The Central Securities Depository has updated its rules and regulations on the way to pledge an owner's account on which dematerialised securities owned by the pledgor are registered. The new rules provide information on the interpretation and evaluation of the practicality of pledging an owner's account. The procedure is generally similar to the pledge of a single share.
A pledge of shares is a popular and practical security instrument used by obligors to secure loans from banks. Due to an amendment to the Securities Act and the Capital Markets Act, it is now possible to make the whole account (including all securities registered thereon) subject to a pledge. An account pledge should work like the common pledge of a single share, but with more flexibility in its establishment.
A Czech court has issued a surprising judgment in a case about the holding-type grouping of the role of a bank as both an agent of a syndicate and a secured creditor in the insolvency proceedings of a borrower company. The repercussions of the judgment may have both legal and economic consequences for the future of the banking sector.
The new Criminal Code has come into force. Some new crimes which were not criminalised under the previous regulations are of particular importance to the banking sector - for example, the crime of data-carrier damage and infringement of computer equipment through negligence may have serious consequences for bank employees.
Until recently, the Czech Republic ranked among those countries in which financial assistance is prohibited under the legal penalty of absolute non-validity of a legal act. However, a recent amendment to the Commercial Code has introduced new rules on financial assistance and lifted the prohibition. The new rules enable financing banks to obtain more complex security packages for acquisition finance purposes.
The use of payment instruments in the European Union varies significantly from country to country, since each member state has tailored standards and practices according to its national legislative needs. The payments industry has actively sought to remedy this situation by adopting the EU Payment Services Directive, which is set to be implemented in the Czech Republic in Autumn 2009.
If a bank's claim as creditor is not satisfied by a debtor, compensation can be obtained in one of three ways: through a court sale, through enforcement by a private executor or through a compulsory public auction. This update focuses on a bank's enforcement of receivables before the commencement of insolvency proceedings.
This update summarizes some of the important legislative changes to affect the banking sector in 2008. Changes include an amendment to the Act on Banks to increase the insurance coverage of deposits and an amendment to the Consumer Protection Act to provide a more detailed specification of unfair, misleading and aggressive business practices.
The Czech Parliament recently passed Act 344/2007 to amend the Commercial Code, whereby, among other things, the legislation on financial collateral was amended. This update highlights the most important changes that the amendment has made to the financial collateral regime.
The Supreme Court of the Czech Republic has issued a landmark decision regarding the doctrine of culpa in contrahendo - that is, liability for damage caused by a breach of the pre-contract obligation under Czech law. The bank sued the borrower for the legal fees in connection with arranging and negotiating loan documentation.
The House of Deputies has adopted a draft bill substantially amending the Banks Act. The bill is designed to transpose the EU Basel II Directives, which deal with capital adequacy. The bill will also result in a new implementation decree of the Czech National Bank regulating the business practices of banks, savings and credit cooperatives and stock brokers.
Parliament has considered a bill to harmonize Czech law with several EU directives, including the EU Financial Collateral Directive. 'Financial collateral' is defined as a secured debt of a financial character which can be created in several ways, including through a security pledge for a receivable arising from a cash deposit.
The single bank licence concept has been introduced into Czech law through the Banking Act. As a result, foreign banks, as well as certain other financial institutions that have their registered seat in an EU member country, may conduct business through branch offices in the Czech Republic without a licence from the Czech National Bank.
Although the government has indicated that the country's recent floods will not impact significantly on the country’s economy, the fact remains that many Czech businesses and citizens suffered considerable damage. In response to the situation, certain Czech banks are offering special products such as reduced-rate purpose-specific loans and interest-free bridge loans.
Including: Introduction; Act on Public Auctions; Voluntary Public Auction; Involuntary Public Auction; Comment; Conclusion.
A Czech National Bank regulation that prescribes new capital adequacy rules for banks has taken effect. The regulation requires banks to consider credit risk, as well as market risks including risks related to derivative instruments.
Following a week of bank-runs by depositors, the Czech National Bank imposed receivership on Investicni a Postovni Banka, the third largest Czech bank. The bank has been taken over by Ceskoslovenska Obchodni Banka, which as a result has become the country's largest bank.