Bond Indenture

The legal document that states the rights and obligations of bondholders and issuers is known as a Bond Indenture. Before the bonds are issued to the public, an issuing organization’s Board of Directors and shareholders must provide a unanimous approval. Bonds are regulated by the Securities Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). Registration with the SEC requires stating the number of bonds authorized to be issued, par value, contract interest rate, when interest payments are to be made, and other relevant information. Bonds are usually offered in denominations of $1000 or $5000.

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