A joint working team of the Bank of Israel’s Banking Supervision Department, the Ministry of Finance and the Israel Securities Authority has published a final report setting out a unified new fee model for retail securities activity. The reform is intended to simplify fee structures, increase transparency, improve comparability across providers and align charges more closely with the service actually provided. It covers bank investment advice, mutual fund transaction and distribution charges, and securities custody account fees, with the longer-term aim of applying similar regulation across banks and nonbank exchange members. In Phase I, banks would be allowed to offer bundled service packages for securities and financial asset activity and to charge a separate advisory fee rather than embedding it in the securities custody account management fee. That advisory fee could be structured according to the type of service, including ongoing or one-time advice and human, digital or hybrid delivery, and banks would not be allowed to tie advisory services to the purchase of other services or make advice a condition for managing a securities portfolio. In Phase II, the current mutual fund distribution fee would be replaced, for advised purchase transactions, with a uniform agency fee of 0.2 percent of the value of units purchased, paid over the holding period by the fund manager to the investment adviser or bank advisory system, across all mutual fund types except money market funds. Purchase and sale fees would also be standardized across passive and active mutual funds, again excluding money market funds. In Phase III, the securities custody account management fee would move to a fixed shekel amount charged monthly for all domestic and foreign holdings, with possible fee tiers by portfolio value to protect lower-value portfolios. The recommendations are due to be introduced gradually, with timing differentiated between measures that can be implemented quickly and those requiring more complex regulatory work. Regulators plan to review market conditions and adaptation at each implementation stage, and legislative and regulatory amendments will be advanced to complete the mutual fund fee changes.
Bank of Israel2026-06-24
Bank of Israel and partners publish final securities fee reform including separate advisory fees and a 0.2 percent mutual fund agency fee
The Bank of Israel, the Ministry of Finance and the Israel Securities Authority have published a final report proposing a unified securities fee model aimed at making charges simpler, more transparent and easier to compare. The plan would let banks charge separate advisory fees, replace current mutual fund distribution fees with a 0.2 percent agency fee for advised purchases, and move custody account fees to a fixed monthly shekel charge. Implementation is planned in stages, with some elements requiring legislative and regulatory changes.