An obstacle that could have delayed the Israel Securities Authority’s plan for the establishment of an online distribution platform of mutual funds has been removed. Sources inform ''Globes'' that the Bank of Israel has decided that special legislation will not be needed to set up the project, expediting it. Amending current legislation would have taken at least several months until the Knesset Finance Committee discussed the subject.
Planning for the online mutual funds distribution platform began two years ago. Buyers will be able to use the platform to directly purchase participating units in mutual funds, without paying purchase fees. The Securities Authority wants to break the banks’ monopoly in the distribution of mutual funds.
An investor will be able to easily manage activity in the mutual funds via the online platform through the bank selected to operate the service, without the need to actually go to the bank in person or open an account there.
The large banks are not too happy, to put it mildly, with the initiative, since the platform will compete with their own distribution channels. Presumably, had legislation been required to launch the online platform, they would have made every effort to torpedo it by lobbying MKs.
The Securities Authority says that the online platform, a flagship project, would promote competition in the mutual funds sector. It added that the project’s success would not only be measured by the number of investors on the site, but also by its competition against the banks, which would lower investors’ costs.
Published by Globes [online], Israel business news - www.globes.co.il - on June 6, 2007
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