The Financial Sector Conduct Authority (FSCA) has granted permission for the external manager of investment house Slice to instruct its insurance agencies to immediately transfer all funds invested in foreign funds into a trust account. This is due to the discovery that some funds, worth up to NIS 800 million, did not meet the necessary criteria.
The request is aimed at the insurance agencies rather than the funds themselves, as previous attempts to obtain information from the funds were unsuccessful. Established in 2020, Slice managed NIS 4.2 billion in assets with 94 thousand investors. While child savings plans, regular pension funds, and retirement funds were managed effectively, there were serious issues with the handling of individual retirement accounts (IRAs).
The external manager uncovered that the IRA industry was being operated like a pyramid scheme. The FSCA took immediate action and suspended all activities related to IRAs at Slice. The department also issued a warning to other investment houses to take note of this incident and ensure that they comply with all applicable regulations and standards when managing IRA accounts.
