The second component, the provision of the service for which the two contracted and the execution of the transactions. This is the "execution stage", in which the relationship between the service provider and the service recipient comes into play. The guiding principles of the law regarding the relationship between the two revolve around the duty to act in the best interest of the clients with loyalty, faith and diligence, with maximum disclosure and protection of the interests of the clients and the absence of a conflict of interest (sections 11 and 14, 15, 16, 16a, 17, 18 of the Counseling Law; and see also additional rules unique to a portfolio manager in Chapter D). to the Counseling Law). Another aspect is the registration and reporting. Whether in the form of portfolio management or in another relationship format, the service provider is required to report to the customer and provide him with an update regarding the activity carried out in the account. These obligations are concretely shaped in relation to the format of the relationship (see Chapter E of the Consulting Law and the Regulations for Regulating Investment Advice, Investment Marketing and Investment Portfolio Management (Registration of Transactions and Registration of Consultancy Activities), 5768-2007).
According to the Consulting Law, the individual conduct between the client and the service provider is derived from the nature of the relationship - whether it is consulting or marketing or managing investment portfolios. This is the case on the normative level, where the relationship between the customers is arranged and done in accordance with the law. In an irregular activity, the mindset carried out is the opposite: we are required to examine the concrete activity between the service provider and the customer in order to identify the format of the relationship. In the relationship between an advisor and a client, the provision of the service is expressed in the processing of investment recommendations, or in the words of the Advice Law, "providing advice regarding the feasibility of an investment" and delivering them to the client, who in turn makes the decision regarding the execution of the transaction. In the case of a client-manager, the manager has the option of executing a transaction at his discretion. In both situations - i.e., consulting and management - the first characteristic, the connection between the two and the definition of the relationship between them, exists, and within it the format of the relationship is dictated. Whether it is consulting or management, the service provider's activity must be carried out in accordance with the investment policy and the client's desired level of risk as determined in the agreement between the two.