Act No. 530 / 1990 Coll.
Law on bonds
Valid
Effective from 01.02.1991
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530
THE LAW
of 26 November 1990
on bonds
The Federal Assembly of the Czech and Slovak Federal Republic decided on this law:
INTRODUCTORY PROVISIONS
Basic provisions
(1) A bond is a fund1) a security with which the right to demand repayment of the amount due under Article 12 is linked to the nominal value of the bond at the maturity date of the bond and the payment of the proceeds thereof pursuant to Article 10 on the specified date or dates and the obligation of the person who issued the bond (hereinafter referred to as the issuer) to satisfy those rights. Paragraph 12 (6) second sentence and Paragraph 21 are not affected by this.
(2) This Act applies to bonds issued in the Czech Republic, regardless of who their issuer is, unless otherwise provided for by this Act.
(3) Bonds shall be subject to the provisions of the Securities Act, unless otherwise provided for in that Act or in specific legislation.
(1) Only a legal person may be the issuer of a bond unless a special law prohibits that legal person from issuing a bond.
(2) The issuer may issue a bond unless otherwise provided for in this law, unless:
(a) the Securities Commission (hereinafter referred to as "the Commission") shall approve the issue terms of the bond;
(b) the Commission shall approve the prospectus of the bond and assign a bond designation under the international numbering system for the identification of securities (hereinafter referred to as "ISIN") where required by the Securities Act;
(c) publish the emission conditions of the bond (hereinafter referred to as "the emission conditions").
(3) Debt issue means a set of bonds issued on the basis of the approval of the same emission conditions by the Commission and having the same issue date and ISIN, if assigned.
(4) A collecting bond is a paper bond whose total nominal value is accounted for by the owners by a certain number of bonds, without being assigned a serial number to those bonds. The emission conditions shall specify when and under which conditions the issuer issues specific bonds to the owner.
(5) The collection bond is the common property of the holders of shares in the collection bond. The provisions of the Civil Code on co-ownership shall not apply to the shares of owners in the collective bond. 2) The holder of the share in the collective bond shall be the owner of a number of individual bonds corresponding to the size of its share in the collective bond. The holder of the share in the collected bond shall have all the rights that are due to the holder of the bond and the right that the issuer shall, upon request, issue to him specific bonds in accordance with the terms of the issue.
(6) The collection bond must be deposited with the securities dealer.
(7) The holder of the share in the collected bond may, in accordance with the emission conditions, transfer bonds corresponding to that share or one of them to another person. The effects of the transfer shall be entered in the register kept by the securities dealer for which the collection bond is deposited.
Debt instruments
Forms of the bond
(1) A paper-based bond must contain:
(a) the trading firm or name of the issuer and its registered office;
(b) the name of the bond in which the word "bond" must be included or, in the case of a specific type of bond, the designation of that type in accordance with § 14, 18, 20, 21a and its ISIN, if assigned,
(c) the nominal value;
(d) an indication of the approval of the emission conditions and the prospectus by the Commission if the prospectus has been approved by the Commission;
(e) the code name of the bond;
(f) the yield of the bond or the method of determining it;
(g) the method of repayment of the bond (Section 12);
(h) the form of the bond and, in the case of bonds in the name and the name of their first owner,
(i) the issuer's obligation to pay its nominal value on the maturity date of the bond;
(j) the date of issue of the bond;
(k) the signature of the persons authorised to act on behalf of the issuer;
(l) the date or dates of maturity of the bond and the proceeds thereof; and
(m) place or places of payment.
(2) The requirements of the book-entry bond are not those referred to in paragraph 1 (d), (e), (i), (k) and (m).
Emission conditions
(1) The issue terms of the bond define the rights and obligations of the issuer and the holder of the bond and must include the requirements of the bond referred to in Article 3, with the exception of points (h) and (k), and
(a) an indication of the form and form of the bond and of any restrictions on its transferability,
(b) the time limit for issuing the issue of the bond (hereinafter referred to as the "emission period");
(c) the emission rate and, in case the emission rate is determined by the auction rate, the auction method;
(d) the total estimated volume of bond issuance at nominal value;
(e) details of the method and place of subscription of the bond;
(f) the method of calculating, where appropriate, the yield of the bond and, where additional advantages are attached to the bond, the method of determining it;
(g) information on the taxation of bond yield, 3)
(h) details of the participation of persons involved in the security of the issuance of the bond (Section 9);
(i) information on the limitation of bond rights (Section 23); and
(j) an obligation on the issuer to treat all holders of the bond equally under the same conditions.
(2) The terms and conditions of the issue also include the definition of other rights and obligations of the issuer and the holder of the bond, as well as more detailed information on the issue of the bond, where applicable under the specific terms and conditions of the issue and the intention of the issuer, in particular:
(a) specifying the rights and obligations of the issuer and the holder of the bond resulting from an exchangeable, priority or subordinate bond (Sections 21 and 21a);
(b) any right of the issuer to increase the volume of the issue and the conditions for such an increase (§ 3b);
(c) in the case of a bond the repayment or payment of which is guaranteed by a guarantee undertaking, the wording of the guarantee obligation;
(d) in the case of a bond the repayment or payment of which is secured by collateral, details of such collateral;
(e) for a bond the repayment of which is linked to the draw, the drawing method;
(f) any liability of the issuer that, until the maturity of the bond issue, it will not issue better secured bonds, or any liability to provide that bond in the same way as those other bonds,
(g) the designation of the public market operator for which the issuer intends to apply for admission to trading in the public market under the Securities Act or information that it does not intend to apply for such admission,
(h) whether and by whom an assessment of the issuer's financial capacity has been carried out and with what result or information that the valuation has not been carried out; and
(i) whether the separation of the right to the yield of a bond under § 11 is excluded.
(3) The terms of issue must be transmitted to the first acquirer of the bond free of charge. The provisions on the publication of a prospectus under the Securities Act shall apply mutatis mutandis to the disclosure of the issue terms of the bond. 1)
(4) The issuer may change the terms of issue only if the economic conditions under which they were determined have changed substantially and only after prior agreement between the holders of the bond (Section 13) and the Commission. The amendment of the emission conditions shall take effect after their approval by the Commission on the date of its publication in accordance with paragraph 3. The provisions of the first and second sentences shall not apply to changes in the data referred to in Article 3 (1) (a).
(1) The issuer is entitled to issue a bond
(a) in less volume of the issue of the bond than the expected volume of the issue, if it has not been able to achieve the expected volume of the issue by the end of the period of issue; the provisions of paragraph 2 are without prejudice to this; or
(b) in a larger volume of bond issuance than the expected volume of issue, unless investors' demand has been met by the end of the period of issue.
(2) The total volume of the issue of a bond at nominal value must not be less than the amount in Czech crowns corresponding to EUR 200 000, with the exchange rate notified by the Czech National Bank on the date on which the emission conditions were published for the conversion of EUR into domestic currency. If this amount is not reached by the end of the period of issue, the issuer shall be obliged to return the paid issue rate of the bond no later than 15 days after the end of the period of issue, together with interest at the rate of interest normally granted by the banks under the current account contract on the last day of the period of issue.
(3) The issuer shall notify the Commission and the Securities Centre of its decision pursuant to paragraph 1 (a) or (b) without undue delay and publish it in the same way as it published the terms of the issue. The same shall apply to the notification and publication of the facts referred to in the second sentence of paragraph 2.
Form of the bond
(1) The debenture shall be denominated in the bearer or in the name. The paper bond in the name is transferable by rubowriting and delivery. Specific legislation governing drafts shall apply to the rupebook.
(2) The issuer or the person authorised by it shall keep a list of the holders of a bond in the name. The rights attaching to a bond denominated in the name shall be entitled to be exercised by the person listed in that list in relation to the issuer, unless the Securities Act 1 provides otherwise. For the effectiveness of the transfer of a bond denominated in name against the issuer, a record of the change of the holder of the bond shall be required in the list of holders of the bond; the issuer shall carry out such registration without delay after such change has been demonstrated to it. In the case of book-entry bonds, the list of holders of the name-denominated bonds shall be kept by the person who keeps records of the holders of book-entry securities under the Securities Act.
(3) The transferability of a bond denominated in the name may be limited by emission conditions; This is not the case if it is a registered bond.
(4) Where the issuer limits the transferability of a name-based bond, it shall also define the terms of that restriction under emission conditions. If these conditions are not met, the bond transfer contract shall be invalid unless the bond transfer is subject to the approval of the issuer and the issuer gives its consent without undue delay after having become aware of the conclusion of such a contract.
(5) Where an issuer limits the transferability of a bond under paragraph 4 by making the transfer of a bond subject to its approval, the issuer's consent shall also be required to stop the bond. If the issuer does not decide within 2 months of the receipt of the request for the transfer of the bond or the termination of the bond, consent shall be granted.
(6) Where, in an individual case, the issuer refuses to grant the consent referred to in paragraph 5, it shall, at the request of the holder of the bond, repay the nominal value of the bond or, where the yield of the bond is determined in accordance with Paragraph 10 (2) (c), the issue rate of the bond (hereinafter referred to as "nominal value or the issue rate ') and at the same time pay the value of the accrued and yet outstanding return calculated on the date of repayment of the bond (hereinafter referred to as" proportional return'). An application under the previous sentence may be submitted within one month of the date on which the bond holder received the refusal to consent to the transfer of the bond. The right to apply the application under the previous sentence shall cease if it has not been exercised within one month of the date on which the refusal of consent to the transfer of the bond was served on the holder of the bond.
State guarantee
The State shall be liable for the obligations arising from the issuance of bonds only in the cases specified in the specific legislation, or if it expressly assumes such a guarantee obligation or if such a guarantee obligation passes on it.
APPROVAL OF THE EMISSIONS CONDITIONS OF DIFFERENCE
Application for approval and approval of emission conditions
(1) The Commission approves the terms and conditions of issue, together with the prospectus, where the Securities Act requires the approval of the prospectus, at the request of the issuer of the bond or, in the case of an issuer having its head office abroad, at the request of a securities dealer or a public market operator.
(2) The application referred to in paragraph 1 shall include:
(a) emission conditions;
(b) a written statement by the guarantor that he has taken over the liability of the issuer; and
(c) a written statement by the person who has undertaken to secure the issue of the bond pursuant to Article 9.
(3) If the emission conditions do not contain the required requirements, the Commission shall invite the applicant to complete them within 30 days of receipt of the call.
(4) The Commission is required to notify the issuer of the decision to approve or not to approve the emission conditions and the prospectus of the bond within 2 months of the date of receipt of the application or of its addition in accordance with paragraph 3.
(5) The Commission shall not approve the emission conditions if they do not contain the statutory requirements laid down after the expiry of the period referred to in paragraph 3.
(6) If the issuer does not initiate the issue of a bond within 6 months of the date of the acquisition of the legal power of the decision approving the terms of issue, that decision shall cease to apply.
(7) The Commission publishes in the Commission Bulletin information on the approval of individual bond terms of issue.
(8) An issuer having its head office in the Czech Republic, which issues a bond abroad, is obliged to inform the Commission and the Czech National Bank, at the latest on the date of issue of the bond, of the place of issue, the volume of the issue and the form and maturity of the bond.
Debt programme
(1) A bond issuer may apply for approval of those common emission conditions which are the same for an unspecified number of bond issues (hereinafter referred to as the "bond programme"). The application shall also specify the duration of the bond programme and the maximum amount of outstanding bonds issued under the bond programme.
(2) The maximum amount of outstanding bonds issued under a bond programme must not exceed at any time the issuer's duration of the bond programme.
(3) Article 7 shall apply mutatis mutandis to the approval of a bond programme.
(4) Prior to issuing each issue of a bond under a bond programme, the issuer shall draw up a supplement to the emission conditions, which shall include a reference to the bond programme and to the addition of the issue conditions in accordance with Article 3a, unless they are included in the bond programme, or other specific conditions in that issue, and shall ask the Commission for its approval. If the Commission does not send a decision approving the supplementation of the emission conditions within 14 days of the receipt of the application or its addition of missing elements, the supplementation of the emission conditions shall be deemed to have been approved. The approved emission allowance shall be published by the issuer in the same way as the bond programme has been published.
(5) Individual bond issues under the bond programme shall be considered as separate issues. Where a prospectus or a narrower prospectus has been published for a bond programme and bond issuance bonds issued under a bond programme are to be admitted to trading on the public market or offered publicly, the issuer or bidder may only draw up a supplement to the original prospectus or a narrower prospectus instead of a prospectus or a narrower prospectus. The supplement to the prospectus or to the narrower prospectus shall include a reference to the original prospectus or to the narrower prospectus, the specific terms and conditions of the individual issue of bonds not listed in the original prospectus or the narrower prospectus or in the addition to the emission conditions referred to in paragraph 4, and any changes which have occurred in the data contained in the original prospectus or narrower prospectus and which are capable of affecting the accurate and correct assessment of the quality of the bonds and their issuer.
DETAILS AND COMPLIANCE
Issue of a bond
(1) The issue of a bond may be secured by the issuer itself or through a person who obtains the issue or has a contractual obligation to become the first acquirer of the issue or those bonds by an issue which it fails to issue before the end of the period of issue and the number of which the contract shall determine if that person is entitled to such activities.
(2) Where the issue of a bond is ensured by several persons, the issuer enters into a contract with each person individually or only one of them, which it shall designate after obtaining the consent of the others.
Income of the bond
(1) The issuer is obliged to pay the yield of the bond in the manner and within the dates specified in the emission conditions.
(2) The yield of the bond may be determined in particular:
(a) a fixed interest rate;
(b) fixed interest rate and profit participation;
(c) the difference between the nominal value of the bond and its lower emission rate;
(d) the compound premium or premium, depending on the maturity date of the bond;
(e) the floating interest rate and, where appropriate, the development of exchange rates depending on the movement of interest rates or rates on the financial market;
(f) a combination of the above methods, except as referred to in (c).
Division of the bond yield right
(1) Where the emission conditions do not preclude this, the right to the yield of the bond referred to in Article 10 (2), except in the manner referred to in point (c), may be separated from the bond and linked only to the coupon as a separate security issued for the exercise of that right. The holder of a coupon has the right to pay the proceeds, the holder of the bond has the right to repay the nominal value.
(2) A coupon must be issued at the same time as the issue of the bond and for each bond yield separately.
(3) In the case of a book-entry bond to which ISIN is assigned, the Commission shall, when approving the emission conditions which permit the separation of revenue, allocate separate ISIN to:
(a) coupon bonds;
(b) a bond without coupons (hereinafter referred to as "separate principal"); and
(c) each coupon.
(4) In the event that the ISIN is not assigned, the designation referred to in paragraph 3 shall be provided by the person who keeps records of the book-entry securities.
(5) The person who keeps records of the book-entry bond with coupons shall, at the request of the holder of the bond:
(a) the division of this bond into separate principal and coupons; or
(b) the reconnection of the separate principal with coupons which are the property of the owner of the separate principal and for which the operative date for entitlement to the yield has not yet come.
Payment of the bond
(1) Unless otherwise provided for in this law, the issuer is obliged to pay back the bond on the date of its maturity. The maturity of the bond may be determined
(a) on a one-off basis at a specific date; or
(b) instalments laid down in emission conditions, either evenly or differentiated.
(2) The issuer is entitled to pay off individual bonds, including a proportional return, before their due date, only in accordance with the emission conditions which permit and define such repayment, at least in its scope and manner.
(3) The holder of the bond may request repayment of the bond before the specified maturity only in accordance with the terms of issue.
(4) On repayment of the nominal value of the bond before the specified maturity of the issue, all coupons not yet due shall be returned together with the bond. The value of unreturned coupons shall be deducted.
(5) The payment of the bond and the payment of the bond yield may be secured by the issuer itself or through a person entitled to do so under the Securities Act; (1) for the book-entry bond also through the person who keeps its records under the Securities Act.
(6) Own bonds acquired by the issuer before their maturity are not extinguished. Such acquired bonds must be recorded in the issuer's register separately from other bonds and are not associated with the right to payment of the bond or with the exchange or priority right provided for in Paragraph 21. The rights and obligations associated with the own bond held by the issuer shall cease to exist at the time of their maturity.
Debt holders' meetings
(1) The issuer or the holder of the bond may convene a meeting of the holders of the bonds issued in a single issue (hereinafter referred to as the "meeting of the holders of the bond").
(2) The issuer is obliged to convene a meeting of the holders of the bond in the event of draft changes to the emission conditions or changes referred to in paragraph 4 or other changes which may significantly affect its ability to meet the obligations arising from the bond.
(3) The costs of organising and convening a meeting of bondholders shall be borne by the party calling it.
(4) The meetings of the holders of the bond decide on the common interests of the holders of the bond and deliver an opinion on issues the resolution of which may affect the exercise of the rights attached to the bond, in particular the proposals
(a) changes in the emission conditions of the bond with the exception of changes in the data referred to in Article 3 (1) (a);
(b) to convert the issuer, 4)
(c) offers to take over the issuer by another entity, 5)
(d) to amend the bond programme referred to in Article 8 (4),
(e) the conclusion of a control or profit transfer contract, 6)
(f) for the sale or hire of a company (7) or part thereof,
(g) a joint procedure where the issuer of the bond is late in meeting the rights of the bond associated.
(5) The issuer or the holder of the bond, who shall convene a meeting of the holders of the bond, is obliged to publish a notice of the meeting of the holders of the bond in the manner laid down in the emission conditions, otherwise in at least two national newspapers, within a period of at least 15 days before the date of the meeting. The notice of the meeting of the holders of the bond shall include at least:
(a) the issuer's designation (business name and registered office);
(b) the name of the bond, the date of its issue and the ISIN, if assigned;
(c) the location, date and time of the meeting of the holders of the bond;
(d) the agenda and, when proposed, the amendment of the emission conditions, the definition of the draft amendment.
(6) The meeting of the holders of a bond is capable of being decided upon if the holder or holders of a bond participate, the nominal value of which represents more than 30% of the total nominal value of the issue of the bond. Prior to the opening of the bond holders' meeting, the issuer shall provide information on the number of all the bonds entitled to participate in the meeting in order to check the participation in the meeting.
(7) Unless otherwise provided for in the terms of the issue, the meeting of the holders of the bond shall be decided by a simple majority of the votes of the holders present. Each bond holder shall have as many votes as the ratio between the nominal value of the number of units of the bond that it holds in its assets of the total nominal value of the bond issue. The approval of bond holders whose nominal value represents at least three quarters of the nominal value of the bonds issued shall be required to agree to the change in the emission conditions. The exercise of the right to vote shall not be restricted by emission conditions.
(8) Where a meeting of the holders of a bond does not agree with one of the proposals referred to in points (a), (b) and (d) to (f) of paragraph 4, the issuer may at the same time decide that the issuer is obliged to pay prematurely to the holders of the bond the nominal value of the bond or its emission rate, including a pro rata return, no later than one month from the date of this decision.
(9) The person who was the holder of the bond on the date of the meeting of the holders of the bond and, according to the minutes referred to in paragraph 10, did not vote in favour of the opinion of the meeting of the holders of the bond on the proposals referred to in paragraph 4 (a), (b) and (d) to (f), or did not participate in the meeting of the holders of the bond, may, within one month of the meeting of the holders of the bond, request the payment of the nominal value or the issue rate of the bond as well as a proportional return, otherwise that right shall cease. The issuer shall comply with this request no later than one month after the date on which the application was received.
(10) The issuer shall draw up a record of the meeting of the holders of the bond, indicating the conclusions of the meeting. Where the meeting has discussed an opinion on any of the proposals referred to in points (a), (b) and (d) to (f) of paragraph 4, a notarial registration shall be issued for participation in the meeting referred to in paragraphs 6 and 7 and the decision to meet the holders of the bond. Where a meeting of the holders of a bond has agreed to one of the proposals referred to in points (a), (b) and (d) to (f) of paragraph 4, the notarial record shall include the names of the holders of the bond who have not expressed their consent and the number of pieces of the bonds each of those holders has in their possession at the date of the meeting.
(11) The meetings of the holders of the bond may be chosen by a joint representative and entrusted with the joint exercise of rights in a court or other body.
(12) The joint representative of the meeting of the holders of the bond shall be entitled to:
(a) exercise the right on behalf of the holders of the bond, bound by the opinions adopted by the meeting of the holders of the bond pursuant to paragraph 2;
(b) check compliance with emission conditions.
SPECIFIC SPECIES
Mortgage certificates
(1) Mortgage certificates are bonds the name of which includes the designation of the mortgage lien and whose nominal value, as well as the value of the proportional return, is fully covered by claims on mortgage loans ("proper cover") and, where appropriate, by a substitute under this law ("replacement cover").
(2) The mortgage loan is a loan that is granted for investments in real estate on the territory of the Czech Republic or for the construction or acquisition thereof, and the repayment of which, including the accessories (8), is secured by a lien on this, also built-up or other real estate on the territory of the Czech Republic.
(3) Mortgage certificates may be issued only by a bank which is entitled to this activity under special legislation9 (hereinafter the "mortgage bank ').
(4) In the name of the bonds which do not meet the conditions laid down for mortgage bonds under this Act, the designation of the mortgage lien shall not be indicated.
(1) Only mortgage credit claims may be used to properly cover the nominal value of mortgage bonds and their proportional yield. The mortgage loan may not exceed 70% of the price of the pledged real estate.
(2) The price referred to in paragraph 1 shall be determined by the mortgage bank which provides the mortgage credit as the usual price, taking into account the permanent characteristics of the pledged property and the return on its proper management.
(3) The property referred to in Article 14 (2) shall not be subject to any other lien of a third party which would be in priority order with a lien securing the claim included in the cover of mortgage bonds, as long as that claim is included in the cover; the transfer of this property may not be restricted under the legislation previously in force, except in the case of a lien guaranteed by a loan granted by a building savings bank under a special law. 10)
(4) Real estate shall not be considered to be encumbered by the previously established lien or by a restriction on the transfer of real estate if the claim thus secured by the third party ceases as a result of the use of the mortgage credit to repay it.
(5) If a mortgage loan is secured by a mortgage guarantee, the mortgage loan may be granted only up to the difference between 70% of the price of the pledged property and the amount of the claim on the building savings loan.
(6) The replacement cover of the nominal value of mortgage bonds as well as their proportional yield is possible only up to 10% of this nominal value, namely cash, deposits with the Czech National Bank, government bonds or securities issued by the Czech National Bank under a special law. 11)
(7) The assets used to cover the nominal value of mortgage bonds shall not be stopped by the mortgage bank.
(8) The mortgage bank is required to keep a separate record of the nominal value of the mortgage liens and their proportional return providing complete evidence to assess how the mortgage bank complies with the provisions of this Act.
The Ministry of Finance may, after consulting the Commission, lay down by decree the details of the method and legal coverage of mortgage bonds and municipal bonds.
Government bonds
(1) The bonds issued by the Czech Republic are government bonds.
(2) Government bonds are issued
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Regulation Information
| Citation | Act No. 530 / 1990 Coll., on Bonds |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 21.12.1990 |
|---|---|
| Effective from | 01.02.1991 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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