The role and function of a bond security agent – problems and challenges
The role and function of a bond security agent – problems and challenges

Author(s): Martin Winkler
Subject(s): Law, Constitution, Jurisprudence, Law on Economics, Commercial Law, Comparative Law
Published by: Societatea de Stiinte Juridice si Administrative
Keywords: bond security agent; bond trustee; pledge; conflict of interest; legal liability; security interest;
Summary/Abstract: The legal regulation of the agent for securing receivables arising from issued bonds (bond security agent) in the Czech and Slovak legal system was inspired by common law, where the "bond trustee" is well established and brings long-term positive effects. However, since this is an institute derived from the legal regime of a trust, which has its roots in the common law legal system and the continental law did not initially know it at all, its application and legal regulation raises several legal problems (e.g. credit risk of the bond security agent, its conflict of interest, liability, termination of its position etc.). In this paper we analyze these problems and challenges, mostly derived from insufficient or unclear regulation and impact thereof on functioning of bond security agent in practice. We also propose several legislative changes of this legal institution.

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