In recent years, investors have been very interested in investing in corporate bonds. According to Act No. 190/2004 Coll., on bonds, a bond is a security that obligates the issuer (issuer of the bond) to repay the amount owed and the relevant yield within the given term. In other words, the investor lends funds to the business company that issued the bonds. Corporate bonds are subject to CNB supervision under certain conditions. You will find out which one in the article below.
Issue conditions, prospectus
Each issuer before issuing the bond itself then must make the emission conditions available. In accordance with the law, the issue conditions contain information about the issue of bonds and define the rights and obligations of the issuer and bond owners.
With the exception of some cases (e.g. if the issue is intended for fewer than 150 persons or in the case of bond issues up to EUR 1 million), the issuer is then obliged to issue the so-called prospectus. Compared to the issue conditions, the prospectus contains much more information about the issuer, including a description of its financial situation, market analysis or the future development of its business.
The role of the Czech National Bank (ČNB) in issuing corporate bonds
In case the issuer issued emission conditions only, so these they do not need any approval from the CNB. If the issuer was legally obliged to issue prospects, then this one is subject to an approval procedure by the CNB.
As part of this administrative procedure, the CNB examines whether the prospectus meets all the requirements required in particular by European legislation (i.e. according to Regulation (EU) 2017/1129 of the European Parliament and of the Council of 14 June 2017 on the prospectus, which is to be published during a public offer or acceptance of securities for trading on a regulated market, and on the repeal of Directive 2003/71/EC) and other legal regulations. Only CNB certifiesthat the approved prospectus meets all legal requirements. It can therefore be said that the purpose of this procedure is to ensure that the prospectus contained enough information for investors about the issuer and the offered bond. However, in no case does the CNB assess the eminent's financial situation, business plan or ability to pay revenues.
záver
Due to the popularity of corporate bonds among investors, one must be careful not to rely only on the fact that the bond or The bond prospectus was approved by the CNB because the CNB's role is rather only formal and in no case The CNB does not assess the riskiness or quality of the relevant bond.
Source: Leagle.One
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