board of directors
committees and the areas of their responsibility shall be set based on the bank’s characteristics, including its size, size of the board of directors, its strategic goals, activity environment, and risk profile. (b) The board of directors’ committees shall consist solely of directors, and the number of committee members shall be not less than 3 and not more than 7 directors. The composition of committees shall be based on the ratio established in Section 24(a), and the provisions of Section 28(d) shall apply regarding the appointment of a committee chairman. (c) Regardless of the stipulation of subsection (b), the following committees shall have a majority of outside directors:
(1) Audit committee;
(2) Committee for transactions with related parties (if established). (3) Remuneration committee, except as noted in Section 38(f). (d) In placing directors on the various committees, the board of directors shall take into account the directors’ qualifications and experience and the subject in which the committee specializes; (e) The board of directors shall establish policy regarding the maximum term of service of committee chairpersons, and shall examine the need for rotation among the committee members; (f) The provisions of Chapter 7 regarding board of directors meetings shall apply to board of directors committees, unless expressly noted that the provision applies only to the plenum of the board of directors. Audit committee—composition and work methods
35. (a) The board of directors shall appoint an “audit committee” and the provisions of

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Section 115 of the Companies Law, and the provisions in Section H of Chapter 3
of Part 3 of said law, with required changes, shall apply to it, as shall the stipulations of this directive. However, in a banking corporation which is a private company, a director who is employed by the banking corporation which controls on its own the said banking corporation or is employed by another corporation controlled by the said controlling banking corporation may serve on the audit committee. (b) In addition to the stipulations of Section 34(c)(1), the chairman of the audit committee shall be an outside director, and at least two members shall have accounting and financial expertise. (c) The legal quorum for meetings and decisions of the audit committee is a majority of its members, provided that a majority of them are outside directors. (d) If the chairman of the audit committee does not call a meeting within a reasonable amount of time, after being requested by the internal auditor to do so for the purpose of discussing a subject specified by the internal auditor in the request, as stated in
Section 116(b) of the Companies Law, he shall keep detailed documentation of his
reasons for not calling the said meeting, and shall inform the board of directors of those reasons. (e) At least once a year, the audit committee shall hold a meeting with the holders of each of the following positions, attended only by the members of the committee and the position-holder:

The internal auditor;
The external auditor;
The compliance officer, as defined in Proper Conduct of
Banking Business Directive 308;
The legal counsel;
The chief accountant, as defined in Proper Conduct of Banking
Business Directive 305;
The person responsible for prohibition of money laundering
appointed under Section 8 of the Prohibition on Money Laundering Law, 5760–2000;
The Chief Risk Officer, as defined in Proper Conduct of
Banking Business Directive 310.
(f) Decisions at the meetings of the audit committee and the committee for transactions with related parties shall be taken when only the committee members, and office holders whose presence is permitted by the Companies Law, under conditions set there, are present. (g) The audit committee shall hold at least six meetings a year. (h) The audit committee shall determine the budget that it needs to employ independent outside consultants, insofar as it deems this necessary in order to fulfill its duties. Audit committee—functions

(a) The audit committee is responsible for dealing with internal and external audit

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 27 ONLY THE HEBREW VERSION IS BINDING reports, as follows:
(1) The audit committee shall discuss and make decisions concerning the findings of internal and external audit reports brought before it. The committee must make sure that discussion of the findings takes place within a reasonable time following the date of their submission by the auditors:
(i) Internal audit reports - The chairman of the audit committee, in consultation with the internal auditor, shall determine which material internal audit reports shall be brought in their entirety before the audit committee. The committee is entitled to decide that the other audit reports by the internal auditor shall be brought before it in summary or in full, as it sees fit. (ii) External audit report – The committee shall discuss audit reports by the Supervisor, other supervisory authorities, and the external auditor. Where the Supervisor’s audit report is concerned, the discussion shall take place no more than 45 days after the banking corporation receives the report. The stipulations of Proper Conduct of Banking Business Directive 303 shall apply to the detailed report and supplementary report by the external auditor. (2) The audit committee, in consultation with the chairman of the board of directors, shall bring material internal audit reports before the plenum of the board of directors for discussion. (3) The audit committee shall make sure that management has taken the proper measures at the necessary time to correct the deficiencies noted in the audit report. (4) The audit committee shall discuss the reporting of the internal auditor once every six months, including the requirements arising from external audit reports, handling of which has not yet been completed, and the stage reached in handling them. In cases of a delay in handling them, the committee shall discuss the reasons for the delay and the timetables for completing this handling. (b) The audit committee is responsible for overseeing the internal auditor of the banking corporation, including:
(1) The internal auditing function shall be subordinate to the chairman of the board of directors, and shall report to the board of directors through the audit committee. (2) The audit committee shall make recommendations to the remuneration committee regarding the salary, remuneration, and promotion of the internal auditor. (3) The audit committee shall discuss and make a recommendation concerning approval of the internal auditor’s work plan, including the scope and frequency of his audits. For this purpose, the audit committee must address the desired

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 28 ONLY THE HEBREW VERSION IS BINDING framework for internal auditing in controlled corporations in Israel and overseas, among other things. (4) The audit committee shall monitor implementation of the internal auditor’s work plan. (c) The audit committee shall be permitted to impose the carrying out of special examinations on the internal audit function, with reasonable notice, in addition to examinations established in the function’s work plan. (d) The audit committee is responsible for overseeing the work of the external auditor of the banking corporation, including:
(1) Discussing the possibility of replacing the banking corporation’s external auditor, as described in Section 4 of Proper Conduct of Banking Business Directive 302; (2) Bringing its views before the general meeting of the banking corporation when the end of the external auditor’s term or failure to renew his term is on the meeting agenda; (3) Making recommendations to the banking corporation’s general meeting or the board of directors concerning the remuneration of the external auditor; (3a) Implementing the Basel Committee guidelines regarding external audit at banking corporations concerning the audit committee and its relations with the external auditor, as detailed in BCBS : External audit of banks, Part 1, Section A, March 2014, with adjustments required by any law. (4) Additional instructions concerning the audit committee’s overseeing of the external auditor, his reports, and the agreement with him shall be as explained in other Proper Conduct of Banking Business Directives (e.g. Directives 302, 303, and 304a). (e) The audit committee shall evaluate the banking corporation’s annual and quarterly reports to the public, and shall discuss and make recommendations concerning their approval. (f) The audit committee shall make use of the audit functions’ work in its evaluation of the effectiveness of the key internal controls in the banking corporation. For the purpose of evaluating the effectiveness of internal controls for financial reporting or auditing, the audit committee shall establish procedures to arrange the following, among other things:
(1) The way in which the banking corporation receives and processes complaints concerning matters pertaining to its financial reporting and the internal controls over it, or to auditing; (2) Anonymous and confidential transmission, including by employees of the

 In implementing the Basel Committee’s guidelines, instead of referrals to accepted international auditing standards, auditing standards accepted in Israel shall be applied, including standards established in Accountants’ Standards (accountant’s work method), 5733-1973, and certain auditing standards whose implementation in auditing was determined according to the directives of the Supervisor of Banks and the Supervisor’s guidelines.

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 29 ONLY THE HEBREW VERSION IS BINDING banking corporation, of concerns relating to a disputed financial report or audit. (g) The audit committee shall discuss transactions as mentioned in Section 7 of Proper Conduct of Banking Business Directive 312, if the committee for transactions with related parties has not discussed them. Committee for transactions with related parties
37. (a) The board of directors is entitled to appoint a committee for transactions with
related parties to discuss the subjects specified in Section 7 of Proper Conduct of Banking Business Directive 312 and in subsection 36(f) above that have not been discussed by the audit committee. (b) The provisions and restrictions applying to the audit committee shall also apply respectively to the committee for transactions with related parties. Remuneration committee—composition and work methods
38. (a) In a banking corporation to which Section 118a of the Companies Law applies, a
remuneration committee shall be appointed, as per the noted section in the Companies Law, and at least one of the committee members shall have expertise and experience in risk management and control activities. (b) In a banking corporation to which Section 118a of the Companies Law does not apply, a remuneration committee shall be appointed of which most of its members shall be external directors, the chairman shall be an external director, and at least one of the committee members shall have expertise and experience in risk management and control activities. (c) An audit committee which fulfills the terms noted in subsection (a) or (b) regarding the composition of the remuneration committee, as relevant, excluding the requirement that at least one committee member have expertise and experience in risk management and control activities, may serve as remuneration committee as well. (d) The lawful quorum for remuneration committee meetings and decisions shall be a majority of its members, provided that most of them are outside directors. (e) Decisions in meetings of the remuneration committee shall be made in the presence of only committee members, and office holders whose presence is permitted under the Companies Law, under the conditions set there. (f) Notwithstanding the provisions of subsections (a) and (b) above, a banking corporation is permitted to add to the remuneration committee additional directors as committee members at discussions on remuneration policy and remuneration agreements with the overall workforce, except for key employees. The expanded remuneration committee shall not be required to have a majority of outside directors. Remuneration Committee—functions 38a.

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 30 ONLY THE HEBREW VERSION IS BINDING (a) The remuneration committee shall discuss and recommend a remuneration policy (as defined in Proper Conduct of Banking Business Directive 301A) to the board of directors, which is consistent with the banking corporation’s organizational culture, long term objectives and strategy, and with its control environment. Remuneration incentives shall not encourage taking risks beyond the corporation’s risk appetite. (b) The committee shall approve, prior to the board’s approval and the general meeting, if required, the specifications of the contract between the banking corporation with senior office holders with regard to their remuneration as these concepts are defined in Proper Conduct of Banking Business Directive 301A, with reference as well to issues noted in Section A and
Section B of First Addendum A in the Companies Law; and the committee shall also
recommend remuneration agreement principles to the board for banking corporation employees (who are not senior office holders), in order to ensure that the agreements are balanced and do not endanger the robustness and stability of the banking corporation. The committee’s recommendations shall be detailed. (c) The committee shall be responsible for planning the remuneration policy and shall submit its assessment to the board regarding the effectiveness of the policy and remuneration mechanisms and meeting regulatory requirements. The committee shall pay particular attention to the assessment of implemented mechanisms, among other things, in order to verify that they reflect all manner of risks, and capital and liquidity levels. In addition, with regard to anything related to indemnification and insurance, the committee shall consider updated figures on all commitments to indemnify, and amounts of insurance of office holders existing in the banking corporation, as well as estimates of the alternative cost to commitment in advance to indemnify (such as the cost of premiums charged by insurance companies for a policy identical to the indemnification terms). (d) The committee shall formally examine how the remuneration mechanism will react to future occurrences, external or internal, via an analysis of a range of scenarios. (e) The committee shall define what periodic reports shall be submitted to it, including their content and frequency. In addition, the committee shall define the detailed information that shall be submitted to it ahead of a discussion regarding the contract with an individual employee or group of employees in terms of remuneration (as defined in Proper Conduct of Banking Business Directive 301A). Among other things, it shall be defined that before providing a recommendation or approval as noted in subsection (b), the committee must be provided with, a reasonable time in advance of the meeting in which these topics will be discussed, the main points of the previous contract and agreements and the main points of the proposed contract and agreements. (f) The committee shall verify that at least once yearly there shall be an examination of the remuneration mechanism and its operation. The examination shall analyze, among other things:
1.
The remuneration mechanism’s meeting the policies established by the board.
2. The remuneration mechanism’s meeting the requirements established in this

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 31 ONLY THE HEBREW VERSION IS BINDING Directive and in Proper Conduct of Banking Business Directive 301A and the requirements of all laws, and if it meets generally accepted practices.
3. The completeness of the remuneration mechanism.
4. The extent of the impact of the remuneration mechanism on the risk profile and
on employees’ conduct, and the extent that it is in line with the banking corporation’s organizational objectives and risk appetite. (g) The committee shall work in tight collaboration with the board of directors’ risk management committee and the audit committee. (h) The committee shall have unlimited access to data and analyses of the risk management and control, compliance, internal audit, and human resources functions, and shall be assisted by these functions in its discussions. (i) The committee shall be able to make use of external consultation. The consultants shall be appointed in a manner which ensures that the consultation provided by them is independent of any consultation received by senior management, and shall not create a conflict of interest for any reason whatsoever. Risk management committee
39. The risk management committee shall act as required under Directive 310, and in
addition:
a. Discuss and formulate recommendations to the board of directors regarding the Internal Capital Adequacy Assessment Process (ICAAP) as noted in Section 6(g); b. Maintain an ongoing contact with the Chief Risk Officer and with other audit and control functions in order to be updated on the current risk profile, risk appetite, limitations and deviations from them, and risk mitigation plans;
c. Maintain a work interface with the board’s audit committee on
material issues that are relevant to its areas of responsibility; d. Verify that new or developing risks are being handled as required and that the banking corporation’s management allocated adequate resources to them. Information Technology and Technological Innovation Committee 39a. (a) The board of directors shall appoint an “Information Technology and Technological Innovation Committee”, and at least one committee member shall have knowledge and proven experience in the information technology area. (b) The Committee shall maintain a contact with the Information Technology Manager and the Information Security Manager, as the positions are described in Proper Conduct of Banking Business Directive no. 357, with the Cyber Security Manager as defined in Proper Conduct of Banking Business Directive no. 361, and with the function responsible for the innovation area.

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 32 ONLY THE HEBREW VERSION IS BINDING (c) The Committee shall discuss and make recommendations to the board on the following issues:
(1) IT policy and strategy and its management, including cyber and information security, the banking corporation’s technological infrastructures, use and management of databases, technological innovation to support business innovation, and their alignment with the overall strategy and policy of the banking corporation. (2) The manner of the banking corporation’s preparation for banking of the future and business–related handling of the challenges of technological innovation in general and disruptive innovation in particular. (3) A framework for managing technological risk, including cyber and information security risk and innovation risk. (4) A disaster recovery plan and the extent of its alignment with the framework principles for managing business continuity. (5) Annual work plan and goals. (6) Adequate allocation of resources for realizing the banking corporation’s planned activity in the area of information technology, information management, and innovation. (d) The Committee will coordinate and maintain a work interface with the other board committees, as relevant, so that an issue discussed in one committee does not necessarily have to be discussed in another as well. (e) Whenever required by various Proper Conduct of Banking Business Directives to hold a discussion with the board plenum on issues related to information technology, the Committee shall hold a preliminary discussion as needed and shall submit its recommendations to the board plenum.

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Chapter 7: Meetings of the board of directors
Frequency of meetings
40. (a) As a rule, the plenum of the board of directors of a banking corporation shall meet
at least once a month. If the substance and scope of the banking corporation’s transactions do not justify this, it is entitled to decide, with the approval of the Supervisor of Banks, that the meetings of the board of directors will be less frequent than specified in this subsection, but not less than one meeting every quarter. (b) A banking corporation shall convene a meeting of the plenum of the board of directors in instances specified in Section 98(b)-(d) of the Companies Law within 14 days of the relevant date, according to the case. Attendance at meeting of the board of directors
41. (a) A director shall physically attend at least two-thirds of the meetings of the plenum
of the board of directors during a calendar year, and shall not be absent from all meetings of the plenum during three consecutive months. (b) A director who has been absent from meetings beyond the limits established in subsection 40(a) above shall resign his position, and his resignation shall become effective no later than the date of the first meeting of the board of directors after the permitted number of absences was exceeded (hereafter – the date on which his term ends). If such a director does not resign by the date on which his term ends, his term shall expire on the date his term ends. (c) Notwithstanding the provisions of Subsection (a), participation in a meeting via the use of advanced means of communication shall be viewed as physical attendance for the purposes of complying with the participation obligation established in this
section, provided that the share of meetings in which such participation is carried out
does not exceed 25 percent of the number of meetings in the calendar year. In regard to this section, “advanced means of communication” – means that make it possible for all participants in the meeting to see and hear each other simultaneously. Notices and background material for meetings
42. (a) Notice of a board of directors meeting shall be transmitted to all the directors within
a reasonable time period prior to the meeting. The notice shall specify the time and place of the meeting, as well as reasonable details about all the subjects on the agenda. (b) Notice as stipulated in the preceding subsection 42(a) shall be accompanied by written background material that includes, among other things, its significance and consequences, including financial ones, and that enables the subjects for discussion to be addressed in a serious manner in the framework of the meeting. This background material shall be kept in the offices of the banking corporation, together with the minutes of the meeting at which the subjects to which it refers are discussed. (c) Only in exceptional cases will the board of directors be entitled, with the consent of

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 34 ONLY THE HEBREW VERSION IS BINDING all its members, to hold a meeting without notice as specified in subsections 42(a)- (b) above, provided that the minutes of the meeting state the exceptional circumstances for holding a meeting without notice as mentioned above. Legal quorum and voting
43. (a) The legal quorum for a meeting of the board of directors and its decisions is a
majority of its members, provided that the ratio among the directors is as stipulated in sections 24(a) and 26. In a case of a committee consisting of only three directors, the legal quorum shall be all its members. (b) Each director shall have only one vote in the board of directors voting. Nothing in this section shall prevent the granting of an additional vote to the chairman of the board of directors in a tie vote, in accordance with Section 107 of the Companies Law. (c) A director absent from a discussion for personal reasons, as described in Section 56, shall not be counted for the purpose of determining the legal quorum required for that discussion. Agenda
44. The agenda of the board of directors’ meetings shall include, inter alia, every subject that
a director or the CEO asks the chairman of the board of directors to add to the agenda, if the request is made a reasonable length of time before the board of directors meeting convenes. Minutes
45. (a) The chairman of the meeting shall be responsible for recording the minutes of the
discussion. For the purpose of compiling the minutes, the chairman shall make sure that meetings of the board of directors are recorded and transcribed. (b) The minutes shall reflect the subjects discussed at the meeting, the main points raised and by whom, as expressed during the meeting, the wording of the decisions taken in the meeting, and the point at which each participant entered and left the meeting. (c) The board of directors shall determine guidelines for approving the minutes provided that:
(1) The minutes are brought up for approval by the board no later than the next meeting or 60 days after the meeting to which the minutes refer, whichever is later. (2) Three business days after the meeting, the chairman distributes to the directors and the relevant parties a draft document listing the decisions taken at the meeting. (d) The documents that served as background material for the board of directors’ decisions shall be attached to the minutes. Participation of the internal auditor in meetings

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46. The plenum of the board of directors must invite the internal auditor to attend a meeting
in which a subject involving the internal audit is discussed, a meeting at which the audit reports of the external auditor are discussed, and a meeting at which audit reports of the supervisory authorities are discussed. Determining additional work procedures
47. Repealed.
Substitution and observation
48. A substitute or observer director shall not be appointed in the board of directors of a
banking corporation. With that, a director is permitted to participate in a meeting of a board of directors committee on which he is not a member, provided that his participation is not permanent. Holding meetings via communications media
49. The board of directors shall establish procedures for holding meetings via advanced
means of communication, as defined in Section 41(c); these procedures shall include the following items:
(a) Only in special situations is it permissible to hold meetings of the board of directors without convening a frontal meeting, but via advanced means of communication (henceforth – meeting via communication media). (b) The board of directors of a banking corporation shall define in a detailed procedure the way a communication meeting shall be held, e.g., its initiation, quorum, background material, decision-making (including when members object to the proposal or to the urgency of the subject), documentation - including minutes - and any other matter determined by the board of directors. The procedure shall state the efforts to be made to involve all the members of the board of directors in the communications media meeting; (c) The decisions of the meeting via communications media should be shown to the relevant forum at the first (frontal) meeting held after the decision was taken, and the minutes of the discussion immediately after its completion; (d) Cancelled. Making decisions without convening
50. A board of directors that is entitled under its articles of incorporation to make decisions
without holding an actual meeting, given the consent of all the directors entitled to participate in the discussion and vote on the subject to be decided, shall not be entitled to take decisions in this manner, except in special instances, while specifying the exceptional circumstances in the minutes of the decision.

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Chapter 8: Practices for Effective Functioning of the Board of Directors
Work procedures
50a. The board shall take care to anchor its areas of responsibility and its functions, derived from this Directive and from any other relevant law or directive, in clear work procedures. These procedures are to include, among other things, the structure of the board of directors and its committees, the board’s work processes and means taken to confirm appropriate coverage and the allocation of sufficient time to significant issues. Requirements of a director
51. Each director shall:

Understand and carry out his duties, including his supervisory duty, while
understanding the risk profile of the banking corporation.
Exercise appropriate judgment in the affairs of the banking corporation.
Devote enough time and effort to fulfilling his responsibility.
Ask questions and insist on comprehensive and direct answers from management in
a manner enabling him to properly evaluate the banking corporation’s performance and the functioning of its management.
Comprehend the regulatory environment and its role in corporate governance.
A director’s right to receive information
A director who wishes to utilize his right to receive information in accordance with
Section 265 of the Companies Law shall submit a written request for information, which
will be discussed by the board of directors.
Professional assistance for the board of directors
The board of directors is entitled to employ external consultants, if the circumstances
warrant this measure, as follows:
(a) Assistance for a director - A director who wishes to exercise his right to employ consultants in order to receive professional advice in accordance with Section 266 of the Companies Law shall first submit an annotated request for reimbursement to the board of directors. If the board of directors rejects his request, he shall transfer it to the Supervisor of Banks at least 21 days before petitioning the courts to approve his request to employ the expert. (b) Assistance for the board of directors – The board of directors shall establish procedures for agreements with external consultants for the purpose of obtaining professional assistance for the board of directors and its committees, provided that these procedures address the following matters, at a minimum:
(1) Approval of the consultant (e.g., discussion of the need for consultancy and defining its purpose and the content of the consultant’s work); (2) Choosing the consultant (e.g., investigating alternatives, professionalism, absence of conflicts of interest);

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 37 ONLY THE HEBREW VERSION IS BINDING (3) Agreement and mode of working with the consultant (e.g., budget, fees, duration of the agreement, professional responsibility, and confidentiality). In cases involving long-term or repeat consultancy, the need to renew the agreement and rotation should be periodically considered. Signatory rights
54. (a) A director shall not have signatory rights on behalf of the banking corporation in
its day-to-day business.
(b) If the plenum of the board of directors believes that signatory rights should be granted to a director with regard to a specific matter, it shall authorize that director to sign specifically for that matter, in which case a senior office-holder in the banking corporation shall have counter-signatory rights. (c) The contents of this section do not apply if the signature of a director is required by law (e.g., signature on a financial statement, prospectus, etc.). Sector conflict of interest
55. (a) Without detracting from the general rule on conflict of interest, a director with
linkage to a corporation in a subsector shall not be present at the discussions of the board of directors or its committees involving a customer of the banking corporation that is a corporation in the same subsector, and shall not receive information and reports from the banking corporation relating to that customer. (b) If there is any doubt as to the formulation of the quantitative tests mentioned in subsection (d), the director shall be exempt from the provisions of subsection (a) if a committee consisting of three outside directors has discussed the case and decided unanimously that in that case not to classify the linkage of the director to the corporation in the subsector. Likewise, the said committee shall consider in cases in which the quantitative tests do not exist, if given the conditions in the case, a cautious approach should be taken and the director viewed as one with linkage to a corporation in a subsector. (c) The banking corporation shall make a list, to be updated every six months, of the names of the directors in linkage with a corporation in a subsector. (d) For the purpose of this section:
“Subsector” - Any subsector of an economic industry, according to the uniform classification of economic industries by the Central Bureau of Statistics. “Corporation in a subsector” – A corporation whose volume of business (whether direct or via subsidiaries) in a specific subsector constitutes 5 percent or more of the total volume of business in that subsector (measurement of the total volume of business in a sub-sector shall be based on the accepted measure in that sector, such as the balance sheet total or revenues). “Director with linkage to a corporation in a subsector” – A director fulfilling one of the following conditions:
(1) He holds at least 5 percent of the controlling interest in a corporation in a sub-

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56. (a) A director with a direct or indirect personal interest in an existing or proposed
transaction of the banking corporation brought before the board of directors for discussion, or in a decision that the board of directors is scheduled to make, shall declare his personal interest without delay, no later than the board of directors meeting at which the transaction is first discussed. (b) From the date of his declaration, a director with a personal interest as stated in the preceding subsection (a) shall not receive from the banking corporation information concerning that interest, shall not be present at a discussion concerning his interest, and shall not vote on a decision in this matter. (c) The board of directors shall establish guidelines for cases in which a director has a personal interest, including the specific examples (e.g., the type of relationship and the association with the transaction and the significance of that association), and shall establish rules of behavior in each of the cases. (d) The provisions of this section shall also apply, with appropriate changes, to an officeholder at a banking corporation who is not a director. Relations with employees of the banking corporation outside of meetings
57. (a) A director shall not approach an employee of the banking corporation regarding the
banking corporation’s business issues other than in the framework of meetings of the board of directors or its committees, particularly concerning the following matters:
(1) Business ventures for the banking corporation.
(2) Business affairs of specific customers.
(3) Specific investments of the banking corporation.
(b) The stipulations of the preceding subsection (a) shall not apply in the following cases:
(1) A business transaction in which the director has no personal interest, provided that the approach is made to the CEO and is documented; (2) Approaches described in paragraphs (2) and (3) of subsection 57(a) above, provided that the approach is made to the CEO and is documented. An approach by the chairman of the board of directors to the CEO is exempt from this documentation requirement. (3) Referral of potential customers to the banking corporation, provided that this referral is to the CEO, and the director does not discuss particulars of the transactions with potential customers and does not participate in such a discussion. (4) An approach to the appropriate person via the usual channels for clarification

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 39 ONLY THE HEBREW VERSION IS BINDING regarding a personal account held in that banking corporation, if the account belongs to the director, the director’s spouse, or a corporation controlled by them. (5) An approach made through the chairman of the board of directors or the chairman of a committee of the board of directors for the purpose of clarifying a matter directly related to a discussion in the plenum of the board of directors or one of its committees. The approach shall be documented, and a copy of the documentation shall be transmitted immediately to the chairman of the board of directors and the CEO. The chairman of the board of directors shall decide whether to circulate the documentation to the members of the board of directors or to the relevant committee. (6) An approach by the chairman of the board of directors or the chairman of a committee concerning the method of composing documents submitted to the board of directors or one of its committees before a meeting, as well as any `issue derived from the authority of his position as chairman of the board or of the committee, such as: setting the agenda for meetings. (7) An approach concerning general business matters and obtaining professional explanations, including in the area of risk management and control, provided that such approaches are reported to, and documented by, the bank secretary. An approach by the chairman of the board of directors is exempt from this reporting and documentation. Win regard to this section: “documentation”—documentation in writing, composed by the banking corporation employee close to the enquiry date, and that includes the names of the enquirer and employee and their positions, the date and nature of the enquiry, and to the extent possible also the nature of the action taken because of the enquiry. (c) A director shall not serve in an active position in the banking corporation, and shall refrain from participating in its regular management. (d) A director shall not be present at discussions of management and its committees, other than being present at a discussion dealing with the banking corporation’s overall strategy. Professional instruction and expertise
58. (a) The board of directors shall formulate and implement an annual plan of ongoing
professional training for directors, adapted to the development of the banking corporation, its strategy, and its inside workings. (b) The instructional program shall address professional topics and topics relating to the functions of the board of directors and corporate governance. (c) The instructional program shall take into account the needs of all the directors, and the individual needs of each director, including the needs of new directors. (d) The board of directors shall revise the instructional program according to the

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59. (a) Every two years, the board of directors shall conduct a process of self-evaluation
for its internal needs. This self-evaluation shall assess the effectiveness and efficiency of the board’s work, including the board’s structure, the composition of the committees, work processes, and identify weaknesses in its work. (b) The board of directors shall appoint an entity on its behalf to coordinate this process and the analysis of the findings (an outside party, the bank secretary, a board of directors committee, etc.). (c) The board of directors shall discuss the findings emerging from the evaluation process, and make changes as needed.

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Chapter 9: Reporting to the Supervisor of Banks
Frequency of reporting
60. The secretary of the banking corporation, or whoever has been appointed by the board of
directors, shall submit the following reports to the Supervisor of Banks:
(a) An annual report, as described in Section 61, to be submitted each year by the end of January for the year ended on the December 31 st preceding it. (b) A report of a non-routine event, as described in Section 62, to be submitted as soon as possible after the event. Annual reporting
61. The report shall comprise the following:
(a) The names of the directors and their places of residence; (b) The names of the members of the various board of directors committees; (c) The frequency with which meetings of the board of directors and its committees are held, as follows:
(1) The number and dates of meetings of the plenum of the board of directors during the past year, (2) A report of all the meetings of each of the board of directors’ (d) A description of the main occupation of each director and the names of the other corporations in which he or she is a director or the CEO. (e) Other details, as determined periodically by the Supervisor. Reporting an exceptional event
62. A report shall be submitted if one or more of the following occurs, and shall include the
relevant details listed below:
(a) A change in the composition of the board of directors or its committees, including a change resulting from the death, resignation, or dismissal of a director; this report should include a report to the Supervisor of Banks by the chairman of the board of directors regarding the reasons for the resignation or dismissal of the director, as well as a report to the Supervisor by the director regarding the reasons for his resignation or dismissal; (a1) Deviation from the policy regarding the gender diversity percentage that was established by the Board in accordance with Section 21b. (b) The appointment of a CEO, approval of executive appointments, and appointment of an internal auditor and external auditor and termination of their employment for any reason whatsoever; (c) Exceptional events reported to the board of directors that constitute a deviation from the proper conduct of banking business or an infringement of the provisions of any law, or materially damage the interests of the banking corporation’s creditors, customers or shareholders; (d) An announcement by the internal auditor of a failure to take appropriate steps to

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 42 ONLY THE HEBREW VERSION IS BINDING correct defects, in accordance with Section 46(b) of Proper Conduct of Banking Business Directive 307 regarding the “Internal Audit Function”; (e) An announcement of the termination of the employment of the internal auditor, or of his suspension, in accordance with Section 53 of Proper Conduct of Banking Business Directive 307 regarding the “Internal Audit Function”, as well as of the termination of employment of the Chief Compliance Officer and Chief Accountant (f) A report of the receipt of an announcement from the external auditor under Section 3(b) of Proper Conduct of Banking Business Directive 304; (g) A report of the approval of an action under Section 255 of the Companies Law; (h) A report of the approval of a transaction of a banking corporation that fulfills the stipulations of Section 270(1) of the Companies Law, and which constitutes an exceptional transaction under Section 272 of the Companies Law; (i) A report of a transaction under Sections 274–275 of the Companies Law; (j) Convening a meeting of the board of directors at the request of a director, as stipulated in Section 257 of the Companies Law. (k) A report of any of the following events: for the purposes of this section, “capital”— regulatory capital, per its meaning in Proper Conduct of Banking Business Directive 202 regarding “Regulatory Capital”. (1) A loss exceeding 5 percent of the banking corporation’s capital accumulated since the end of the last quarter for which a financial statement has been published; (2) A loss exceeding 1 percent of capital arising from a single action or transaction; (3) A loss by an overseas controlled corporation exceeding 3 percent of its capital, or in an overseas branch exceeding 3 percent of its notional capital arising from a single action or transaction, or a loss in a controlled corporation or branch exceeding 5 percent of the controlled corporation’s capital or the notional capital of the branch accumulated since the end of the last quarter for which a financial statement has been published, provided that the loss exceeds the equivalent of $1 million; (4) The classification of a debt as doubtful in part or in full, when the exposure value (prior to reducing the exposure via the qualification technique for credit risk mitigation in line with Proper Conduct of Banking Business Directive no. 203 on “the Standard Approach—Credit Risk) in the amount of 5 percent of the banking corporation’s capital; (5) An announcement by the external auditor under Section 6(c) of Proper Conduct of Banking Business Directive 302 (The external auditor of a banking corporation). (6) The exercise by the general meeting of the banking corporation of any authority of the board of directors under Section 52(a) of the Companies Law; (7) The exercise by the board of directors of the authority of the CEO under
Section 52(b) of the Companies Law;

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 43 ONLY THE HEBREW VERSION IS BINDING (8) The `annulment by the board of directors of a decision by the audit committee and/or the committee for transactions with related parties under Section 113 of the Companies Law. (l) Any other significant event, including an event requiring immediate reporting of an exceptional event under the requirements of any supervisory authority in Israel or overseas. Mode of reporting
63. The reports specified in this chapter shall be made in writing and shall be available for
perusal to all members of the board of directors.
Chapter 10: Miscellaneous
Documents of incorporation
64. (a) The documents of incorporation of the banking corporation and the corporations it
controls shall be amended as necessary in such a way as to adapt them to these regulations and the stipulations of the law. (b) Notwithstanding the contents of Sections 50(a) and 58(b) of the Companies Law:
(1) The general meeting of the banking corporation shall not assume the authority granted to another organ. (2) The authority of the CEO of the banking corporation shall not be transferred to the board of directors.

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Appendix A
Questionnaire for Candidate for Office in a Banking Corporation (Director, CEO, Internal Auditor, Legal Counsel, Other) Guidelines for Candidate

Answer all questions on the questionnaire and attach all the required documents. The
questionnaire shall be filled out by the candidate online, and he can receive assistance from the banking corporation. Sending the questionnaire and the appendices can be done by the banking corporation. If the answer to a given question is negative or the requested information is lacking, note this explicitly.
Terms in this questionnaire that are defined in the Banking (Licensing) Law, 5741-
1981 or the Banking Ordinance, 1941, shall carry the meaning given them in these statutes, except where explicitly stated otherwise.
The following are to be attached to the questionnaire solely in PDF format:
 a detailed curriculum vitae, updated as of the date on which the questionnaire is filled out,  a photocopy of both sides of the candidate’s ID card or, in the case of a noncitizen, his/her passport.  photocopies of diplomas from academic institutions  for a candidate who resided abroad over the past 10 years, we request to receive an updated authorization that there is no criminal record from the relevant law enforcement entity in the candidate’s area of residence. In countries where there is no law enforcement function, the candidate shall provide a lawyer’s certification that there is no such record in the said country.  A candidate declaration signed in the presence of a lawyer. The declaration shall be signed in Israel except in exceptional cases and in accordance with the Banking Supervision Department’s guidelines.  Consent to send information from the criminal register, in the format shown in the end of the questionnaire. The original signed consent is to be brought to the Banking Supervision Department.
The Banking Supervision Department may, at its discretion and to any extent that it
deems fit, avail itself of information beyond that provided by the candidate on the questionnaire.
A questionnaire that is improperly filled in, or to which the required references have
not been attached, is likely not to be reviewed by the Banking Supervision Department.

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6. Depending on the circumstances, the candidate may be required to provide the
Banking Supervision Department with further details, and the Banking Supervision Department may also seek to obtain information from other parties. Therefore, the period after the application date and before the additional particulars are obtained shall therefore not be counted as part of the days mentioned in Section 11a of the Banking Ordinance.
7. After the appointment, if a change occurs in the particulars in the questionnaire, the
change must be reported under Section 4(c) of Proper Conduct of Banking Business Directive no. 301 on the board of directors (hereinafter, Directive 301).
8. The candidate must note and detail all information that is likely to be relevant
to the review of his or her candidacy, even if he or she is of the opinion that it does not prevent the tenure.
9. The questionnaire is written in masculine but refers to both genders.

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General
1.1 Date questionnaire is filled in:_______________________
1.2 Banking corporation details
1.2.1 Name of banking corporation on application
1.2.2 Banking corporation code
1.2.3 Banking corporation type (Banking corporation with a controlling core; banking
corporation without a controlling core; payment services provider with prudential importance)
1.2.4 Is the candidate also nominated for positions at other subsidiaries of the banking
corporation? Yes/No—Detail if yes
1.2.5 Banking corporation contact person details
Name:
Function:
Phone:
Email:
1.3 Personal details of candidate
1.3.1 Gender: Male/Female/Other
1.3.2 First name: Hebrew:__________________ English:____________________________
1.3.3 Last name: Hebrew:__________________ English:________________________
1.3.4 Previous first name—Hebrew:__________________ English:____________________
1.3.5 Previous last name—Hebrew:__________________ English:____________________
1.3.6 Father’s name: Hebrew:English:________
1.3.7 Citizenship (if you have several, list all):______________________________________
1.3.8 Residency: _____________________________________________________________
1.3.9 Have you lived outside of Israel in the past 10 years: Yes/No/Provide details if yes–where
and for how long (months and years)
1.3.10 ID number (including control digit); for nonresident—passport number:
1.3.11 Date of birth: ____________________
1.3.12 Place of birth: ____________________
1.3.13 Residential address:
City Street House # Entrance Apt. Zip code
1.3.14 Telephone number: ____________________
1.3.15 Mobile telephone number: ____________________
1.3.16 Email address: ____________________

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1.3.17 Are you currently an employee or office holder in the banking group? Yes/No/If yes,
please provide details.
1.3.18 Do you hold a permit for holding means of control in the banking corporation or in a
bank holding corporation, as the terms are understood in the Banking (Licensing) Law? Yes/No/If yes, please provide details.
1.4 Office for which candidacy is submitted
1.4.1 Title of position (Chief Executive Officer [CEO], Chairperson of the board of directors,
Director, External director as per the Companies Law, External director as per Directive 301, Internal Auditor, Legal Counsel, Risk Management Officer, Compliance officer, Other office holder) ____________________
1.4.2 Brief description of the function and areas of responsibility (required to be filled out
when the function is not a standard name at banking corporations such as CEO, Chairperson of the Board, Director, legal counsel, risk manager, other office holder), Detail:
1.4.3 Type of request: (New appointment, additional tenure, acting, other)
1.4.4 Proposed appointment date____________________
1.5. Education
In this section please refer to all types of education. For each one, please fill out (and attach documentation):
Degree/academic certificate/other1
Main field of study
Major(s)/
Specialization(s)
Name and location of academic institution
Number of years of study
Year degree received a. b. c.
1.6. Employment
In this section refer to all positions 2 held in the past 5 years, including CEO, Deputy CEO, Chairperson of the Board, Director, External director, consulting services, unpaid positions, partnerships, initiatives, and roles in nonprofit organizations and in academic areas. For each one, please fill out the following details:

If there is no degree, please note explicitly.
If you served in several functions with the same employer over time, list all the positions in which you served, including the start and ending dates (months and years).

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 48 ONLY THE HEBREW VERSION IS BINDING Start Date End Date Position Employer Company No. Nature of Business For External Director Candidates – Estimated Asset Size Regulatory Supervision (if any) Main Responsibilities Additional Relationship with Employer / Controlling Shareholder Reason for Leaving A. B. C.
1.7 Holdings
Please list all entities in which you have been or currently are a controlling shareholder, or in which you hold five percent (5) or more of the issued share capital or voting rights, or in which you have the right to appoint one or more directors or the Chief Executive Officer, during the past five years. Entity Name Registration No. 3 Legal Form 6 Field of Activity 7 Type of Holding 8 Percent of Shares Held Start Date End Date A. B. C.

3 For an Israeli company—as it appears in the Companies Registrar, or other relevant listing; for a foreign company—note, by the number, the country of incorporation as well. 4 Equity holdings, controlled partnership, etc. 5 Resignation, layoff, end of contract, other. 6 Public company, private company, partnership, authorized dealer, etc. 7 Banking, clearing, insurance, investment, credit, finance, IT, communication, food, infrastructure, real estate, etc. 8 Based on the following options: Holder of control, party at interest, other.

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1.8 Additional Information
1.8.1 What is your level of familiarity with the directives of the Supervisor of Banks
and the requirements arising from the relevant laws, or other regulatory and professional directives, which will apply to you by virtue of your position as a director / internal auditor / other officer? ☐ Required to undergo training / ☐ Moderate familiarity / ☐ Extensive familiarity Please specify: _____________________________________________
1.8.2 Are you aware of any impediment that may limit your ability to comply with the
mandatory rules in accordance with Section 1.8.1 above?
☐ Yes / ☐ No
If yes, please specify: _____________________________________________
1.8.3 Do your other businesses leave you sufficient time to fulfill your function in the
banking corporation? Yes/No; If yes, please detail how you intend to separate the time between fulfilling your function at the banking corporation and your other businesses?
1.8.4 Please specify how your experience and the knowledge you have accumulated can
assist you in fulfilling the position and contribute to the management and operations of the banking corporation: _____________________________________________
1.8.5. If you are a candidate for the position of internal auditor, do you comply with
Section 14E(c) of the Ordinance regarding internal auditors?
☐ Yes / ☐ No If yes, please specify:
1.8.6 Please detail any other relevant information—note and detail any information
that could be relevant for examining your candidacy, even if you feel that it is not sufficient to prevent your candidacy (such as lawsuits and personal or professional connections_________________________.
2. Personal and professional integrity
To the extent that the Banking Supervision Department may receive, based on the Criminal Data and Rehabilitation 9 Law, 5779-2019, and the Regulations enacted as a result, please indicate whether any of the following occurred in the past? If so, please provide details and attach a photocopy of the ruling, judgment, or court decision in the relevant cases. In accordance with Section 4 of the Criminal Data 10 and Rehabilitation 10 Law, every person may view any criminal information on themselves. You may attach information about rehabilitation

9 The Criminal Data and Rehabilitation Law, 5779-2019 10 Information from the Criminal Register and from the police register.

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2.1 Have you been convicted of an offense in a court of law in Israel unless the period of
record deletion under the Criminal Data and Rehabilitation 10 Law has elapsed or in a court of law abroad? Yes/No Detail: ____________________
2.2 Have you been served an indictment that is pending? Yes/No Detail:

2.3 Are there any pending criminal investigations against you concerning felony or
misdemeanor offenses? Yes/No Detail: ____________________
2.4 Were you required to pay a forfeit? Yes/No Detail: ____________________
2.5 Was a financial or other type of sanction imposed on you, including in an administrative
proceeding? 11 Yes/No Detail: ____________________
2.6 Has a derivative claim or class action lawsuit been filed against you?
2.7 Were you, or are you, a controlling party or senior office holder (director, CEO or one
employee level below) in a company that was served an indictment that is pending (regarding an event that occurred during your term in the company)? Yes/No Detail:
2.8 Were you, or are you, a controlling party or senior office holder (director, CEO, or one
employee level below) in a company on which a forfeit or financial sanction was imposed (regarding an event that occurred during your term in the company)? Note too if the findings were against you or your position personally—Yes/No Detail: ____________________
2.9 Have you been convicted by a disciplinary entity? Yes/No Detail:

2.10. Are criminal investigations being conducted against you concerning felony or
misdemeanor offenses? Yes/No Detail: ____________________
2.11. Are criminal investigations being conducted against a business in which you held
control or served in a senior position (director, Chief Executive Officer [CEO], or one employee level below) concerning felony or misdemeanor offenses? Yes/No Detail:
If yes, detail and note if there are findings are against you or your position personally:____________________
2.12. Are noncriminal investigations of any type or disciplinary proceedings of any kind being
conducted, or have they been conducted, against you, by any regulatory authorities, in Israel or abroad, or has notice been served that such proceedings are being considered, with respect to violation of requirements or standards of a regulatory system in Israel or abroad? Yes/No Detail: ____________________
2.13 Are noncriminal investigations of any type or disciplinary proceedings of any kind being
conducted, or have they been conducted, against a business in which you hold control or serve in a senior position (director, CEO, or one employee level below that), by any regulatory authorities, in Israel or abroad, or has notice been served that such proceedings are being

11 Including the imposing of means of enforcement by the Administrative Enforcement Committee.

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 51 ONLY THE HEBREW VERSION IS BINDING considered, with respect to violation of requirements or standards of a regulatory system in Israel or abroad, with regard to your term in office? Yes/No Detail:
Note too if the findings are against you or your position personally:____________________
2.14 Have you worked or held shares in a corporation in which its registration, certification,
membership, or license has been revoked or suspended by a regulatory authority? As a result of the removal of the corporation’s relevant license, if revoked, has your ability to operate in the area of the field that requires a license been limited or cancelled? Yes/No/Specify________
2.15 Was your service as an executive or a director in an entity in which you served
terminated in the past, or were you disqualified from serving as a director or from holding any other executive office? If the background for this is a criminal offense, please provide details only regarding offenses that may lawfully be considered in the evaluation of your candidacy. Yes/No Detail: ____________________
2.16 Has a court given you a restraining order as defined in Section 7 of the Companies Law?
Yes/No Detail: ____________________
2.17 Has a State Comptroller’s report been published which includes findings of a personal
nature about you, including findings related to your performance? Yes/No Detail:
____________________If yes, specify and note the details of the State Comptroller’s report.
2.18 Has a civil suit been filed against you by any State authority regarding any term or
position that you held? Yes/No Detail: ____________________
2.19 Are you are financially indebted to a third party as of the time of the declaration as a
result of a judgment against you in Israel or abroad? Yes/No Detail: ____________________
2.20 Have you, in Israel or abroad, reached an arrangement with creditors, filed applications
for bankruptcy, been declared bankrupt, had your assets confiscated, had an attachment placed on your assets, or are you involved in proceedings related to these matters? Yes/No Detail:

2.21 Are you, or have you been, a controlling party or senior office holder as noted above in
a corporation that was liquidated or is the process of liquidation, excluding voluntary liquidation, or receivership proceedings, or which has reached an arrangement with creditors? Yes/No Detail: ___________________
3. Conflicts of Interest
3.1 Do your business or professional activities create, or may create, a permanent conflict
of interest with the banking corporation? Yes / No If yes, specify: ___________ What is the nature of the conflict of interest? How frequent is the conflict of interest?

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3.2 Do you have business or professional relationships with financial institutions? Yes/No
If yes, specify: ___________
3.3 Do you, or any of your relatives²³, have any business, professional, employment, or
family relationships with the controlling shareholders of the bank, whether arising from joint ownership and/or joint management of businesses or ventures, or in any other way? ☐ Yes / ☐ No If yes, please specify: _____________________________________________
3.4 Do you, your spouse, or any corporation in which either of you is a controlling
shareholder, Chairperson of the Board, Chief Executive Officer, or other officer reporting directly to the CEO, have any liabilities (the amount of exposure values as defined under Proper Conduct of Banking Business Directive No. 313, "Supervisory Framework for Measuring and Controlling Large Exposures") to any of the following:
3.4.1 A banking corporation ☐ Yes / ☐ No If yes, please specify for
each obligor ___________________
3.4.2 A corporation controlled by the banking corporation ☐ Yes / ☐ No
If yes, please specify for each obligor: ___________________
3.4.3 A corporation that controls the banking corporation ☐ Yes / ☐ No
If yes, please specify for each obligor _________
3.5 Do you hold shares in the banking corporation, its subsidiaries, or its parent company?
Yes/No If yes, specify the company name, number, and share of equities held by you:_______
4. Candidate for director
4.1 Are you sufficiently proficient in Hebrew, at least at the level of reading and speaking, in a
manner that allows the reading of background material for meetings, and active participation in discussions? Yes/No/Details
4.2 Do you have appropriate qualifications for serving as director in a banking corporation as
required in Section 30 of Directive 301, among other things in terms of education, knowledge, experience, or expertise in one or more of the following areas: banking, finance, economic or business activity, legal issues, funding, accounting, risk management, regulatory compliance, information technology, or information security (including cybersecurity)? Yes/No/Details
4.3 Do you have experience as required in Section 2(a)(3) of the Companies (Conditions
and Criteria for a Director with Expertise in Accounting and Finance, and a Director with

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 53 ONLY THE HEBREW VERSION IS BINDING professional Qualifications) Regulations, 5776-2005? Yes/No Detail:

4.4 Do you have expertise in accounting and finance as the term is understood in Section 1
of the Companies (Conditions and Criteria for a Director with Expertise in Accounting and Finance, and a Director with professional Qualifications) Regulations, 5776-2005? 12 Yes/No Detail: ____________________
4.5 Do you have banking experience as noted in Section 25(a) of Directive 301?
Yes/No Detail: ____________________
4.5.1 Have you served at least 3 years in a senior office, as defined in Section 25(a)(i)
of Directive 301, at a bank or at a bank abroad, and dealt with management or control of a core area or of a material risk to the banking corporation to which you intend to serve as a director? Yes/No Detail______________
4.5.2 Did you report directly to the CEO or executive who reported directly to the CEO?
Yes/No Detail________________
4.5.3 Have you served as a director at a banking corporation?
Yes/No Detail__________________ If yes, specify the term of service.
4.5.4 Have you served as board chairperson at a banking corporation?
Yes/No Detail the name of the corporation and the period of tenure (start date and end date, month/year)________________
4.5.5 Have you served as the partner responsible for banking corporation audit
management at an external auditor’s office?
Yes/No Specify the position, name of office, and the period of tenure (start date and end date, month/year)________________
4.6 Do you have proven knowledge and experience in area of information technology (in
accordance with Section 25(d) of Directive 301)?
Not at all/to a small extent/to a medium extent/to a large extent – Detail;__________
4.7 Do you have the knowledge and experience in the areas of risk management, audit, and
control? Not at all/To a small degree/Medium/a lot; specify:____________________
4.8 Do you require a cooling-off period in accordance with Section 31(c) of Directive 301?
Yes/No If yes, when does the cooling-off period end?

12 Experience of at least 5 years in one of these, or cumulative experience of least five years in two or more of these:
(a) Senior position in the field of business management of a corporation with significant revenue (b) Senior public tenure or a senior position in public service (c) A senior position in an area that is a main occupation of the company. 13 A director with accounting and financial expertise is one who, by virtue of education, experience, and skills, possesses high proficiency and understanding of business accounting matters and financial statements, enabling deep comprehension of the company’s financial reports and the ability to initiate discussion regarding their presentation. The board shall assess such expertise considering education, experience, and knowledge in: (1) accounting and control issues typical of the company’s industry and size; (2) the role and duties of the external auditor; (3) preparation and approval of financial statements under the law and the Securities Law.

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4.9 Do you fulfill one of the following: (1) Control 14
,
15 a significant real corporation
Yes/No please specify; (2) Person connected to a controller 16 of a significant real corporation Yes/No please specify; (3) office holder 17 in a significant real corporation Yes/No please specify;
4.10 Permanent Conflicts of Interest
4.10.1 Do you serve as a director, member of an investment committee, member of a
credit committee, or employee²⁰ in one or more of the following entities:
a mutual investment fund or its management company, a provident fund or its management company, an insurer, a portfolio manager, an investment advisor, a stock exchange member, an underwriter, or any other corporation whose main activity is in the capital market, or a corporation controlling such an entity? ☐ Yes / ☐ No If yes, please specify: _____________________________________________
4.10.2 Do you serve as a director, member of an investment committee, member
of a credit committee, or employee²⁰ in another banking corporation, in a corporation controlled by the banking corporation, or in a corporation controlling another banking corporation? ☐ Yes / ☐ No If yes, please specify: _____________________________________________
4.10.3 Do you serve as a director, member of an investment committee, member
of a credit committee, or employee²⁰ in a corporation controlled by the banking corporation (whether or not it is a banking corporation)? ☐ Yes / ☐ No If yes, please specify: _____________________________________________
4.10.4 Do you serve as a director, member of an investment committee, member
of a credit committee, or employee²⁰ in a financial entity²¹ or in a corporation controlling a financial entity?

14 “Significant real corporation” – a corporation listed among significant real corporations under Section 30 of the Promotion of Competition and Reduction of Concentration Law, 2013. 15 Including a holder in a control group as defined in the Companies Law, in a real corporation with no other controlling shareholder. 16 “Person related to a controlling shareholder” – a relative (spouse, sibling, parent, descendant, descendant of spouse, and spouse of any of these), partner of the controlling shareholder, or anyone having ongoing employment, business, or professional relations, or control relations, and anyone serving as an officer in the controlling shareholder. 17 “Officer” – CEO, Chief Operating Officer, Deputy CEO, Vice CEO, any person performing such functions even if titled differently, as well as director, or manager directly subordinate to the CEO, and any employee directly subordinate to any of these.

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 55 ONLY THE HEBREW VERSION IS BINDING ☐ Yes / ☐ No If yes, please specify whether the financial entity is small (total assets not exceeding NIS 2 billion) / medium (total assets exceeding NIS 2 billion and up to NIS 10 billion) / large (total assets exceeding NIS 10 billion): ____________
4.10.5 For a candidate for the position of director – please specify the
corporations in the subsector to which you have an affiliation, as stated in
Section 55 of Directive 301: _____________________________
²¹ “Financial entity” – as defined in Section 31 of Directive 301: (1) institutional entity as defined in the Supervision of Financial Services (Insurance) Law, 1981; (2) manager of a mutual investment fund as defined in the Joint Investments in Trust Law, 1994.

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5. For External Director Candidates
5.1.Do you meet the conditions of Section 240 of the Companies Law? ☐ Yes / ☐ No If yes, please specify: _____________________________________________ 5.2.Are you an employee of the Israel Securities Authority or of the Tel Aviv Stock Exchange? ☐ Yes / ☐ No If yes, please specify: _____________________________________________ 5.3.Do you serve as a director in another company in which any member of the board of directors of the banking corporation serves as an external director? ☐ Yes / ☐ No If yes, please specify: _____________________________________________ 5.4.Are you a relative²² of the controlling shareholder of the banking corporation? ☐ Yes / ☐ No If yes, please specify: _____________________________________________ 5.5.At present or within the past two years, have you, your relative²², your partner, your employer, anyone to whom you are directly or indirectly subordinate, or any corporation in which you are a controlling shareholder, had an affiliation²³ with any of the following entities?
5.5.1. The banking corporation Yes/No, specify if yes
5.5.2. The controlling interest in the banking corporation Yes/No, specify if yes
5.5.3. Relative of the controlling interest Yes/No, specify if yes
5.5.4. A corporation controlled by the banking corporation currently or over the past
2 years: Yes/No, specify if yes
5.5.5. A corporation controlled by the controlling interest in the banking corporation
currently or over the past 2 years: Yes/No, specify if yes 5.6.Candidate for the Position of External Director as Defined in Section 24 of Directive 301 - required to respond to the following questions as well:
5.6.1. Do you meet the conditions of Section 24(b) of Directive 301?
☐ Yes / ☐ No
If yes, please specify: _____________________________________________
5.6.2. At present or within the past two years, have you, your relative²², your partner,
your employer, anyone to whom you are directly or indirectly subordinate, or any corporation in which you are a controlling shareholder, had an affiliation²⁴ with a holder of more than 5 percent of a specific class of control means in the banking corporation? ☐ Yes / ☐ No If yes, please specify: _____________________________________________
5.6.3. Do you, your spouse, one of your parents or children hold more than 1 percent
of the shares traded on any of the following entities?
(1) The banking corporation: Yes/No, specify if yes

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 57 ONLY THE HEBREW VERSION IS BINDING (2) A corporation controlled by the banking corporation Yes/No, specify if yes (3) A corporation that controls the banking corporation: Yes/No, specify if yes (4) A banking corporation controlled by one of the entities listed above: Yes/No, specify if yes
5.6.4. Do you, your spouse, one of your parents or children hold untraded shares of
any of the following entities?
(1) The banking corporation: Yes/No, specify if yes (2) A corporation controlled by the banking corporation Yes/No, specify if yes (3) A corporation that controls the banking corporation: Yes/No, specify if yes (4) A banking corporation controlled by one of the entities listed above: Yes/No, specify if yes
6. Candidate for director at a banking corporation without a controlling core, on
which Section 11e of the Ordinance applies
6.1.Who proposed your candidacy for election as a director to the general meeting? (Please mark the appropriate answer.
6.1.1. ☐ The Committee for the Appointment of Directors in Banking Corporations
appointed under Section 36A of the Banking (Licensing) Law (hereinafter – “the Committee”): _____________________________
6.1.2. ☐ A holder of more than 2.5 percent of a specific class of means of control in
the banking corporation – please specify name and percentage of holding: ________________________________________
6.1.3. ☐ A group of holders²⁴ as defined in Section 11D(a)(3)(b) of the Ordinance –
 please specify names and percentages of holdings: ________________________________________ 6.2.Do you or your relative²⁵, to the best of your knowledge, hold more than 0.25 percent of the traded shares in any of the following (if applicable, specify the percentage of holding, name of the corporation or holder, and degree of kinship):
6.2.1 In the banking corporation: Yes / No.
If yes, please specify: ____________________________________________
6.2.2 In a corporation controlled by the banking corporation: Yes / No.
If yes, please specify: ____________________________________________
6.2.3 In a significant shareholder (as defined in Section 11(e)(5) of the Ordinance): Yes / No.
If yes, please specify: ____________________________________________ 6.3 To the best of your knowledge, do you or any of your relatives (as defined in Section 25) hold any means of control of any kind (other than publicly traded shares) in one or more of the following entities?

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 58 ONLY THE HEBREW VERSION IS BINDING (If applicable, please indicate the percentage and type of control, the name of the corporation or holder, and the nature of the family relationship.)
6.3.1 In the banking corporation: Yes / No.
If yes, please specify: ____________________________________________
6.3.2 In a corporation controlled by the banking corporation: Yes / No.
If yes, please specify: ____________________________________________
6.3.3 In a significant shareholder (as defined in Section 11(e)(5) of the Ordinance): Yes / No.
If yes, please specify: ____________________________________________ For sections 6.4–6.6, serving as a director in a banking corporation without a controlling core shall not be considered an “affiliation” with respect to a candidate for reappointment. 6.4 To the best of your knowledge, do you currently, or have you within the past two years, have any affiliation (as defined in section 28) with any of the following, either personally or through a person with whom you have a close connection (as defined in section 27)? (If applicable, please specify the type of affiliation, the name of the corporation or individual, and the nature of the relationship.)
6.4.1 With the banking corporation: Yes / No.
If yes, please specify: ____________________________________________
6.4.2 With a corporation controlled by the banking corporation: Yes / No.
If yes, please specify: ____________________________________________
6.4.3 With an office holder of the banking corporation: Yes / No.
If yes, please specify: ____________________________________________
6.4.4 With a significant shareholder: Yes / No.
If yes, please specify: ____________________________________________ 6.5 From the date of appointment onward, have you had affiliation with any of the following? (If applicable, please specify the nature of the relationship.)

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 59 ONLY THE HEBREW VERSION IS BINDING
6.5.1 With a relative of an officer of the banking corporation: Yes / No.
If yes, please specify: ____________________________________________
6.5.2 With a relative of a significant shareholder: Yes / No.
If yes, please specify: ____________________________________________
6.5.3 With a partner of a significant shareholder: Yes / No.
If yes, please specify: ____________________________________________ If the answer is “Yes,” do you undertake to terminate the circumstances creating such affiliation prior to the commencement of your term? 6.6 Do you currently, or does any person with whom you have a close connection, maintain any business or professional relationships — even if not on a regular basis — with any of the following? (If applicable, please specify the details of the corporation or individual and the nature of the relationship.)
6.6.1 With the banking corporation: Yes / No.
If yes, please specify: ____________________________________________
6.6.2 With a corporation controlled by the banking corporation: Yes / No.
If yes, please specify: ____________________________________________
6.6.3 With an office holder of the banking corporation: Yes / No.
If yes, please specify: ____________________________________________
6.6.4 With a significant shareholder who proposed your candidacy for the position of director
in the banking corporation: Yes / No.
If yes, please specify: ____________________________________________ 6.7 If you are a candidate proposed by the Committee, please also answer the following questions:
6.7.1 Do you have any affiliation with a member of the Committee at the time of
appointment?

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 60 ONLY THE HEBREW VERSION IS BINDING Yes / No. If yes, please specify: ____________________________________________
6.7.2 Are you a Minister, Deputy Minister, or Member of the Knesset, or do you have a
personal, business, or political connection with a Minister or Deputy Minister, or are you a civil servant or an employee of a statutory corporation? Yes / No. If yes, please specify: ___________________________________________

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 61 ONLY THE HEBREW VERSION IS BINDING Declaration by Candidate I the undersigned, ____________________, ID number _______________, after having been warned that I must tell the truth and that I am liable to the penalties set forth in law if I fail to do so, declare the following:

I am aware that I am a candidate for the office of CEO/Chairman of the Board of
Directors/Director/Outside Director/Internal Auditor/Legal Counsel/Other ________ (delete where inapplicable) in _______________ (name of corporation) (hereinafter, the banking corporation). All the information and details that I have provided in this questionnaire are complete, correct, and truthful. I am aware that this information shall serve the Bank of Israel in examining my candidacy and tenure as an office holder as noted, and will continue to serve during the course of the period of my tenure in the said position.
I commit to notifying of any change as required in Proper Conduct of Banking Business
Directive no. 301 during the course of my tenure, close to when it occurs.
I am aware that such information, to the extent it is relevant, nay be passed on to the
Bank of Israel and to a small number of employees at the Banking Supervision Department or other Bank of Israel employees, to the extent it will be necessary in examining my candidacy or during the entire period of my tenure in the said position.
I consent to waiving any right to confidentiality or immunity regarding any information
about me or my businesses that is held by police, investigative, or other governmental authorities in Israel or abroad, including Interpol; by regulatory or supervisory authorities in Israel or abroad (such as the Banking Supervision Department, the Capital Market, Insurance and Savings Authority, the Competition Authority, and the Israel Securities Authority); by tax authorities in Israel or abroad; as well as by banking corporations or foreign banks. I agree that these entities may provide the information or documents in their possession to the Banking Supervision Department to the extent permitted by law, and in Israel pursuant to the Criminal Data and Rehabilitation Law, 5779-2019. I am aware that my consent under this section releases the entities listed above from any duty of confidentiality or immunity toward me, and I hereby waive any claim relating to a breach of confidentiality or immunity by these entities in connection with providing information about me to the Bank of Israel. I am also aware that my consent as stated above releases the entities listed in this section, as well as the recipient of the information, from any obligation to notify me regarding the transfer of such information. This consent is only for the need of examining my candidacy and tenure as an office holder at the banking corporation and will remain in effect during the entire course of my tenure at the said function.
I am aware that I have no legal obligation to transfer the information and details that I
provided in the questionnaire. However, I am aware that this information is required for my approval as said office holder.

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6. I am aware that the information about me shall be kept in a database managed by the
Bank of Israel and I have the right to look through it as per Section 13 of the Protection of Privacy Law, 5741-1981 (hereinafter, the Protection of Privacy Law) and I have the right to request to amend the personal information in accordance with Section 14 of the Protection of Privacy Law,
7. My other occupations leave me sufficient time required for fulfilling my functions in
the position.
8. There is no permanent conflict of interest or concern of a permanent conflict of interest
between the position for which I am a candidate and any other position or occupation that I fill or my private investments and I commit to notifying the banking corporation immediately of any conflict of interest as noted if one develops in the future. I hereby declare that this is my name, that this is my signature, and that the contents of my declaration are true. ___________ ___________ _____ ___________ ___________ _______ Date Signature Attorney’s Certification I hereby certify on __________ (date) that Mr./Ms. ______________________, who identified himself/herself by means of ID card number ________________/whom I know personally, appeared before Attorney ______________ at my office at ________________________ (address), and after I warned him/her that he/she must declare the truth and that he/she will be liable to the penalties set forth in the law if he/she fails to do so, certified the correctness of the Statement and affixed his/her signature thereto. ______________________ Date ______________________ Stamp ___________________ Signature of attorney

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 63 ONLY THE HEBREW VERSION IS BINDING Consent for Disclosure of Information from the Criminal Register and Information on Pending Cases Pursuant to Sections 11 or 12 of the Criminal Information and Rehabilitation of Offenders Law, 5779-2019 I, the undersigned ____________, ID No. , hereby give my consent for the Israel Police to disclose information about me from the criminal register, as well as information regarding any pending cases, in accordance with the provisions of the Criminal Data and Rehabilitation Law, 5779-2019 (hereinafter: “the Law”), to the Governor of the Bank of Israel, the Supervisor of Banks, and any authorized employee of the Bank of Israel, for the purpose of appointment under Section 11a and 15c(b) of the Banking Ordinance, 1941 It is hereby clarified that this consent also applies to the periodic disclosure of updated criminal information to the aforementioned authorities for the purpose of ongoing monitoring of any changes in my criminal record. I have been informed that, under the Law, I am entitled to review at a police station the records maintained in my name in the criminal and police registers. It has been explained to me that, should any such record exist, this does not necessarily disqualify me from obtaining the relevant right or position, and I may attach information regarding my rehabilitation or personal circumstances to be taken into consideration when reviewing my application, in accordance with the criteria established by law. I acknowledge that by providing this consent, I waive my right to receive notification of the disclosure of such information, all subject to the provisions of the Law. Signature Date __________________________ Candidate for the position At the banking corporation

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 64 ONLY THE HEBREW VERSION IS BINDING Declaration of Banking Corporation Name of banking corporation: ____________Code of banking corporation:
/Candidate name; ID number (hereinafter, the candidate); description of the position. To the best of our knowledge and based on the information and details that the candidate furnished in this questionnaire, and our examinations, and after we found that the position is included in the list of office holders who require notification of the Supervisor of Banks in accordance with the Section 11a or Sections 15c(b) and 11a, of the Ordinance, as relevant, we believe that the candidate is suitably qualified to serve in the position for which he/she is being proposed, and that his/her appointment does not contravene the provisions of any law and/or the Proper Conduct of Banking Business Directives of the Supervisor of Banks. We commit to notifying the Supervisor of Banks of changes in accordance with Section 4(c) of Proper Conduct of Banking Business Directive no. 301. We confirm that we received the candidate’s original signed declaration, and it is kept in the banking corporation’s office, and to the extent it will be required, we will submit it of the Banking Supervision Department close to the required date. In appointing the candidate, conflicts of interest and affiliations based on all laws were examined, and to the extent necessary suitable arrangements were made. The background material and a summary of the decisions in the Audit Committee discussions dealing with the candidate’s affiliations and conflicts of interest are attached, as relevant. Date Authorized Signatory’s name Position Signature & stamp ------------------- ------------------ ------------------ ------------------

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 65 ONLY THE HEBREW VERSION IS BINDING Declaration by Internal Auditor In the event that the candidate was or is an employee of the banking corporation, it is required to complete this section:
In a review by the internal auditor of the internal audit reports that the banking corporation performed in the areas of responsibility of Mr./Ms.___________, ID number __________ (hereinafter, the “candidate”), Material findings whatsoever which have a personal connection to the candidate, including those related to his/her performance,  were  were not (delete where inapplicable) discovered. ____________ Date ______________________ Internal auditor _____________ Function _____________ Seal and Signature

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Appendix B1
Declaration by an Office Holder in a Banking Corporation I, _______________________, the undersigned, holder of identity card number ______________, currently serving as ______________________ in the banking corporation/company (hereinafter – the “Banking Corporation”) ____________________, and applying for the position of ____________________ in the Banking Corporation ____________________, after having been duly cautioned that I am required to tell the truth and that I may be subject to the penalties prescribed by law should I fail to do so, hereby declare that no changes have occurred in my responses to the questionnaire for candidates for office holder positions in a banking corporation dated _____________________ (hereinafter – the “Questionnaire”), which I signed prior to my appointment as an office holder in the Banking Corporation _____________________ on _____________________. I further declare that all information and details provided in this declaration are complete, accurate, and true, and I undertake to report any change as required under Proper Conduct of Banking Business Directive No. 301 during my tenure, immediately upon its occurrence. To the best of my knowledge, my service in the requested position does not conflict with any applicable law or with any directive of the Supervisor of Banks regarding proper conduct of banking business. I hereby declare that this is my name, this is my signature, and the contents of this declaration are true. _________________ _________________ Date Signature Attorney’s Certification I hereby certify on __________ (date) that Mr./Mrs./Ms. ______________________, who identified himself/herself by means of ID card number ________________, and whom I know personally, appeared before Attorney ______________ at my office at ________________________ (address), and after I warned him/her that he/she must state the truth and that he/she will be liable to the penalties set forth in the law if he/she fails to do so, certified the correctness of the Declaration and affixed his/her signature thereto. ______________________ Date ______________________ Stamp ___________________ Signature of attorney

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 67 ONLY THE HEBREW VERSION IS BINDING Declaration of Banking Corporation Name of banking corporation: ___________ Code of banking corporation:____________ To the best of our knowledge and based on the information and details that the candidate furnished, we believe that the candidate is suitably qualified to serve in the requested position, and that his/her term does not contravene the provisions of any law and/or the Proper Conduct of Banking Business Directives of the Supervisor of Banks. ____________ Date ______________________ Name of authorized signatory _____________ Function _____________ Signature

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Appendix B2
Declaration of the Office Holder When Updating Particulars I the undersigned ________, holder of ID Card No. _____, with current position in the banking corporation/company (hereinafter, the banking corporation) and with requested position of _________________in the banking corporation . _______, after having been warned that I must tell the truth, and that I will be liable to the legally stipulated penalties if I do not do so, hereby declare that no changes have occurred in my responses to the questionnaire for the candidate for an office holder position in the banking corporation since _________________(date) on which I signed before my appointment as an office holder in the ___________ banking corporation on the date ___________ before my appointment as an office holder in the _________banking corporation, and I undertake to notify of any change in Proper Conduct of Banking Business Directive no. 301 as required, and that all the information and details that I provided in the declaration are complete, correct, and true, and I undertake to notify of any change as required in Proper Conduct of Banking Business Directive no. 301 during the course of my tenure close to when they occur. All the information and particulars that I have provided in this updating notice are complete, correct, and true, and I undertake to give notice of any change, as required in Proper Conduct of Banking Business Directive 301, during my term, as soon as such changes occur. I hereby state that this is my name, that this is my signature, and that the contents of my declaration are true. _____________________________ _____________________________ Date Signature

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 69 ONLY THE HEBREW VERSION IS BINDING Attorney’s Certification I hereby certify on __________ (date) that Mr./Mrs./Ms. ______________________, who identified himself/herself by means of ID card number ____, and whom I know personally, appeared before Attorney ______________ at my office at ________________________ (address), and after I warned him/her that he/she must state the truth and that he/she will be liable to the penalties set forth in the law if he/she fails to do so, certified the correctness of the Declaration and affixed his/her signature thereto. ______________________ Date ______________________ Stamp ___________________ Signature of attorney Declaration of Banking Corporation Name of banking corporation: ___________ Code of banking corporation: To the best of our knowledge and based on the information and details that the candidate furnished in this update notice and the examinations we conducted, we believe that the candidate is suitably qualified to continue serving in the requested position, and that the continuation of his/her term does not contravene the provisions of any law and/or the Proper Conduct of Banking Business Directives of the Supervisor of Banks. ____________ Date ______________________ Name of authorized signatory _____________ Function _____________ Signature

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Appendix C
Capital Market Corporations
(1) A mutual fund, as defined in the Mutual Funds Law, 5754–1994, or a company that manages such a fund; (2) A provident fund or a management company as defined in the Supervision of Financial Services (Provident Funds) Law, 5765–2005; (3) An insurer, as defined in the Regulation of Insurance Transactions Law, 5741–1981; (4) A portfolio manager, as defined in Section 8(b) of the Practice of Investment Consultancy and Investment Portfolio Management Regulation Law, 5755–1995; (5) An investment consultant or investment marketer, as defined in Section 7(c) of the Practice of Investment Consultancy and Investment Portfolio Management Regulation Law, 5755–1995; (6) A member of the stock exchange; (7) An underwriter for whom the eligibility terms are fulfilled under Section 56(c) of the Securities Law, 5728–1968; (8) A corporation whose principal business is in the capital market.

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 71 ONLY THE HEBREW VERSION IS BINDING Revisions Circular 06 number Version Details Date 1210 Original directive 13/9/85 1394 Revision 11/1/95 1412 Revision 19/6/89 1473 Revision 13/8/90 ---- 1 Integration into Proper Conduct of Banking Business directives 8/91 1582 2 Revision 21/7/92 1606,1609 3 Revision 8/11/92 1615,1616 4 Revision 3/1/93 1715 5 Revision 11/7/94 1739 6 Revision 2/1/95 ---- 7 Updated version of Proper Conduct of Banking Business file 12/95 1928 8 Revision 21/6/98 2021 9 Revision 10/1/01 2038 10 Revision 22/8/01 2122 11 Revision 30/11/03 2161 12 Revision 28/2/05 2287 13 Revision 29/12/10 2313 14 Revision 6/11/11 2320 15 Revision 25/12/11 2332 16 Revision 30/4/12 2355 17 Revision 31/12/12 2403 18 Revision 19/11/13 2405 19 Revision 25/12/13 2421 20 Revision 26/5/14

Supervisor of Banks: Proper Conduct of Banking Business [32] (12/25) Board of Directors Page 301- 72 ONLY THE HEBREW VERSION IS BINDING 2425 21 Revision 10/7/14 2476 22 Revision 29/6/15 2535 23 Revision 5/7/17 2581 24 Revision 13/11/18 2669 25 Revision 30/9/21 2681 26 Revision 26/12/21 2690 27 Revision 27/12/21 2691 28 Revision 18/1/22 2703 29 Revision 10/4/22 2742 30 Revision 23/02/23 2822 31 Revision 14/7/25 2832 32 Revision 29/12/25