What is a bond?
A bond is a transferable debt instrument used by States or companies to borrow money from investors.
How does it work?
In the majority of cases, an investor who buys a bond receives an annual coupon. This is an amount calculated on the basis of the interest linked to the bond. At the maturity date of the bond, the issuer repays the amount borrowed from the investor.
It should be noted that throughout their lifetime, some bonds are listed on a stock market. This provides investors with the opportunity to sell their bonds before the maturity date, or to buy other ones already issued on the market.
What rules apply?
Issuers whose bonds are admitted to trading on a regulated market are subject to various information obligations that result, inter alia, from the legislation on transparency, market abuse and offers of investment instruments to the public.
What does the FSMA do?
Where an offer is made to the public or bonds are listed in Belgium, the FSMA gives prior approval to the prospectus and related advertisements, or determines whether the prospectus was approved in another country.
If the rules governing the information note apply to the offer, the FSMA may, after the publication of the information note by the issuer and/or the offeror, verify its content as well as the advertisements for this offer.
For an offer to the public via a crowdfunding service provider, the FSMA does not approve the key investment information sheet in advance, but may, when the offer is made via a crowdfunding service provider authorized by the FSMA, verify its content afterwards.
The FSMA verifies whether the information is understandable for financial consumers and is in compliance with the law. The FSMA sees to it that consumers have a clear view of the costs and risks associated with the bonds.
Furthermore, the FSMA supervises the financial information disseminated by issuers as well as on the financial markets.
Where can I get more information?