Revolution In Bonds

The Bonds Act has been significantly amended (the Amendment). From 1 August 2012, new rules for the issuance of bonds and other matters are in place. The most important changes are the simplification of the process of bond emission and cancellation of the supervision of the Czech National Bank (including sanctions). On the other hand, investors should be more cautious when intending to invest in bonds because of limited regulatory involvement.

The aim of the Amendment is to mitigate the administrative burden connected with the issuance of bonds, to expand the issuance of the bonds on the Czech market and to deregulate so-called "private bonds".

A bond is defined as any security incorporating the right for repayment of a due amount. Further more, the Bonds Act is now applicable only to bonds governed by Czech law, regardless of their issuer or place of issue.