Legal Q&A · Company financing

Can a network of financial agents sell our bonds?

Law as at 9 August 2026

Answered by , Czech and Slovak attorney, admitted to the Slovak and Czech Bars (SAK 300422 · ČAK 19654).

Short answer

Only an investment firm or bank may place an issuer's bonds; financial agents may not provide this regulated investment service to the issuer. They may participate in other stages of the distribution chain serving clients, but cannot provide placement of the issue. This must be resolved before designing the distribution model because it changes the economics of the entire issue.

Placement is a reserved investment service

In its supervisory benchmark on corporate bond distribution, the National Bank of Slovakia states the rule unequivocally: only an investment firm or bank may place an issuer’s bonds. Other participants in the distribution chain, namely financial agents, may not provide this regulated investment service. A financial agent’s authorisation therefore does not allow it to place bonds for an issuer.

The difference lies in who receives the service. Placement is a service provided to the issuer, under a contract and for remuneration from the issuer. Financial intermediation serves the client. An issuer hiring an agent network to “place” an issue is therefore ordering a service the network cannot provide.

Why this must be resolved at the outset

The distribution model determines the issue’s budget and timetable. If an investment firm or bank must be involved between the issuer and clients, this changes the remuneration structure, contractual documentation and who defines the target market.

Further rules apply if the issue is distributed to retail clients:

  • The target market is defined by the investment firm or bank; an independent financial agent may narrow it but not broaden it.
  • High-risk bonds should be offered only by salespeople who understand them and have experience with such instruments, supported by documented product training.
  • The NBS expects these bonds to be distributed generally with investment advice, accompanied by a suitability statement for the particular client.
  • Remuneration must not be based exclusively on quantitative targets, namely sales volume.

What this means for the issuer

Distributors, rather than the issuer, fulfil these rules. However, the rules determine whether a distributor will accept the issue and on what terms. If the proceeds refinance existing debt, the issuer and investment firm or bank disclose this to the other participants in the chain so they can inform clients of the increased risk. The NBS considers issues refinancing loss-making projects particularly risky.

See also wording you must not use in issue marketing and our bond issuance in Slovakia service.

This answer provides general information on the law as at 9 August 2026. It does not constitute legal services or replace an assessment of an individual case. The details of your situation may differ. Book a consultation to discuss them.

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  4. What is phantom stock, and when is it better for a company than actual equity? Phantom stock is a contractual arrangement giving an employee a cash entitlement linked to the company's value, typically conditional on continued service, performance and events such as a company sale. The employee does not become a shareholder, ownership is not diluted, and administration is the simplest of all ESOP structures. To work, the arrangement must appear in a contract with the individual concerned, rather than only in a shareholders' agreement.

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Mgr. Patrik Tulinský, LL.M. Czech and Slovak attorney · SAK 300422 · ČAK 19654

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