The ISA is endowed with a broad range of supervisory and enforcement authority, which include:
- Rule making power regarding licensee conduct-of-business. These include provisions applied universally to all licensees as well as to specific classes of licensees;
- The authority to demand information and documents,
- The authority to petition the court for search warrants and permission to seize assets;
- The authority to investigate suspected criminal activity and disciplinary violations;
- The authority to conduct on-site audits within the framework of enforcing the Prohibition of Money Laundering Law.
Supervision of the licensees is conducted by the Investment Advice and Portfolio Management Licensing and Supervision Department. The department comprises a staff of twelve, of which five are engaged in supervision. ISA inspectors have academic degrees in the relevant professions (law, economics, accounting).
ISA supervision focuses on the following areas:
Inspections – the ISA conducts three types of inspections:
- Correspondence sweeps – inspections of a particular topic across a large number of companies;
- On-site inspections – inspections of specific topics at the offices of licensed firms and among investment advisors employed in the banks;
- Inspections focusing on compliance with the Anti-money Laundering Law.
Examination of reports filed to the ISA
Treatment of public complaints and investigation of suspected violations – The department’s activities includes investigating suspected violations of the Law. Preliminary inquiries are launched in wake of public inquiries or as a result of suspicions uncovered during the normal course of department activity. These inquiries typically involve phone conversations or meetings with the complainants and referral to the stock exchange members to obtain data and conduct a more in depth analysis of findings.
At the conclusion of the preliminary stage of an investigation, an inter-departmental ISA forum convenes to decide which measures should be taken in each of the cases. The decision is based on considerations of public interest, the credibility of the information and quality of evidence. The decision to close the file or send a deficiency letter, conduct an inspection, levy a civil find or pass on the findings to the ISA chairman to determine if a criminal or disciplinary investigation is warranted, is made in accordance with the findings at the ISA’s disposal.
