In the world of finance there are concepts that may seem foreign to you. However, it is worth knowing who the issuer is and what his tasks are. In the simplest terms, an issuer can be defined as a person who is engaged in issuing securities. And more specifically? Feel free to read on.
What does issuer mean? Definition of the term
An issuer is an entity that issues financial instruments, such as stocks or bonds. The issuer is also responsible for the distribution and sale of financial instruments. An issuer may also be involved in other activities, such as market research, financial analysis or investment advice.
Scope of the issuer’s responsibilities
The issuer is the entity that is authorized to issue bonds. The issuer is also tasked with providing assistance to bondholders in exercising their rights. A stock issuer, on the other hand, is an individual or legal entity that owns shares and has the right to sell them. The issuer’s duty is also to maintain investment accounts that allow investors to track their investments. The issuer is also required to keep accounts and settle accounts with investors.
Who can be an issuer?
An issuer is a job for a select few, so not everyone can become one. Issuing securities is reserved for entities that fit into the rules of the financial market. Such entities can be natural or legal persons, the State Treasury, the State Bank, financial institutions, enterprises and local government. In order to become a bond issuer, one must register a business, open a business bank account, obtain funding to start a business, then prepare a prospectus. The next task is to register the bonds with the NDS, issue the bonds and sell them to investors. You also have to pay tax on the sale of the bonds and register them in the Issuer Registry system, and then keep track of the bond installment dates.
Issuer, and confidential information
The issuer is also obligated to take care of information that has been entrusted to it, which should not be passed on. Leakage of confidential information by the issuer risks loss of license, as well as financial penalty. Confidential information may be a company secret or may involve personal customer data. If an issuer leaks confidential information, customers may be entitled to compensation.
