The ISA has recently issued a draft amendment, to the Joint Investment Trust Law (Distribution Commission) Regulations (the "distribution commission regulation" or "amendment"). The amendment includes changes to the regulation of distribution fees paid in relation to the distribution of foreign funds in Israel. The proposed amendment was published on the ISA website but is not yet published in the official Gazette (so changes may still occur).
 
The amendment to the distribution commission regulation follows the official publication of the amendment to Joint Investment Trust Law - 1994 last year, which included provisions regarding the distribution of foreign funds in Israel. The distribution of foreign funds in Israel will be possible, when the Joint Investment Trust Regulations (Foreign Fund Unit Offerings) - 2013 ("foreign fund regulations") come into force (a draft of these regulations has already been published). The amendment to the distribution commission regulation will also come into force only when the foreign fund regulations are officially published.
 
According to the amendment to the distribution commission regulation, a foreign fund manager may pay the distributor of the foreign fund a distribution fee for foreign fund units which are permitted to be offered in Israel.
 
A distributor shall not charge and a fund manager shall not pay a distribution fee, for each day a unit of a fund under fund manager's management is held through a distributor, in a sum that is in excess of a unit's redemption price published on that day; Where there was no redemption price published on that day – the latest redemption price published prior to that date, and multiplied by 0.35%/365.
 
Where there is no agreement between a fund manager and a distributor pertaining the distribution fee, the distributor is authorized to charge a unit purchaser the same distribution fee it may charge a fund manager (had they entered into an agreement) or less. Notwithstanding the aforesaid, the distributor may only charge an execution fee from a foreign fund unit purchaser of a fund that is listed for trade on a stock exchange.
 
The distributor may not charge different rates of the aforesaid distribution fee due to units being issued by fund managers that did not enter into a distribution agreement with it or due to the fact the fund is a foreign fund.
 
A distributor shall not charge a distribution fee on foreign fund units listed for trade on the stock exchange.

The above is a general overview of the distribution fee regulation.