Furthermore the AMF calls on distributors that contact, or are contacted by, retail clients to acquire these bonds to perform proper due diligence and take into account the risks involved in these investments.
The AMF has noted an increase in recent months in the number of public bond offerings in France that require its approval. Since these issues are intended for a broad constituency, the AMF draws the attention of investors – especially retail clients, most of whom are private individuals – to the risks involved. It recommends investors to carefully scrutinise the risk factors relating both to the issuing company and to its bonds before taking a decision. These risks are set out in the prospectus and the summary; they must also be described in the marketing materials, in accordance with prevailing regulations.
In particular the bond yield, which may seem attractive, must be viewed in light of the credit risk, i.e. the risk of non-redemption, depending on the issuer's financial position and prospects. Another risk to consider is the possibility that liquidity may be low or nonexistent throughout the life of the bond.
Furthermore the AMF calls on distributors that contact or are contacted by retail clients with a view to acquiring these bonds to perform proper due diligence and take into account the risks involved in these investments.
In October 2009 the AMF published:
- a best practices guide for marketing bonds to retail investors
- an educational guide to bond investing.
© AMF - Autorité des Marchés Financiers
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