Institutional Investors' Cross-Holdings Pose Conflict of Interest, Says Regulator
Translated & summarized from TheMarker by baba
Spi Singer, Chairman of the Israel Securities Authority, stated that institutional investors manage over NIS 3 trillion and hold significant stakes in major companies. He warned that concentrated ownership by a few large firms creates undue influence and conflicts of interest. Singer emphasized the need for structural solutions to address these issues in the financial sector.
The story in 5 lines · by baba
- Institutional investors manage over NIS 3 trillion and hold 31% of Tel Aviv 125 index companies.
- Five major firms manage nearly 60% of institutional funds, wielding significant influence.
- These investors are key players in business credit, capital markets, and foreign exchange.
- Spi Singer called for structural solutions to financial sector conflicts of interest.
- He argued large financial bodies like insurers are not the solution for banking competition.
Institutional investors in Israel manage assets exceeding NIS 3 trillion and hold an average of 31% in companies within the Tel Aviv 125 index, according to Spi Singer, Chairman of the Israel Securities Authority. Speaking at a conference hosted by the Association of Investment Houses at Tel Aviv University, Singer highlighted that these entities possess numerous cross-holdings in corporations. They are significant players in the business credit, capital markets, and foreign exchange sectors. He noted that approximately 60% of these funds are managed by just five major entities: Migdal, Clal, Harel, Menora, and Phoenix, granting them exceptional power and influence. Singer asserted that structural solutions are necessary to address the substantial conflicts of interest inherent in the financial sector, suggesting that large financial bodies like insurance companies are not the answer to fostering competition within the banking industry.
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