Regulatory Alerts2004-10-15
CNB Guidelines on Due Care
The Czech National Bank (CNB) issues these guidelines to clarify the interpretation and application of the legal concept of 'due care' for capital market service providers. The document establishes that due care requires both professional competence and diligent action, assessed objectively based on the circumstances existing at the time of the transaction rather than hindsight. It outlines the scope of application for various market participants, including securities dealers and investment funds, and details specific obligations regarding investor protection, internal controls, and conflict management.
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