Independent intermediary

How do they get the authorisation?

By applying to the Czech National Bank, not by mere notification. The application is filed electronically, and the procedure has fixed conditions.

The applicant must have both a registered office and an actual place of business in the Czech Republic, and be trustworthy and professionally competent. Competence is proved by an exam with a person accredited by the Czech National Bank, and home loans have their own competence category, that is, their own exam scope.

A condition that gets overlooked also applies: anyone registered as an appointed representative cannot at the same time be an independent intermediary. One person, one role. So anyone setting up their own licence must first end their registration as an appointed representative.

How long does the authorisation last?

Until the end of the calendar year following the year of registration. After that it is extended by paying an administrative fee, always for a further twelve months.

Anyone who doesn't pay loses the authorisation when it expires. What this means for you: an entry in the register isn't a stamp from the past, it's a fact that someone confirmed and paid for this year.

Why must they be insured?

Because they are liable for their own work, and the law wants there to be something to pay out of if damage occurs. They must hold liability insurance throughout their activity, not just on the day of registration.

The minimum cover limits are not set by a Czech regulation, but by directly applicable European Union legislation. The law also limits the excess, so it cannot be set so high that the insurance becomes a mere formality.

An appointed representative does not carry this obligation themselves. Liability for their activity rests with the person under whom they are registered.

What are they liable for themselves?

For their own activity and for the people who work under their licence.

The law states this in two places. An offence committed in the course of an appointed representative's activity is attributed to the person they represent, not to that individual. And if an appointed representative causes harm to a third party while working, the person under whose licence they worked is liable for it.

For a client, this matters more than the title on the business card. The question isn't who is sitting across the table from you, but who is liable for that work.

How do I read their entry?

In the Czech National Bank's register. Every registered entity has an entry there, and four items in it are worth reading.

• Type of entity. This states the role they are registered in. One firm can hold more than one role, for instance also in insurance, and the entry covers each separately.
• Permitted activities. This expands into a checklist. Consumer credit for housing is a separate item from credit other than for housing.
• Dates on the authorisation. Besides the date it arose, there is also, for information, the date the decision became final.
• Links and history. Links show connected entities, so for an independent intermediary this also includes those working under them. The history summarises changes to the name, links and scope of activities since 2009.

The register can also show the status as of a chosen date, as far back as 1 January 2009. If you're dealing with a contract signed years ago, this lets you check whether that entity was registered at the time too.

One thing, by contrast, gets overrated: the address and contact details. The Czech National Bank only updates these for intermediaries based on their own notification, so an outdated address on its own means nothing.

What does supervision mean in practice?

That the authorisation can be lost. The Czech National Bank supervises intermediaries and can withdraw the authorisation if the holder stops meeting the conditions or seriously breaches their obligations.

Withdrawal has a consequence that isn't obvious at first glance. When the represented entity's authorisation ends, the registration of all appointed representatives working under them ends too. A single decision thereby shuts down a whole network.

That's why it's worth opening the register even for someone you already know. You can search by name or identification number, and the entry also shows who that person is linked to.

HypoGO falls into this category, and you can find our own entry the same way; the identification numbers are in the footer. Holding an independent intermediary's authorisation does not automatically mean agreements with banks: we don't hold those, our advisers do. How we work and who pays us is covered on the About HypoGO page, and the mechanics of remuneration in the intermediary's commission entry.

What does this get me as a client?

The assurance that behind the person stands a supervised firm with insurance and an authorisation that is renewed every year.

It doesn't mean this is better than an appointed representative. It just means a different structure of liability. Anyone who wants to see how this looks across the market in figures can find it in the mortgage adviser market overview.