- The term 'bond' will include deposit certificates and certificates of deposit.
- 'Trading with securities' is newly defined as providing a service to a third party (including selling and buying of securities on behalf of the third party, and now also lending and borrowing of securities, and intermediating these transactions). This activity is subject to special Ministry of Finance permission.
- The law newly recognises the possibility to trade with 'options and forward derivatives' (rights relating to securities) which is considered as the first step to the creation of derivativ market in the Czech Republic.
- 'Stock lending' is defined as a new legally binding type of contractual relationship.
- An 'owner of dematerialized security' is stipulated to be an entity on account of whom security is registered 'Ownership of a yield from shares and bonds' is further defined.
- Multiple 'mortgage rights' over the same security is restricted which reduces the risk of using this financial instrument.
- Multilevel records of the Securities Center Register may be created in the form of subregisters. Other legal entities will be entitled on an individual contractual basis to administer such part of the Securities Center Register. This change will not affect the protection of the owners of securities as all the obligations resulting from the above will be guaranteed by the State.
- The Securities Center will be obliged to provide specific information about publicly traded securities upon request. The Securities Center will update this information weekly.
The content of this article is intended to provide a general guide to the subject matter. It is therefore not a substitute for specialist advice.
For further information contact Paul Antrobus or Richard Fletcher, Arthur Andersen Prague, tel +42 2 2440 1300 or enter a text search 'Arthur Andersen' and 'Business Monitor'.