Law 8/2013, on 9 may, on the organisational requirements and operating conditions of the operating entities of the financial system, the protection of the investor, market abuse and financial collateral agreements since the General Council at its session of 9 may 2013 has approved the following: law 8/2013, of 9 may on the organisational requirements and operating conditions of the operating entities of the financial system, the protection of the investor, market abuse and financial collateral agreements preamble this law on the organisational requirements and operating conditions for the exercise of the activity of the operational entities of the financial system, the protection of the investor, market abuse and financial collateral agreements is part of the premise is fixed from the beginning of the normative development of the financial system, consisting of the fact that Andorra must maintain a structurally and functionally sound financial system and is committed to a clarification of the legal framework in force in Andorra that regulates the financial system.
For this purpose, the law incorporates the basic administrative regime of the operating entities of the financial system that to date was established by law 14/2010, of the 13 of may of the legal regime of the banking entities and basic administrative regime of the operating entities of the financial system (hereinafter law 14/2010) which has been the subject of several modifications in order to clarify the intention of the legislator and standardise the administrative regime of the entities operating in the financial system to comparable standards to the international level in this area; I have added the process and official register of administrative acts (ex Title IV of law 14/2010) as an integral part of basic administrative regime of the operating entities of the financial system. In relation to this new section of the administrative regime, that has been the subject of some modifications in order to take into account the new casuistic linked to the international expansion of the operating entities of the Andorran financial system, from the adoption of the law 14/2010.
At the same time, it has been used to incorporate in this legislative text, the few provisions still in force of the law of organization of the Andorran financial system, of 27 November 1993, not covered in any other legal reference, and consequently, once this incorporation, it has proceeded to the repeal of that law.
On the other hand, the law also incorporates the provisions provided for in the second chapter of title III of the law 14/2010 relating to the protection of the investor which have also been subject to certain modifications in order to clarify the interpretation of the standard in force to date and provide, as well, a proper compliance on the part of the entities to which it applies.
As a new key element of the law, it is worth mentioning the incorporation of the fourth chapter on the use of privileged information and market manipulation, that is to say, the abuse of the market, which falls within the framework of the commitments on the part of Andorra, with the signature of the Monetary agreement, which include the signing of the protocol of understanding of the multilateral international organization of Securities Commissions related to the query cooperation and the exchange of information between the competent authorities in the area of supervision and inspection of practices of abuse that are signatories of the multilateral agreement protocol, within a maximum period of 18 months from the entry into force of the Monetary Agreement, on 1 April 2012.
Finally point the incorporation of the content of the sixth additional provision of law 14/2010 relating to contractual compensation agreements, given their relevance, in the articles of this law as Chapter five, adapted to the provisions laid down at European level in the Directive 2002/47/EC of the European Parliament and of the Council, of 6 June 2002 on financial collateral agreements amended by Directive 2009/44/EC of the European Parliament and of the Council , may 6, 2009, that modifies the Directive 98/26/EC about the firmness of the settlement in the payments and securities settlement systems and Directive 2002/47/EC on financial collateral arrangements as regards linked systems and credit rights; directives that are also part of the section "banking and financial legislation" of the annex to the Monetary Agreement.
Thus, the law on the organisational requirements and operating conditions of the operating entities of the financial system, the protection of the investor, market abuse and financial collateral agreements is structured in five chapters, sixty-three articles, an additional provision, a transitional provision, repeal and final provisions a five.
The law is divided into five chapters:-First: General provisions-second: organisational Requirements and operating conditions of the operating entities of the financial system-third: the protection of the investor-Fourth: on the use of privileged information and market manipulation-Fifth: contractual and financial collateral agreements compensation agreements.
The chapter on the General provisions contains two articles; the first defines succinctly the object of the law while the second one sets the definitions contained and used in this.
The second chapter, it is divided into four sections and twenty-seven articles giving continuity to what was expected until the date the law regulating the Andorran financial system of 27 November 1993 and the law 14/2010. The first section contains the organizational requirements for the exercise of the activity of the operational entities of the financial system. The second section contains the operating conditions for the exercise of the activity of these entities. The third section provides for the obligations with regard to accounting and auditing of the annual accounts. And finally, the fourth section details the process and the official register of administrative acts of depositories.
Then, the third chapter is divided in nine articles and contains the requirements for the protection of the investor also giving continuity to that anticipated up to date law 14/2010 that the principles set out in the EU Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004, known as MiFID (Markets in Financial Instruments Directive) relating to markets in financial instruments.
Then, the fourth chapter is divided into two sections and sixteen articles. The first section contains the principles to be applied in order to prevent market abuse practices; in particular, establish the requirements in order to prohibit the use of privileged information and market manipulation in order to preserve the smooth functioning of financial markets in general as well as the powers of the administrative authority in the area of ITS JURISDICTION as an abuse of the market and the framework for international cooperation with other competent authorities in the area of supervision and investigation of the practices of market abuse; and finally, a second section that establishes the system of sanctions in the area of market abuse.
Then, the fifth chapter of the law is structured into nine articles, and contains the rules that regulate the contractual netting agreements or financial guarantee.
Finally, among the provisions of the final part of the Act, include: supplementary provision which States that the first, second and third chapters of this law are subject to the system of sanctions established by the law regulating the disciplinary regime of the financial system of 27 November 1997; the transitional provision that establishes a transitional period of three months for the entry into force of articles 46 and 47, and a transitional period of six months for operational entities of the Andorran financial system to adapt to the provisions set out in the first and second section of the second chapter and in the third chapter of this law, with the understanding that all the rules established in these provisions from the first and second chapters of title III of the law 14/ 2010, still fully in force throughout this transitional period. The first final provision which States that the Government, at the proposal of the Ministry responsible for finance must establish the specific accounting standards for operational entities of the financial system and should determine the subsidiary rules inherent in its application and its development; the second final provision enables the INAF to establish the obligations of the INAF for self-employed operations of managers of the operational entities of the financial system with values of such entity; the third final provision enables the INAF to develop via issuance of technical releases the provisions set out in this law; the fourth final provision provides for the amendment of section 8 of the preliminary title of the law 10/2008 of 12 June, regulating collective investment bodies of Andorran law and the fifth final provision that establishes the date of entry into force of the law.
For all the above, the law implies the repeal of articles 1 to 7, 18 to 44 and 46 to 55 of the law 14/2010, of the 13 of may of the legal regime of the banking entities and basic administrative regime of the operating entities of the financial system; the Decree of 12 October of 2011, by which is delegated to the Institut Nacional Andorrà de Finances the development of the provisions laid down in articles 22 to 42 of the law 14/2010, of the 13 of may of the legal regime of the banking entities and basic administrative regime of the operating entities of the financial system; and the law of the Andorran financial system of 27 November 1993.
Chapter first. General provisions Article 1 object of the Act the object of this law is to establish:-the organisational requirements and operating conditions for the exercise of the activity of the operational entities of the financial system;
-the minimum requirements to be followed by operational entities of the financial system in order to ensure the protection of the investor;
-the obligations, prohibitions and sanctions related to the abuse of the market by any natural or legal person, understood as the operations based on the use of privileged information and market manipulation, in order to contribute to the integrity of financial markets and to enhance investor confidence in markets fingers; and-the legal framework of contractual compensation agreements and agreements of financial guarantee.
Article 2 Definitions 1) abuse of market: the market abuse consists in the use of privileged information and market manipulation.
2) senior management: senior management are considered administrators and the general direction of the institution.
3) channels of distribution: any channel through which the information is disclosed or may disclose publicly in one or several people.
4) Client: client is considered, all natural or legal person to whom an operating entity of the financial system offers a product or service in the exercise of their activities in accordance with its administrative authorization.
5) annual accounts: the annual accounts correspond to the documents and the information provided in the current accounting standards for the financial system.
6) general direction: it is understood by members of the Department who have a general manager or assistant general manager and those who are part of the upper body of the entity.
7) controlled Entity: a controlled entity shall be understood as any company in which: a) a natural or legal person has the majority of the voting rights; or b) a natural or legal person has the right to appoint or dismiss a majority of the members of the administrative organ, of direction or control and, at the same time, it is a shareholder or associate of this company, or c) a natural or legal person is a shareholder or associated and controls alone, pursuant to an agreement concluded with other shareholders or members of that company the majority of the voting rights of the shareholders or associates of this, or of) a natural or legal person may exercise a dominant influence or control or effectively exercised.
8) analysis or other information that recommend or suggest a strategy of investment: the concept of study or other information that recommend or suggest a strategy of investment refers to: a) information produced by an independent analyst, an investment bank, a Bank, or any other physical or legal person, the main activity of which is the preparation of recommendations and that , directly or indirectly, expresses a particular investment recommendation on a financial instrument or an issuer of financial instruments;
b) information produced by people who are not mentioned in the letter a) recommends a particular investment decision relating to a financial instrument.
9) significant influence: significant influence is the power to intervene in the decisions of financial policy and operations of the investee company, without having the full control or the control of the investee.
10) Insider: is meant by inside information, the specific information, which has not been made public and which refer directly or indirectly to one or more issuers of financial instruments or to one or more financial instruments and which, if made public, could influence appreciably on the quotation or the price of those financial instruments or on the stock market or the price of derivative financial instruments related to them.
With regard to derivatives on commodities, inside information means information, specific character, which has not been made public, which refer directly or indirectly to one or several of these derivatives and which users of markets on which they are traded these products would expect to receive in accordance with accepted practices in these markets.
In relation with the persons in charge of the execution of the orders relating to financial instruments, can also be considered privileged information all information sent by a client in relation to their own pending orders, which is specific in nature, which refer directly or indirectly to one or more issuers of financial instruments or to one or more financial instruments and which , if made public, could have significant repercussions on the price of those financial instruments or on the price of related derivative financial instruments with them.
11) Financial Instruments: financial instruments is understood to mean the wider sense of the term, and especially those that are listed below: a) negotiable securities;
b) money market instruments;
c) shares of CROS;
d) swaps, futures, options contracts (swaps), term interest rate agreements and any other derivative contracts relating to securities, currencies, interest rates or yields, or other derivatives instruments, financial indices or financial measures which may settle in kind or in cash;
e) swaps, futures, options contracts (swaps), term interest rate agreements and any other derivative contracts relating to commodities that must be settled in cash or may be settled in cash at the request of one of the parties (for different reasons of non-compliance or of another fact that leads to the termination of the contract);
f) swaps, futures, options contracts (swaps) and other derivative contracts related to commodities that could liquidate in species, as long as they are traded on a regulated market or in a multilateral trading system;
g) swaps, futures, options contracts (swaps), term interest rate agreements and any other derivative contracts relating to commodities that can be cleared via physical delivery, not mentioned in the previous section and not intended for commercial purposes, which present the characteristics of other derivative financial instruments, taking into account, among other things, if you are settled through recognised clearing houses or are subject to regular adjustments of the margins of warranty;
I) derivatives for the transfer of credit risk;
j) financial contracts for differences.
k) swaps, futures, options contracts (swaps), term interest rate agreements and any other derivative contracts relating to climatic variables, transport costs, emission permits or types of inflation or other official economic statistics, you have to settle in cash or they may settle in cash at a choice of the parties (for reasons other than breach of or another event that leads to the termination of the contract) , as well as any other derivative contracts relating to assets, rights, obligations, indices and measures not mentioned in the previous sections, which have the characteristics of other derivative financial instruments, taking into account, among other things, if they are traded on a regulated market or in a multilateral trading system, if you are settled through recognised clearing houses or are subject to regular adjustments of the margins of guarantee.
12-regulated Market regulated market): a is a) everything that appears on one of the lists relating to these markets of the Member States of the European Union as well as the rest of the trading markets of securities and financial instruments for third countries authorised and/or supervised by an authority to operate in accordance with international standards in the field of regulation and supervision of financial markets; or b) any market or multilateral trading system of securities or financial instruments that have regular functioning and that are subject to rules laid down by the competent authorities relating to the operation of the market and the conditions of access, for admission to trading, of transparency and of protection similar to those of the markets to which the preceding paragraph refers, and which is considered as such by the INAF.
13) market Operator: one or several people who manage and/or act directly on a regulated market. The market operator may be the same regulated market and its management bodies.
14) qualified Participation: for the purposes of this Act, qualified participation are understood to be the one that comes, directly or indirectly, to a 10 to 100 or more of the capital or of the voting rights in the company participated. It also has the consideration of qualified participation which, without reaching the percentage pointed out, allowing them to exercise a significant influence in the company.
15) Person in the exercise of an Office Manager in a sender: for the purposes of this law, the concept of person in the exercise of an Office Manager in a sender refers to: a) the person who is a member of the governing bodies, management or supervision of the sender;
b) the person who is responsible for high level which, without being a member of the bodies mentioned in the letter a), have access to privileged information usually related, directly or indirectly, with the sender and have competence to adopt management decisions that affect the future development and business prospects of this issuer.
16) Person closely associated with a person exercising an Office Manager in an issuer of financial instruments: for the purposes of this law, the concept of person closely associated with a person exercising an Office Manager in an issuer of financial instruments refers to:
to the spouse of the person) of exercising a management position or anyone related to her and considered as equivalent to the spouse by the Andorran legislation;
b) the children in charge of the person exercising the executive position, the children of their spouse and of any person connected with it and considered as equivalent to the spouse;
c) other relatives of the person exercising a management post, your spouse and any person connected with it and considered as equivalent to the spouse, and who live with her to a minimum period of one year; and any legal person), legal instruments of trust or association, in which occupies a position directing one of the people quoted in the lyrics), b) and c) above, or which is directly or indirectly controlled by such a person, or that has been created for the benefit of that person, or the economic benefits which are largely equivalent to those of such person.
17) Recommendation of investment: it is understood by analysis, investment advice or any other information that recommends or suggests an investment strategy, explicitly or implicitly, concerning one or several financial instruments or the issuers of these, including any opinion about the present or future value or price of fingers instruments, the fate of which are the distribution channels or the public.
18) negotiable securities: are understood by negotiable securities categories which are negotiable on the capital market, with the exception of instruments of payment, such as: a) companies and other securities equivalent to shares in companies, partnerships or other entities, and certificates of deposit are representative of actions;
b) bonds or other forms of titulitzat debt, including certificates of deposit are representative of these values; and c) all other securities which grant the right to acquire or to sell these negotiable or which give rise to a cash settlement determined by reference to negotiable securities, currencies, interest rates or yields, commodities or other indices or measures.
Second chapter. Organisational requirements and operating conditions of the operating entities of the financial system Article 3 scope of application The organisational requirements and operating conditions set out in this chapter are applicable to the exercise of the activity of the operational entities of the financial system which are formed by the following four types: a) banks;
b) financial institutions-non-banking specialist credit;
c) management companies of collective investment institutions;
d) investment financial institutions:-financial investment societies;
-investment financial agencies;
-asset management companies;
-financial advisors.
First section. Organisational requirements Article 4 accession to professional associations all the operational entities of the financial system must be attached to a professional association which, in addition to protecting the general interests of its members, should take initiatives aimed at improving the technical standards of the sector; promote sectoral cooperation that respects the exercise of mutual competition; ensuring transparency in the application of conditions to customers and ensure compliance with the ethical standards inherent to the profession.
The professional association will be the interlocutor of the INAF for matters of general interest in the sector.
In the case of entities belonging to a group, the fulfilment of the obligation set out in this article can be achieved at the level of the group. Therefore, the representation of the interests of the participating financial institutions to other operational entities of the financial system can be carried out through the professional association to which belong the operating entity of the financial system of the group header.
Article 5 rules of conduct 1. The operational entities of the financial system should ensure the proper functioning and the stability of the financial system and, for this purpose, are required to avoid any practice that might infringe on the good uses and customs or put at risk the ethical principles and professional conduct of the financial sector.
2. operational entities of the financial system, in the development of their activities, must act with honesty, fairness and professionalism, in the best interest of the customers and, in particular, comply with the provisions contained in the legislation.
3. Additionally, the INAF can dictate technical releases targeted to establish guidelines on ethics and conduct rules applicable to the operating entities of the financial system in accordance with international standards widely recognized.
4. operational entities of the financial system, the senior management, its employees and its financial agents are subject to the duty of confidentiality in the workplace and to professional secrecy. To this end, shall take all measures of prudence and caution are appropriate with a view to the safeguarding of this duty of confidentiality. The violation of the duty of confidentiality in the workplace and professional secrecy, unless legal cause of justification, it constitutes a crime in the terms envisaged in the criminal code.
5. operational entities of the financial system will act in accordance with the principles that make up the concept of Corporate Social responsibility and regularly inform their specific action in this area.
Article 6 organizational Requirements 1. The operational entities of the financial system must have solid corporate governance procedures, including an organizational structure and provided to the nature, scale and complexity of its activities, the risks to which it is exposed and the nature and type of services provided. Likewise, this organizational structure must be clear, with well defined, transparent and consistent lines of responsibility, as well as effective procedures to identify, manage, control and communication of risks to which the entity is or is likely to be exposed such as credit risk, liquidity risk, currency risk, interest rate risk, operational risk and reputational risk along with adequate mechanisms of internal control, including administrative and accounting procedures. The INAF accurate, by the issuing of technical releases, what are the risks that specifically need to be covered by the risk management policies of the operating entities of the financial system.
2. The Board of Directors of the operating entities of the financial system defines the level of risk that the organization is ready to assume, and approves the corresponding risk management policies, to monitor compliance and periodically takes the appropriate action to correct any deficiency.
3. The Board of Directors of the operating entities of the financial system must approve the code of ethics and conduct, internal control policies and regulatory compliance policies, and monitored on a regular basis the compliance as well as to adopt the appropriate measures to correct any deficiency.
4. operational entities of the financial system must establish, maintain and implement policies and procedures that are appropriate and sufficient to ensure that the Organization, senior management, staff and financial agents comply with the obligations established in this law that designates and any other legislation.
5. operational entities of the financial system that encapçalin a group of companies have received from their subsidiaries abroad the information necessary to ensure that the compliance with the requirements established to give group organizational in this article, as well as to carry out the monitoring and supervision of its subsidiaries and the management of its risks. In addition, these entities must receive from their overseas subsidiaries the information necessary in order to comply with the requirements of the INAF in the framework of the exercise of the functions which are assigned to it by the legislation.
Article 7 technical and administrative Organization 1. Technical structures and administrative organisation and, in a special way, the policies and procedures of internal control, compliance, risk management, information systems security, confidentiality and integrity of data and business continuity, operational entities of the financial system must maintain internationally comparable quality standards in the sector and to promote the development of the activities under conditions that facilitate its quality and safety.
2. operational entities of the financial system must have some information systems, management, administrative, accounting and control, functionally autonomous with regard to any related entities, without prejudice to the latter to participate in its implementation. In the event that the company deems it appropriate, it may request an exceptional authorization to the INAF in respect of this requirement of technical and administrative organization.
3. operational entities of the financial system must have the technical and human resources necessary for the development of its activities that are appropriate to the nature, scale and complexity of its activities, the risks to which they are exposed and the nature and type of products and services provided. In particular, the operational entities of the financial system must have the technical and human resources necessary to ensure the confidentiality and integrity of the data available, as well as the continuity and regularity of the provision of services that ensures, in case of interruption of its systems and procedures, the preservation of data, the continuity of the functions and the maintenance of essential services and When possible, the timely recovery of those data, the functions and the full restoration of services provided.
4. operational entities of the financial system must carry out monitoring and periodic assessment of the adequacy and the effectiveness of their technical and administrative organization.
Article 8 Outsourcing of operational entities of the financial system functions that rely on a third party, permission of the INAF, the realization of operating functions relevant to the provision of services and the carrying out of activities of continuing and satisfactory way, must adopt appropriate measures to avoid that increase operating risk unduly; in any case the outsourcing of functions can lead to the exoneration of responsibility of the operational entities of the financial system in front of their customers.
Second section. Operating conditions Article 9 role of compliance 1. The operational entities of the financial system must have a compliance body that, acting with functional independence, carried out the supervision, monitoring and verification of compliance with legal and regulatory obligations and effectively permanent, ethical standards and code of conduct and the internal policies of the institution, by the institution, the senior management, his staff and the financial agents that designates in order to protect customers and reduce the risk of compliance and other risks associated with their activities.
2. To ensure that the compliance operate properly and with functional independence, organizations must ensure that they comply with the following conditions: a) the compliance body should be endowed with the authority, the necessary technical resources and human resources with the appropriate skills and experience to ensure the proper development of its functions and have access to all relevant information;
b) must appoint a compliance manager who has to take care of the development of the function, as well as to draw up regular reports on compliance with, among others, facilitate the evaluation and monitoring of the proper fulfilment of the policies on the part of senior management; and (c)) the people in charge of this function cannot participate in the carrying out of the services or activities that control.
3. In the case of entities belonging to a group, compliance with the obligation contained in this article could achieve in the field of the group permission of the INAF.
4. In any case, the operational entities of the financial system are not obliged to comply with the condition stipulated in the letter c) of paragraph 2, provided that depending on the volume, the scale and complexity of their activities can prove that compliance with such a requirement is not provided, and that the procedure for verifying the compliance continues to be effective.
Article 10 risk management function 1. The operational entities of the financial system should have a risk management function to develop the following tasks: to) advise senior management in relation to the establishment of risk management policy and the determination of the level of risk tolerance of the Organization;
b) to establish, implement and maintain risk management procedures that enable them to identify, assess, manage, control and reporting of management of risks arising from the activities of the Organization;
c) measures, effective processes and mechanisms to manage the risks associated with the activities, processes and systems of the body, depending on the level of risk tolerance approved by the Board of Directors; and d) check: i) the policies and procedures of management of risks of the entity are suitable and effective;
II) the level of compliance, by the Organization and by the competent people, policies, processes, procedures and mechanisms defined and established by ensuring an adequate management of the risk to which they refer the letters b) and (c) above); and iii) that measures taken to address any deficiencies in the design or in the application of policies, procedures, measures, processes and mechanisms are appropriate and effective, and indicate those cases in which the staff of the institution does not comply with these measures, processes and mechanisms, or not to apply the policies and procedures.
2. operational entities of the financial system should have, when is provided in accordance with the nature, scale and complexity of the activity, of the risks to which it is exposed and the nature and type of products and services provided, an organ that, acting appropriately and independent, meets the following conditions: a) to be equipped with the necessary technical resources and human resources with the appropriate skills and experience to ensure the proper development of its functions;
b) appoint a person responsible for risk management that should be responsible for the management of risk, as well as to draw up regular reports on the management of risks by, among others, facilitate the evaluation and monitoring of the proper fulfilment of the policies, the procedures and the mechanisms of risk management of the company to senior management; and (c)) the people in charge of this function cannot participate in the carrying out of the services or activities that control.
3. In the case of entities belonging to a group, compliance with the obligation contained in this article can be achieved in the field of the group permission of the INAF.
4. In any case, regardless of the existence, or not, of a body of risk management; all the operational entities of the financial system must be able to demonstrate that the risk management function is exercised effectively.
Article 11 internal audit function 1. The operational entities of the financial system should have, when is provided in accordance with the nature, scale and complexity of the activity, of the risks to which they are exposed and the nature and type of products and services provided, an organ that, acting independently, deploy the function of internal audit in order to examine, evaluate and monitor the adequacy and effectiveness of the internal control system , to formulate conclusions and recommendations and verify its implementation to contribute to the improvement of the system of internal control and corporate governance. To this end, they must develop, maintain and run a risk-based audit plan.
2. In the event that the obligation contained in paragraph 1 is applicable, should be appoint a person of the entity in charge of the internal audit body, with enough experience, knowledge and authority to promote the independence and proper functioning of the internal audit function as well as the proper consideration of the communication of the work carried out and appropriate actions on the recommendations made.
This person is responsible for the development of the function, the preparation of the corresponding newspaper reports to senior management, which highlight the conclusions and the most significant recommendations, as well as the monitoring of the effectiveness of the measures adopted.
At the same time, the internal audit function will be to draw up an annual report to gather the opinion of internal audit in relation to the design and operating effectiveness of the internal control system and risk management of the entity. This report should be assigned to senior management for their evaluation and the appropriate action, if necessary. A copy of this annual report should be forwarded to the INAF in the course of the first six months following the close of the financial year of reference.
The Unit ensures the development of the internal audit function should be equipped with the technical and human resources with the necessary experience for the proper development of its functions.
3. The universe to be audited by the internal audit body must include: a) the functions externalized by third parties; and b) authorized activities carried out by agents of the Organization, in particular, the activities in connection with the procedures of marketing as well as the fulfilment of the obligations of information and of the ethical standards and conduct that may apply.
4. In the case of entities belonging to a group, compliance with the obligation contained in this article can be achieved in the field of the group permission of the INAF.
Article 12 protection of customer assets 1. The operational entities of the financial system, when they have at their disposal the assets of their clients, must take reasonable measures to protect the rights of their clients on the financial instruments and the funds that the trust, keep the misuse and set records that make it possible to distinguish the assets of each client and the. For this reason, the financial instruments and the cash from customers should be deposited in an account or accounts different from those in which are deposited the financial instruments and cash belonging to the institution, through accounts with different name in the accounting of the third party or other equivalent measures with which to get the same level of protection of clients ' assets.
2. Except for the banks, who can keep deposits and other non-refundable funds of their clients in accordance with the legislation in force, the rest of the operating entities of the financial system that receive cash from customers have placed quickly in a central bank, in a bank in Andorra, in a bank belonging to a country of the OECD or in a bank belonging to a country that is subject to standards of regulation and supervision that the INAF deems equivalent to in force in Andorra.
3. In any case, the operational entities of the financial system that are dipositàries, custodians or deposited in a third party, financial instruments and/or cash, must meet the following requirements: to) keep all records and accounts that may be necessary to enable them, at any time and without delay, to distinguish the assets of a client of assets from other customers, and their own assets;
b) keep the records and the accounts so that you ensure the accuracy and, in particular, the correspondence with the financial instruments and the observance of customers;
c) take reasonable measures to ensure that the financial instruments or the observance of customers received from the settlement of the command executed are assigned to the account of the client in accordance with the standards of liquidation of the relevant market;
d) to reconcile your accounts and internal records regularly with those of third parties in power of which are those assets, either in an individual account, in a global account or omnibus account; appropriate organizational measures and e) to manage carefully and diligently the assets of clients and/or the rights relating to those assets, in accordance with its strict instructions or, failing that, in the best possible conditions.
4. operational entities of the financial system, when they have at their disposal the assets of their clients, they must establish a written policy and procedures to ensure the protection of these assets in accordance with the volume and complexity of activities related to the Administration and custody of assets of customers. This policy should include information on the procedures for the selection and continuous evaluation of the custodian or custodians where they deposited the assets and the factors that are taken into consideration in its selection and maintenance. Finally, the entities must be put at the disposal of clients who request an updated document containing a list of the depositaries and custodians in which are deposited the assets of customers.
Article 13 management of conflicts of interest 1. The operational entities of the financial system shall take appropriate organizational and administrative measures to detect and prevent conflicts of interest that may arise at the time of the provision of any investment or service Wizard from the same company, senior management, staff, financial agents appointed by the entity and its clients or between customers, could damage the interests of one or several customers.
2. For this purpose, it is understood that there are conflicts of interest in the provision of a service when the operating entity of the financial system, people referred to the previous section or another customer or customers have an interest in the provision of the service, or in its outcome, which is different from the interest of the client to which the service is provided and you can generate a prejudice to the latter , or when another customer or customers can get a profit or avoid a loss, and there is the possibility of concomitant loss to the customer to which it provides the service.
3. operational entities of the financial system must establish a written policy and procedures for the prevention and solution of conflicts of interest that are appropriate to their size, the Organization, the volume and complexity of their activities. Managers, employees and the financial agents, or any person related to a relationship of control, are subject to the same rules for the prevention and solution of conflicts of interest to the organisation.
Article 14 Transparency 1. In order to protect the legitimate interests of the clientele of the operating entities of the financial system establishes that the document or documents that reflected the agreement between the company and the customer, as well as any contract, is formalized in writing or in any other durable, that reflect clearly the obligations and the rights of the parties, which will put at the disposal of the client a copy of the document signed by the entity and entities that do meet his clientele the conditions, including the costs of their operations.
2. The entities must inform their customers with the maximum speed possible, taking into account the established communication systems between the entities and the client, the relevant issues relating to the operations contracted for them, and have to collect immediately new instructions, if applicable.
3. operational entities of the financial system must establish, implement and maintain effective and transparent procedures that allow a reasonable and rapid treatment of claims filed by customers or potential customers, and must keep a record of each complaint and the measures taken for their resolution.
Article 15 Records 1. The operational entities of the financial system should create a record that includes the document or documents that reflected the agreements between the company and the customer and that contain the rights and obligations of each of the parties and the other conditions under which the company provides the service.
2. operational entities of the financial system must keep track of all types of operations and services that carry out and, in any case, at least, a record and a record of operations. These records must be kept for at least 5 years from the date of receipt of the order or execution of the operation and, when the entity has made a suspicious operation in the area of market abuse in front of the INAF, should keep the relevant records, at least 5 years from the date of that communication, and, in any case , up to the closing date of the investigation if necessary. If upon expiry of this period, the administrative or judicial procedure open to continue in relation to the orders or operations subject to these records, these will have to be held until the date of completion of the procedures mentioned above.
3. This register should be enough to allow monitoring of compliance with the requirements provided for in the legislation and, in particular, of all the obligations of the entities that provide investment services in relation to your customers or potential customers.
4. operational entities of the financial system must keep the records that are mentioned in the previous sections in a support that allows the storage in such a way that these records are appropriately safeguarded and, in accordance with the legislation in force, are accessible to the company, its customers, its auditors, the INAF, or any other authority that there is need to have access.
5. The provisions set out in the preceding paragraphs of this article shall apply without prejudice to the compliance with the rules in force which regulate the obligation of conservation of accounting documents and contract.
Article 16 information to customers 1. The operational entities of the financial system must be put at the disposal of its clients, in time and form, the information needed to allow customers to make decisions with full knowledge of the risks and costs associated with the services and products or operations.
2. operational entities of the financial system must be put at the disposal of their customers appropriate reports pertaining to the services provided to clients and fingers for these operations; These reports must include details of the costs and expenses associated with fingers or operations services.
3. operational entities of the financial system must be put at the disposal of its customers or potential customers all the information provided for in the legislation.
Article 17 Advertising advertising communications of the operational entities of the financial system should be transparent, impartial, clear and not misleading. At the same time, they must be understandable by the target audience which they were headed, they must be clearly identifiable as advertising communications and must comply with all the current regulatory framework in this area.
The third section. Accounting and audit of the annual accounts the annual Accounts Article 18 1. The operational entities of the financial system have made the individual annual accounts.
2. The operational entities of the financial system, according to the provisions of the following paragraph, they must formulate consolidated annual accounts.
3. The operational entities of the financial system are all groups of companies in which the parent company is an operating entity of the financial system or has as its main activity the possession of shares in one or more operating entities in the financial system, and those groups where, including one or more operating entities in the financial system, the activity of these is the most important of the group.
4. The individual and consolidated annual accounts of the operating entities of the financial system to include the financial statements and the information set out in the applicable accounting legislation. These documents must clearly reflect the true picture of the assets, their financial situation, results of operations, cash flows and the nature of the risks of the company or of the group.
5. The formulation of the annual accounts of the entities mentioned in the previous section should hold to the accounting principles, the rules of valuation and classification, as well as the models for the presentation of financial statements established by the regulations in force.
6. operational entities of the financial system have to adjust your tax year to the calendar year.
Article 19 external Audits 1. The operational entities of the financial system are required to audit their annual accounts and, where appropriate, consolidated. The operational entities of the financial system created during the last quarter of the year may request authorisation from the INAF to remain excluded from this obligation during the first year, as long as the INAF deems appropriate in accordance with the nature, scale and complexity of its activities, products and services provided and of the risks to which it is exposed. In this case, must submit the accounting of this last quarter along with the corresponding accounting in the next exercise in the second year.
2. Without prejudice to the rules of instrumental techniques of the INAF relating to the annual accounts, the institutions mentioned in the first section should be sent to the INAF anyalment a copy of your individual and consolidated annual accounts, together with the corresponding audit report. Submission of audited financial statements to the INAF has been carried out in the course of the three months following the close of the financial year or period under audit.
3. operational entities of the financial system must be taken out at any time a company auditor responsible for the external audit of its financial statements. This appointment has to be approved by the general meeting of shareholders of the operating entities of the financial system, responsible for the appointment of external auditors, on the basis of a proposal of the Board of Directors and prior authorization of the INAF. In order to comply with the precepts established in this law, the appointment of auditors should ensure that an auditor is at all times responsible for the audit of the operating entity of the financial system.
4. Whenever possible, the entities mentioned in the first section and the affiliated entities and controlled by any of these entities must have hired the same auditing firm.
5. The external auditor and/or the auditor must be independent of the audited entity and does not participate in the decision making of the latter. In this sense, the auditor and/or the external auditor may not maintain any professional relationship or employment, either directly or indirectly, with the entity audited. The company auditor and/or external auditor may not keep any financial relationship, commercial or otherwise, either directly or indirectly, with the entity audited, on the basis of which the INAF may reach the conclusion that the independence of the auditor and/or the external auditor is compromised. If the independence of the external auditor and the entity or auditor will see compromised by any factor, the external auditor and/or the Auditor are required to establish the necessary safeguards to reduce these factors and to avoid compromising their independence. In the event that the safeguards will not adequately reduce the factors that compromise their independence, the external auditor or the auditor will refrain from carrying out the audit.
6. The external auditors and the auditing should respect the ethical standards of the most demanding professionals. In this sense, the external auditors and the auditing should take into consideration the principles reflected in the code of ethics of the International Federation of Accountants (IFAC).
7. The auditor is appointed for a maximum period of 4 years, renewable, without under any circumstances overall calculation of this appointment may exceed 8 consecutive years. At the expiration of each appointment, the Board of Directors of the operating entities of the financial system, or the delegate Committee of the Council for this purpose, you must carry out an evaluation process of its auditor to consider whether or not to renew it. This evaluation process should evaluate whether the auditor complied with their legal obligations, and regulatory professionals in the development of his mandate. The Board of Directors must inform the INAF of the criteria used for this evaluation and its conclusion and, where appropriate, request the appropriate prior authorization and, subsequently, must inform the general meeting of shareholders and to propose the renewal or change of auditor. In any case, the auditor cannot be hired again until two years from the end of the last contract.
8. Hire a different Member of the same auditor entity, despite the fact that belongs to a subsidiary of another country, it is not considered to be compliance with the provisions of the previous section.
9. The direction and the signature of the work of audit may correspond to one or more members of the same organization auditor. The audit reports can not be signed with the logo of the organisation mentioned and is required the signature of the responsible partners who have been in charge of the field work carried out in the entity audited. The reports may not be signed by other members of the same organization that have not participated in the work.
10 in the event that the external auditors should have knowledge of the existence of elements likely to significantly affect the stability of the institutions mentioned in the first section, you must issue a report immediately and the audited entity has an obligation to send a copy to the INAF. If within a period of five working days the auditor does not have reliable verification that there has been this shipment, you must send a copy of the report to the INAF. In the event of a change of auditors, the auditor who must comply with this requirement has the effect his appointment by the general meeting of shareholders.
11. The external auditor or auditors should provide the INAF, in addition to the complementary reports and information set out in the legislation and in the rules of instrumental techniques of the INAF, all the information requested by the INAF in relation to the audit work carried out by the auditor in an operational entity of the Andorran financial system.
12. The audit of the individual and consolidated annual accounts of the operating entities of the financial system has been carried out in accordance with the provisions of the international standards of Auditing issued by the International Auditing and Assurance Standards Board. The INAF is enabled to establish complementary norms to the mentioned in the previous point as long as it sees fit.
13. The audit entities and their employees or external auditors, in the context of his performances in operational entities of the Andorran financial system, are subject to the duty of confidentiality in the workplace and to professional secrecy. To this end, shall take all measures of prudence and caution are appropriate with a view to the safeguarding of this duty of confidentiality. The violation of the duty of confidentiality in the work environment and/or professional secrecy, unless legal cause of justification, it constitutes a crime in the terms envisaged in the criminal code.
14. the auditors or audit entities that violate the obligations derived from the sections above and/or that do not run the demands and requests of the INAF established supervision and control in the media relating to the disciplinary regime of the financial system, will be sanctioned with a penalty of 1,000 to 30,000 euros and professional disqualification in Andorra for a period not exceeding five years If the breach has been caused by negligence; or with a penalty of up to 30,001 150,000 euros and his ultimate professional disqualification in Andorra, whether the breach has been produced intentionally.
15. For the graduation of sanctions on entities or audit auditors, within the limits established in the preceding point, it has to take into account the gravity of the danger created and/or damages caused and the strong sanctions that have been imposed for the last five years.
Section four. Process and the official register of administrative acts Article 20 the acts subjected to initial communication, prior authorization and/or registration 1. Are subject to initial written communication to the INAF, prior to the start of all actions of the company and of the process of prior permission, certain significant events. The operational entity of the Andorran financial system must notify the INAF his intention to carry out or initiate actions to such purpose, must provide the information, documents and data available at that time, and should be noted especially the motivation and the strategic objective of the operation or the fact statement.
Is subject to this initial communication the intention to carry out the following actions: a) the acquisition of shares in entities or business activities, Andorra or abroad, including the creation of entities or business activities abroad, with the vocation of permanence;
b) the dissolution of entities, the completion of business activities or the transfer of shares in one of these entities or business activities, Andorra or abroad;
c) mergers, spin-offs and other corporate restructuring operations of the operational entities of the financial system or its subsidiaries, provided that they are controlled by these entities, or any other relevant corporate operation;
d) the modification of the corporate purpose in that place, or is intended to carry out financial activities;
e) the intention to carry out actions that may significantly affect the organizational structures and/or operational, including the resources and the necessary means to carry out the activity of the operating entity of the financial system or its subsidiaries;
f) any other fact that the entity consider that is significant for its impact on the results, solvency or the stability of the operating entity of the financial system or its group.
2. operational entities of the financial system must be requested to the INAF prior authorisation and/or registration in their records the following events: a) Acts subject to the prior authorization of the INAF and subsequent registration: i) the changes in the shareholding of the operational entity of the Andorran financial system when you imply that some of the shareholders reach, increase or reduce a qualified participation or , regardless of their participation, to attain representation to the Board of Directors of the entity;
II) changes and appointments of the senior management of the operational entities of the Andorran financial system, including the changes of position or function of the members of the senior management;
III) changes and the appointments of senior management with responsibility at the level of the group in the context of an operational entity of the financial system that is part of a group, and in which, in addition to the corresponding positions in the senior management of the matrix, be created senior management positions with responsibilities at the level of the group other than those of the matrix individually considered;
IV) extensions or reductions of capital stock, although it does not involve a change of shareholders ' stake, as much of the operational entities of the Andorran financial system and its subsidiaries provided they are entities controlled by these;
v) the issuance of bonds or other titles of non-bank credit that recognize or create a subordinate liabilities on the part of the operating entity of the financial system or an entity controlled, directly or indirectly, to this;
vi) the creation and/or acquisition of entities, with the vocation of permanence and with qualified participation, as well as the opening of overseas branches or representative offices on the part of the operational entities of the financial system, including the acquisitions of shareholdings, direct or indirect, involving the achievement of a qualified participation;
VII) changes in the percentages of participation, direct or indirect, of the operational entities of the financial system in other societies, that imply the increase or reduction of a percentage equal to or greater than 5% in their participation in the company owned;
VIII) the granting of loans to affiliated entities;
IX) mergers or splits of the operating entities of the financial system or its subsidiaries provided they are entities controlled by these;
x) the processes of liquidation and/or dissolution of entities operating in the financial system or its subsidiaries provided they are entities controlled by these;
XI) any relevant changes that may occur in the operating entities of the Andorran financial system or its subsidiaries, provided that they are controlled by these entities, in connection with the authorization granted by the INAF and/or the foreign supervisor authority;
XII) significant facts that may lead to a modification of the organizational structures and/or operational, or management of the activity of the operational entities of the financial system or its subsidiaries provided they are entities controlled by these;
13th century) the changes and appointments to external auditors in the operational entities of the Andorran financial system and its subsidiaries provided they are entities controlled by these; and xiv) any other fact that the entity consider that is significant for its impact on the results, solvency or the stability of the operating entity of the financial system or its group.
b) Acts subject to registration, in addition to those that already have a prior authorization: i) the acquisition of non-qualified investments, directly or indirectly, in entities or business activities, Andorra or abroad, including the creation of entities or business activities abroad, with the vocation of permanence;
II) changes in the shareholding of the operating entities of the financial system or its subsidiaries not included in the cases of section a above);
III) changes in senior management in the participating organizations for the operational entities of the Andorran financial system when this participation has the character of qualified;
IV) the existence of people who, in their condition of financial agents, acting in the name and/or on behalf of the authorized institution and establish relations with the customers of the entity;
v) and/or modification of strategic alliances;
vi) the amendments of the articles of Association of the operational entity of the Andorran financial system or its subsidiaries, when these modifications are not included in the above cases;
VII) the registration of the appointment of the Secretary or Vice-Secretary to the Board of Directors of the operating entities of the Andorran financial system and/or its subsidiaries, when these do not act on said Board in quality of Directors; and viii) extinction or of operational entities of the Andorran financial system and/or its subsidiaries.
3. the INAF is enabled to reduce, enlarge or modify the acts subjected to initial communication, prior authorization and/or registration of the acts listed in this article, if it is necessary for the proper exercise of its functions, through the issuance of technical communications.
Article 21 organisation responsible for the INAF is the body responsible for resolving requests for prior authorization and/or for registration set forth in the previous article, as well as to establish and update the official registers containing the information of the entities related to the acts listed in the previous article.
Article 22 requests for prior authorization To have full effectiveness, prior to the completion of the acts, the operating entities of the financial system must submit to the INAF requests for prior authorization relating to the acts referred to in the letter a) of paragraph 2 of article 20.
Article 23 registration Applications operating entities of the financial system must submit to the INAF registration requests relating to the acts referred to in paragraph 2 of article 20 in a maximum period of seven working days from the date on which occurs the event that has been registered. The INAF is enabled to extend this period upon request on the part of the entity.
Article 24 documentation to be attached to requests
The entities must attach to the application the support documentation on compliance with the legislation in force of the acts for which it is requesting the prior authorization and/or the registration by virtue of which may not be affected negatively, in a meaningful way, the technical, economic and professional guarantees of the entity. The INAF establishes by means of technical release the minimum content of the documentation to deliver in each case.
Article 25 supplementary information the INAF may request supplemental information entities that it considers convenient or appropriate in relation to the event object of the initial communication, prior authorisation or registration.
Article 26 period of resolution and notification the INAF has resolved and notify requests for prior authorization and registration within a maximum of thirty working days from the date of filing of the application or, where applicable, the date of delivery of the additional information, as well as to inform of the existing resource.
Article 27 Denial the INAF deny prior authorization and/or registration if, in the review of the documentation, it follows that the Act to authorize and/or register does not conform to the legislation in force or may negatively affect a significant way the elements that constitute technical, economic and professional guarantees of the company or its group.
Article 28 operational entities of the financial system Resource can lodge an appeal against the decisions of the INAF in front of the Administrative Section of the Court of Batlles within thirteen working days starting from the day after the notification of the resolution.
Article 29 Uniqueness of administrative procedures 1. When requests for prior authorization and/or registration of the acts referred to in article 20 is submitted, in application of the legislation in force, in other administrative bodies, in the register of companies or in the registry of Commerce, among others, guest must send, within a maximum period of one month, all the documentation of the INAF, in order that this can apply for and/or register in the corresponding registry.
2. In the cases mentioned in the previous paragraph, the entities concerned should attach to the application the appropriate documentation so it can be forwarded to the INAF.
Third chapter. The investor protection Article 30 scope the provisions contained in this chapter are applicable to the operating entities of the financial system that provide investment services or ancillary services in accordance with its administrative authorisation and the legislation in force.
Article 31 classification of customers 1. The operational entities of the financial system referred to in article 30 must be classified as retail customers all their customers or clients professionals. Are retail customers all customers who are not considered professional clients.
2. operational entities of the financial system referred to in article 30 must inform each of its customers, of the particular category in which they have qualified, as well as of their right to request a different classification and the consequences that may arise with respect to their protection.
3. In the event that one of the operational entities of the financial system referred to in article 30 want to consider some of its professional clients as eligible counterparty in accordance with the provisions in article 33; You must inform you, before you carry out any transaction with this counterpart, that, according to the information available, it is considered an eligible counterparty and that will treat it as such unless both parties agree to another treatment.
Article 32 professional Customers 1. Considered professional clients customers who possess the experience, the knowledge and the necessary qualification to make their own investment decisions and properly assess the risks inherent in these decisions and, in particular, the following: a) the banks; financial institutions-non-banking specialist credit; investment financial institutions, organizations of collective investment, including venture capital and securitisation, and their management companies, domestic and foreign insurance companies, pension funds and their management companies, the operators in raw materials and commodities derivatives and the operators who contract for themselves, and in general, any entity with financial activity , now or in the future, be under the supervision of the INAF;
b) employers that individually meet two of the following requirements: i) the total of the assets is greater than or equal to 20 million euros;
II) that the amount of their annual business turnover is equal to or higher than Euro 40 million;
III) that their own resources are equal or superior to 2 million euros.
c) States and the public in general; the public bodies that manage public debt; the central banks; the INAF, international and supranational bodies such as the World Bank, the International Monetary Fund, the European Central Bank, the European Investment Bank and other similar international organisations; and d) other institutional investors, the usual activity of which is to invest in financial instruments, including entities dedicated to the securitisation and other financial transactions.
However, when the customer is one of these entities, the operating entity of the financial system referred to in article 30 must inform you, before you provide any service, which, according to the information available, it is considered to be a professional client, and will treat it as such unless both parties agree to another treatment.
2. Also considered professional clients customers not mentioned in paragraph 1, provided they give up expressly and in writing the treatment as retail customers and that express that wish to be treated as professional clients at all times or only in respect of a type or of a particular investment service or transaction.
The operating entity of the financial system referred to in article 30 must warn customers professionals clearly and in writing about the protections and rights for compensation of which can remain private and customers must declare in writing, in a document separate from the contract, that they are aware of the consequences of his resignation to these protections.
However, before accepting the waiver request, the operating entities of the financial system referred to in article 30 shall take all reasonable measures to ensure that the customer in question has a competition, an experience and knowledge to ensure reasonably, in view of the nature of the operations or services, which are able to make their own decisions in matters of investment and understand the risks that arise. In the case of customers who are legal entities, the evaluation mentioned above, must be made to the person with the power to perform the operations in the name and on behalf of these clients.
Likewise, before accepting the waiver request and within the framework of the previous evaluation, operational entities of the financial system referred to in article 30 must check that the client complies, at least two of the following requirements: i) carried out, on a stock market, significant volumes of transactions with an average frequency of 10 per quarter, at least during the past four quarters;
II) that the value of the customer's financial instruments portfolio, made up of cash deposits and financial instruments exceeds 500,000 euros; and iii) which occupies or has held, at least for a year, a professional in the financial sector that requires knowledge of the transactions or services envisaged.
Article 33 eligible Counterparties 1. The operational entities of the financial system referred to in article 30 may initiate and carry out transactions with eligible counterparties without being obliged to comply with the obligations provided for in article 37 in relation to these operations or with respect to auxiliary services directly related to these operations.
2. For these purposes, can be considered as eligible counterparties entities and operators stipulated in letters a) and c) of section 1 of the previous article, without prejudice to the right of such entities to request, either general or for each transaction, the deal as customers; in the latter case the operating entity of the financial system is subject to the fulfilment of the obligations of information set out in the following articles of this chapter and may treat these entities and operators as professional customers, without prejudice to the right of such entities to request treatment as retail customers.
3. In addition, if the customer requests it, you can also consider eligible counterparty any legal entity that has the consideration of professional client in accordance with the previous article. In this case can only be recognized as an eligible counterparty in respect of services or transactions for which can be treated as a professional client, and as long as they get the express confirmation of the client that accesses to be treated as an eligible counterparty, in general or for each operation.
Article 34 Incentives for the purposes of this law, are considered incentives allowed the following: a) the fees, commissions, or the non-monetary benefits paid or delivered to a client or a person acting on their own, and those offered by the customer or by a person acting on his own;
b) fees, commissions or the non-monetary benefits paid or given to a third party or a person acting on behalf of the third party, and are offered by a third party or by a person acting on behalf of the third party, provided that the following conditions are met: i) the existence, nature and amount of the fees, Commission or non-monetary benefits or in the event that the amount cannot be determined, the method of calculation, are displayed clearly to the client, so complete, accurate and understandable, before the provision of investment services or corresponding Wizard; However, will allow this communication to customers is made for summarized reporting on the system of fees, commissions or non-monetary benefits, as long as the company commit to communicate the information in more detail to the client when it requests; and ii) that the payment of incentives to increase the quality of service provided to the customer and that your payment is not hinders the fulfilment of the obligation of the Organization to act in the optimal interest of the client;
c appropriate fees) that allow for the provision of investment services or are necessary to this end, such as costs of custody, settlement and exchange fees, regulatory fees or expenses for legal advice and that, by its very nature, cannot conflict with the duty of the Organization to act with honesty, fairness and professionalism in accordance with the interest of their customers.
Article 35 Obligations of information 1. Any information that the operational entities of the financial system referred to in article 30 direct to their customers, current or potential, including advertising, communications must be transparent, impartial, clear and not misleading and should be understandable for any member of the group to which it is addressed or by the prospective recipients.
2. In the case of broadcast in different languages, the information provided by the entity should be homogeneous.
3. In the event that the measures required by article 13 are not sufficient to ensure reasonably that the risks of damage to previndran client's interests, the operating entity of the financial system must clearly disclose the general nature or the origin of conflicts of interest before acting on behalf of the client.
4. before a retail customer, current or potential, will bind with an operating entity of the financial system to pay for investment services or ancillary services and for the purpose that enables it to understand the nature and risks of the investment service and of the types of financial instrument that you offer and you can take investment decisions with knowledge of cause , this entity is required to provide, in advance, appropriate information on: a) the entity, with the registration number in the corresponding JURISDICTION in their administrative authorization, as well as the services that it offers in accordance with it, and the identification data and contact details of the organisation supervisor;
b) are communication devices that are used between the client and the company, including the means by which the client must have at their disposal documents and other information of the entity, as well as the ways of sending and reception of orders;
c) if the entity is acting through a financial agent, the identification of this;
d) are financial instruments and investment strategies, including information, guidelines and appropriate warnings about the characteristics of the products, the risks associated with investing in these financial instruments or in relation to the strategies used, including, if applicable, information about the risks associated with leveraged strategies, the risk of total loss of the investment, or the reduced liquidity of the instrument the volatility of the price, or any warranty or any other required margin similar obligation applicable to certain financial instruments;
e) asset protection policy of the company;
f) conflicts of interest management policy, which allows you to provide summary form to clients or potential clients, as long as the company commit to inform and put at the disposal of customers or potential customers more detailed information of such policy;
g) management policy and execution of orders, including the policy of attribution of orders if applicable; and h) expenses and the associated costs.
5. operational entities of the financial system, when they have at their disposal the assets of its customers, retailers must provide them, among others, if applicable, the following information: a) the possibility that the assets of the client are retained by a third party on behalf of the entity and the entity's responsibility for non-active fingers guarded;
b) the possibility that the assets of the client may be deposited in an account omnibus global or of a third party and the associated risks;
c) the existence and the terms of any guarantee or retention of law that the company or a depositary have or may have on the customer's assets or any right of compensation in relation to such assets; clear, comprehensive and accurate information and d) about the obligations and responsibilities of the company regarding the use of these financial instruments, including the conditions for their return and the inherent risks; which should be provided by the entities to the client before carrying out financial transactions of securities related to financial instruments maintained by a customer account or use them for its own account or for the account of another client, and with sufficient and durable support.
6. operational entities of the financial system that provide investment services consisting of the discretional, individualised management of portfolios in accordance with the mandate given to retail customers must be incorporated in the contract between the company and the customer, among others, the following information: the customer's investment objectives with consideration of your suitability test, the breakdown of the categories of assets in which you can invest , the types of customer information, the duration of the contract and the ability to delegate or outsource services.
Article 36 evaluation of the appropriateness and adequacy of the 1. The operational entities of the financial system that provide investment services consisting of the discretional, individualised management of portfolios in accordance with the mandate given by the customers and/or advice on investment matters should be requested, before paying them, information to customers about their knowledge and their experience in the investment field corresponding to the type of product or service specifically what it is and about their financial situation and investment objectives in order to be able to recommend the investment services and financial instruments that best suit the customer. The information related to the knowledge and the experience has not been requested in the case of professional clients. When it provides the service of investment advice to a professional client, you can assume that can support financially any investment risk consistent with its investment policy. In the event that the company does not obtain the information requested, it should refrain from recommending to the client investment services or financial instruments.
2. operational entities of the financial system that provide investment services other than those mentioned in the previous section must be requested, before paying them, information to customers about their knowledge and their experience in the investment field corresponding to the type of product or service object of the transaction or provision, in order to be able to evaluate whether the product or service is appropriate for the client. The information related to the knowledge and the experience has not been requested in the case of professional clients.
When, in accordance with the information provided by the client, the entity considers that the service or the financial instrument is not suitable for the client, you must warn you of your opinion and make a record of this warning. In the event that the customer does not provide the information requested or provided is not sufficient, the entity should warn the client that this prevents to determine if the service or financial instrument subject to the provision or transaction is suitable for the client.
3. However, the operational entities of the financial system that provide investment services consisting of the reception, transmission and execution of customers ' orders in relation to one or more financial instruments, can provide them without becoming subject to the fulfilment of the obligation to obtain the information or make the assessment set forth in the preceding paragraph, provided that the following conditions are met : a) the services relating to shares admitted to trading on a regulated market or an equivalent market, money market instruments, in bonds or other securities representing debt, to collective investment institutions and/or other non-complex financial instruments;
b) that the service is provided on the initiative of the customer, current or potential;
c) that the customer is informed, before providing the service that, for the provision of this service, the operating entity of the financial system is not required to assess the adequacy of the financial instrument or investment service object of the transaction or provision and that, therefore, the client does not enjoy the protection provided for in the previous paragraphs; and d) that the operational entity of the financial system complies with the obligations set out in article 13 and paragraph 3 of article 35.
4. For the purposes of compliance with the tests of suitability and adaptation provided for in this article, the operating entities of the financial system are entitled to rely on the information provided by the client, unless this information is manifestly inaccurate or incomplete.
Article 37 management and execution of orders
1. operational entities of the financial system that provide investment services consisting in the execution on behalf of customers of the orders to buy or sell one or more financial instruments must take all reasonable steps to obtain the best possible result for its clients when running your orders, taking into account price, costs, speed, likelihood of execution and settlement , the volume, nature or any other consideration relevant to the execution of the order.
However, in the event that the client gives specific instructions for the execution of the order, the operating entities of the financial system must execute the order following the specific instructions of the client.
2. Likewise, the entities mentioned in the previous section also must have procedures and management systems that ensure the timely, fair and fast execution of the orders of the customers in front of other orders of customers or of the particular interests of the same entity, and allow the execution of the orders of the customers, which are equivalent to according to the time they are received by the entity.
3. In order to be able to comply with the provisions of the first section, the operational entities of the financial system must establish and implement an order execution policy which must include, in respect of each class of instruments, information on the different centres where executes the orders of the customers and the factors that influence the choice of the centre for execution.
4. The entities mentioned in the first section must provide appropriate information to their clients on their order execution policy applicable, unless an indication to the contrary, and must be able to prove them, when requested, that they have executed their orders in accordance with the above policy.
When the order execution policy foresee the possibility that customer orders may be executed outside a regulated market or a multilateral trading system, the institution should inform customers of this possibility before you run the command on the fringes of the markets and of the systems mentioned above.
5. The entities mentioned in the first section should monitor the effectiveness of their systems and their order execution policy in order to detect and, if necessary, correct any deficiency. In particular, you should check periodically if the execution centers included in the policy to provide the best possible results for the client or if you need to change the execution systems. The entities are required to provide customers the information related to any major change in the system or in the order execution policy.
6. In the records of the orders of the customers have to keep: a) the original copy of the signed order by the customer or by the person authorized reliably when it is made in writing;
b) on magnetic support of recording, when the order is carried out by telephone; and c the corresponding magnetic record), in the case of electronic transmission.
7. The entities mentioned in the first section should establish the necessary means for the identification of their ordering, must have the media for the recording of the orders and must be stated in the contracts that telephone orders will be recorded.
Article 38 operational entities Reporting in the financial system that maintain directly financial instruments or client funds, must be put at the disposal of its clients, on a yearly basis and with lasting support, a report that will detail the State of the accounts with the breakdown of the balances, the composition and the economic valuation of all the deposits of securities and cash accounts of customers , as well as a detail of the operations of financial instruments or funds made in the period, unless you have provided this information to fingers in another periodic report.
The fourth chapter. On the use of privileged information and market manipulation Section first. On the abuse of Article 39 market scope of application 1. The prohibitions and obligations established in the present chapter are applied, with the exception of provisions contrary to the actions carried out: a) in Andorra or abroad that refer to financial instruments admitted to trading on a regulated market in Andorra or that operate in Andorra, or for which you have taken a demand for admission to trading on such a market;
b) in Andorra that refer to financial instruments admitted to trading on a regulated market overseas or for which a request for admission to trading has been presented in front of this regulated market.
2. This chapter does not apply to the operations related to monetary policy, or for the management of public debt.
Article 40 the beginning When an entity operating the financial system provides investment services and/or ancillary services to clients, you must comply with the provisions contained in the following articles of this chapter, respecting the following principles: a) to guarantee the integrity of the securities markets by: diligent and careful action) and of the institution, as well as senior management , its staff and its agents, and their clients or people who act in the name of these;
II) the facilitation of the control of the competent authorities for the supervision of regulated markets and other trading systems in which they operate the operational entities of the financial system; and b) to increase the confidence of investors in the financial markets through the respect of higher levels of transparency in the operation carried out in fingers markets.
Article 41 prohibition of use of inside information 1. Anyone of the cited in section 2 below, which owns Insider can't use this information by purchasing or giving, or attempting to acquire or give up, on their own or of third parties, directly or indirectly, financial instruments to which that information relates.
2. This prohibition applies to any natural or legal person who is in possession of this information: a) for their membership of the governing bodies, management or control of the sender;
b) for their participation in the share capital of the issuer;
c) to have access to this information because of the exercise of their work, their profession or functions;
d) due to their criminal activities. or
e) you know or would have had to know that it is inside information, including those closely related to a person exercising a management post in an issuer of financial instruments.
3. When the people referred to in paragraph 2 above are legal persons, the prohibition expressed in this section also applies to individuals who had participated in the decision to proceed with the operation on behalf of the legal person in question.
4. This article does not apply to transactions carried out in fulfillment of an obligation, since expired, to acquire or give financial instruments, when this obligation is contained in an agreement concluded before the person concerned is in possession of privileged information.
5. At the same time, the people mentioned in the previous sections may not: to) disclose information to any person, unless it is in the normal exercise of his employment, profession or duties, or b) recommend any other person purchase or give, or induce them to do so, based on insider information, financial instruments to which that information relates.
Article 42 prohibition of market manipulation 1. Any natural or legal person may carry out market manipulation practices.
2. market manipulation practices is understood to mean: a) the execution of transactions or orders and to customers: and) that provide or may provide false or misleading indications as to the supply, demand or price of financial instruments, or ii) to ensure, by means of a person or several persons acting in concerted manner, the price of one or several financial instruments at an abnormal or artificial level, ,-unless the person who had carried out the transactions or issued the orders to carry out these operations demonstrate the legitimacy of its reasons and that these conform to accepted market practices on the regulated trading in question;
b) transactions or orders to perform operations that use fictitious devices or any other form of deceit or machination;
c) dissemination of information through the media, including the internet, or through any other means, to provide or may provide false or misleading indications as to financial instruments, including the spread of rumours and false or misleading news, where the person that reported the information to know that it had been or know to be false or misleading. With regard to the journalists who act to professional qualification, this information disclosure is assessed taking into account the rules governing their profession, unless these people obtain directly or indirectly, an advantage or a benefit of this dissemination of information.
Article 43 Financial Instruments susceptible of abuse of market 1. It is considered susceptible to market abuse any financial instrument admitted to trading on a regulated market or for which you have completed an application for admission to trading on a regulated market, regardless of whether the operation has taken place in said market or not.
2. The requirements set forth in article 41 in conjunction with the prohibition of use of inside information are also applicable to all financial instruments not admitted to trading on a regulated market and the value of which depends on an instrument mentioned in the previous paragraph.
3. Also considered susceptible to market abuse any financial instrument admitted to trading on a multilateral trading system or for which you have completed an application for admission to trading in said system, regardless of whether the operation has taken place in said market or not.
4. The requirements set forth in article 41 in conjunction with the prohibition of use of inside information are also applicable to all financial instruments not admitted to trading on a multilateral trading system and the value of which depends on an instrument mentioned in the previous paragraph.
Article 44 competent authority 1. The INAF is the administrative authority competent to ensure the application of the provisions set out in this chapter, without prejudice to the powers of the judicial authorities. Thus, among others, the INAF exercise disciplinary power over the subject offenders defined in article 49. For this purpose you must start, instruct and solve the sanctioning relating to infringements on the operations of market abuse and determine the corresponding sanctions.
2. INAF can carry out all the actions necessary in the exercise of its functions in the area of market abuse.
In this context, will enable the INAF by: a) access to any document, regardless of its form, and receive a copy.
b) require information from any person, even to those involved on in the transmission of orders or in the execution of the operations in question, as well as its ordering and, if necessary, to quote and statement to any person;
c) on-site inspections to entities subject to its supervision in accordance with the legislation in force;
d) require submission of the existing records on data traffic and telephone data;
e) require the cessation of a practice that is contrary to the provisions of application of this chapter;
f) suspend trading of the financial instruments in question;
g) block prevention active for a maximum of 5 working days and, if appropriate, request the seizure of fingers active in the judicial authority. In any case, the INAF has no responsibilities for damages caused by the blocking of assets carried out in the exercise of their functions;
h) require the temporary prohibition to exercise a professional activity in the financial sector to people subject to their supervision.
3. This article applies without prejudice to the legal provisions in force in the field of confidentiality in the workplace and professional secrecy.
4. In the case of existing evidence of violations constitute a crime, the INAF relayed the proceedings to the public prosecutor. The actions referred to in this article do not constitute any prejudice or exclusion of the guarantees established by the Andorran criminal procedure.
Article 45 Obligations to the people who produce or disseminate investment recommendations
The people who produce or disseminate investment recommendations in Andorra in the exercise of their work in accordance with the legislation in force, of their profession or their duties, they have to ensure, with reasonable care, so that the information aimed at distribution channels or to the public is presented fairly and include your interests or conflicts of interest on the financial instruments to which that information relates.
Article 46 additional Obligations in connection with the abuse of market 1. The operational entities of the financial system that enjoy the status of issuers of securities, are in the process of applying for admission to the contribution of own titles and/or are in the process of public issue of negotiable securities in any regulated market or trading system organized, they should ensure a diligent management of the insider information that directly affects and ensure their confidentiality at all times. In this sense, they should have a list of people who work for them, by virtue of a contract of employment or otherwise, and who have access to privileged information. The CAs must periodically update this list and have to remit to the INAF whenever it is required.
2. market operators must ensure that the following non-exhaustive signals, which by themselves cannot be considered constitute market manipulation, are taken into account when transactions or orders of negotiation are examined: a) to what extent the trading orders given or transactions account for a significant proportion of the daily volume of transactions in the relevant financial instrument on the regulated market corresponding in particular, when these activities produce a significant change in the price of the financial instrument;
b) to what extent the operations carried out by people with a significant buying or selling position in a financial instrument produced significant changes in the price of the financial instrument or related derivative or underlying asset admitted to trading on a regulated market;
c) if trading orders given or transactions do not produce any change in the effective beneficiary of a financial instrument admitted to trading on a regulated market;
d) to what extent the trading orders given or transactions include revocation of position in a short period of time and represent a significant proportion of the daily volume of transactions in the relevant financial instrument on the regulated market, as might be associated with significant changes in the price of a financial instrument admitted to trading on a regulated market;
e) to what extent the trading orders given or transactions undertaken are concentrated in a short period of time in the session of the market and produce a change of prices is reversed later.
f) to what extent the trading orders given change the representation of the best bid or demand prices in a financial instrument admitted to trading on a regulated market or, more generally, the representation of the volume of commands available for operators of the market, and are removed before they are executed;
g) to what extent will give trading orders or perform operations in a particular moment, or around this, which calculated reference prices, settlement prices and valuations, and changes that have impact on these prices and evaluations;
3. The INAF, in the exercise of its supervisory functions relating to the examination of trading orders and operations carried out by operators of the market, will also have to take into consideration the signs detailed in the previous section.
Article 47 Obligations of suspicious operations to the INAF 1. The operative bodies of the Andorran financial system must notify the INAF, in the shortest possible period of time, when they have reasonable suspicion that an operation may constitute market abuse. For this purpose, each entity must designate the persons responsible for carrying out these papers and report the INAF.
2. The entities referred to in the previous section decide, based on a case by case basis, if an operation can reasonably be suspected of constituting market abuse. To this end, they must take into account the elements that define the use of privileged information and market manipulation established in articles 2, 41 and 42.
3. The entities subject to the obligation set out in this article, they have to deliver to the INAF the following information: a) description of the operations, and in particular, the type of order and the means of negotiation used;
b) the reasons that justify the suspicion that the operations may be constitutive of market abuse;
c) the means of identification of the persons on behalf of whom the transactions have been carried out and of the other persons involved in these operations; and any other relevant information) relating to the suspicious operation.
4. When the required data in the previous point are not available in the communication, this must contain, as a minimum, the reasons why the people who delivered the information suspect that the operations may be constitutive of market abuse. The additional information must be reported to the INAF as soon as possible.
5. The communication to the INAF may be made by letter, email, fax or phone call. In the latter case, if required by the INAF, subsequently required a written confirmation of the suspicion.
6. When the communication refers to operations relating to a financial instrument admitted to trading on one or more regulated markets abroad or make reference to a demand for admission to trading on such markets, the INAF transmitted immediately the information delivered to the competent authorities of the respective regulated markets.
7. With the exception of existing legal provisions against, in no case can inform you of the existence of the communication of suspicious operations to the INAF to any person, including persons on behalf of whom the transactions have been carried out and the parties related to such people. The respect of this obligation does not expose the person who made the communication nor the entity to any responsibility of any kind as long as such person acting in good faith.
8. The INAF maintains the confidentiality of the identity of the people who check suspicious operations communications if, by revealing it, harms or may harm these people.
9. The communication to the INAF suspicious operations does not imply or constitute a breach of secrecy in the work environment or professional secret, or a breach of any restriction on disclosure of information required in virtue of a contract or of a regulatory or administrative, legislative and does not involve any kind of legal liability to the person who has carried out.
Article 48 international cooperation in the field of fight against market abuse 1. The INAF collaborates with foreign authorities competent in the area of market abuse when this collaboration is necessary for the achievement of their respective functions, in application of the powers that are conferred by the legislation. The INAF attends other foreign competent authorities in the area of market abuse by exchanging information and cooperating in the framework of investigations.
2. each request for information or assistance received by the INAF in respect of market abuse is the subject of an analysis to determine whether this request given compliance with the requirements established in this article. In the event that the INAF considers that the request of another competent authority in the area of market abuse provides compliance with these requirements, communicate, in the shortest period of time possible, to this authority the information required in order to comply with the provisions set out in the previous section and immediately adopts the measures it considers appropriate to collect the information requested. If the RECORDING is not in a position to be able to deliver in the shortest period of time possible the information requested, it shall inform the applicant authority and specify the reasons.
3. The exchange of information or assistance in the area of market abuse on the part of the INAF are subject to the following conditions: a) the information exchanged must be necessary for the attainment of the functions of the competent authority that receives;
b) exchanged information are subject to secrecy in the work environment and/or professional secrecy of the competent authority that receives and the secret in the work environment and the professional secrecy of such authority must offer guarantees at least equivalent to those conferred by the secret in the work environment and by the professional secrecy to which it is subjected the INAF;
c) the information provided by the INAF can only be used on the part of the competent authority that receives for the purpose for which this information has been communicated and the competent authorities must be able to guarantee that no other use will be made.
The request for information or assistance made by a competent authority of another State may be rejected by the INAF in the following cases: a) when said exchange of information or assistance can lead to prejudice the sovereignty, security or public order of Andorra;
b) when it has commenced a judicial procedure on the basis of the same facts and the same people in front of the Andorran courts;
c) when it has been won a final court decision on the same facts and the same people in front of the Andorran courts; or d) when the request comes from a competent authority in the field of abuse of market of a country that does not grant the same right to information in the INAF.
In the cases mentioned in sections b and c)) immediately prior, the INAF notifies the competent authority the complainant more detailed information as possible about the procedure or court in question.
4. Without prejudice to the provisions provided for by law, the INAF can only use information received in the framework of the provisions of paragraph (1) in the exercise of its functions related to this chapter and in relation to the administrative procedures or related court specifically with the exercise of these functions.
5. When the INAF is informed, by a competent authority in the field of abuse of foreign market, that acts that violate foreign laws in the area of market abuse have been made in Andorra, or acts done abroad affecting financial instruments traded on regulated markets authorised to Andorra, the INAF adopts appropriate measures. At the same time, communicates the results of its intervention to the competent authority that has informed and, as far as possible, the reports of significant progress achieved.
6. The INAF can ask a foreign competent authority in matters of market abuse that make an investigation in their territory in this matter. Likewise, you can ask that personnel of the INAF accompany such authority in this research.
7. When a foreign authority competent in the area of market abuse request to the INAF, which carried out an investigation in Andorra, the INAF gives their consent as long as it does not occur in any of the events listed later in this section. Likewise, the INAF can allow its staff are accompanied by agents of the applicant authority, if this has been established in a bilateral or multilateral agreement for this purpose. However, the research is entirely under the control of the INAF.
The INAF can refuse to carry out an investigation at the request of a foreign authority in the area of market abuse or deny participation in the investigation of agents of said authority: a) If this demand can lead to prejudice to the sovereignty or security and/or to the public order of Andorra;
b) when it has commenced a judicial procedure on the basis of the same facts and the same people in front of the Andorran courts;
c) when it has been won a final court decision on the same facts and the same people in front of the Andorran courts;
d) when the demand comes from a competent authority in the field of abuse of market of a country that does not grant the same right to information in the INAF; or e) when the demand comes from a competent authority in the area of market abuse in a country the secret in the workplace and professional secrecy does not offer guarantees at least equivalent to those conferred by the secret in the work environment and by the professional secrecy to which it is subjected the INAF.
In the cases mentioned in the letters b) and c) of section 7, the INAF notifies the competent authority the complainant more detailed information as possible about the procedure or court in question.
Second section. Sanctions in connection with the abuse of market
Article 49 Subject violators Are subject violators to the natural or legal persons who perform actions or omissions classified as offences in the following article.
Article 50 Offences 1. Constitutes a very serious infringement, the Commission of more than three serious violations within a year.
2. Constitutes a serious violation: a) the breach of the obligations or prohibitions laid down in this chapter in connection with the use of privileged information and market manipulation, when the volume of resources or of securities or financial instruments used in the Commission of the offence is relevant and the offender has had knowledge of the information to its status as a person in the exercise of an Office Manager in a sender , or in the exercise of their profession, their work or their functions in an operational entity of the financial system;
b) refusal to provide information to the INAF by any person in the exercise of an Office Manager in a sender, or in the exercise of their profession, their work or their functions in an operational entity of the financial system, in relation to the obligations or prohibitions set out in the present chapter on the use of privileged information and market manipulation , or the lack of accuracy in the information provided, which will hinder the exercise of the functions of supervision and investigation attributed to the INAF;
c) the Commission of over three minor offences within a year.
3. Constitute minor offences: a) the breaches of obligations or prohibitions laid down in this chapter for any person in the exercise of an Office Manager in a sender, or in the exercise of their profession, their work or their functions in an operational entity of the financial system in relation to the use of privileged information and market manipulation that do not constitute a serious violation;
b) the lack of accuracy in the information provided to the INAF or hindrance of the exercise of the functions of supervision and investigation attributed to the INAF by different people in the listed in the letter b) of paragraph 2 above, in relation to the obligations or prohibitions set out in the present chapter on the use of privileged information and market manipulation.
Article 51 procedure for sanctioning The sanctioning procedure will be processed in accordance with the provisions of chapter III of the law regulating the disciplinary regime of the financial system, of 27 November 1997.
Article 52 Penalties 1. The sanctions that result from each procedure are set in accordance with the qualification of the offences.
2. very serious offences will be penalize with: a) when the violation has been committed by an operational entity of the financial system or to a person in the exercise of its senior management positions, in law or in fact, in this entity: the entity for administrative penalty) and 150,001 up to 300,000 euros ii) temporary or definitive suspension in the exercise of the responsibilities of senior management of law or of fact, and/or administrative sanction of 37,501 up to 75,000 euros to each of those who, because of exercising senior management positions, in law or in fact, in this body, are responsible for the violation, when this is attributable to their fraudulent conduct or negligent iii) temporary restriction of the provision of investment services that have been at the origin of the breach for a maximum period of five years;
b) when the violation has been committed by a sender or to a person in the exercise of an Office Manager in a sender: and the issuer of administrative sanction) 150,001 up to 300,000 euros ii) administrative sanction of 37,501 up to 75,000 euros to each of those in an Office Manager in a sender, are responsible for the violation, when this is attributable to the negligent or fraudulent conduct;
c) when the violation has been committed by persons different from those listed in the letters a) and b) of paragraph 2 above, administrative sanction from 15,001 to 25,000 euros.
3. serious infringements will be penalize with: a) when the violation has been committed by an operational entity of the financial system or to a person in the exercise of its senior management positions, in law or in fact, in this entity: the entity for administrative penalty) and 30,001 up to 150,000 euros ii) temporary suspension in the positions of senior management, in law or in fact , and/or administrative sanction 7,501 up to 37,500 euros to each of those who, because of exercising senior management positions, in law or in fact, in this body, are responsible for the violation, when this is attributable to their fraudulent conduct or negligent iii) temporary restriction of the provision of investment services that have been at the origin of the breach for a maximum period of two years;
b) when the violation has been committed by a sender or to a person in the exercise of an Office Manager in a sender: and the administrative sanction 30,001 entity) up to 150,000 euros ii) administrative sanction 7,501 up to 37,500 euros to each of those in an Office Manager in a sender, are responsible for the violation, when this is attributable to the negligent or fraudulent conduct;
c) when the violation has been committed by persons different from those listed in the letters a) and b) of paragraph 3 above, administrative sanction 5,001 up to 15,000 euros.
4. minor offences will be penalize with: a) when the violation has been committed by an operational entity of the financial system or to a person in the exercise of its senior management positions, in law or in fact, in this entity: the entity for administrative penalty) and 3,000 to 30,000 euro ii) administrative sanction 150 up to 7,500 euros to each of those who , by the fact of exercising senior management positions, in law or in fact, in this body, are responsible for the violation, when this is attributable to the negligent or fraudulent conduct;
b) when the violation has been committed by a sender or to a person in the exercise of an Office Manager in a sender: and the administrative sanction institution) 3,000 to 30,000 euro ii) administrative sanction 150 up to 7,500 euros to each of those in an Office Manager in a sender, are responsible for the violation, when this is attributable to the negligent or fraudulent conduct;
c) when the violation has been committed by persons different from those listed in the letters a) and b) of section 4 above, administrative penalty of 100 up to 5,000 euros.
5. When the profit obtained as a result of the acts or omissions on which the violation is ponderable consist, the upper limit of the administrative sanctions provided for and points) of letters a) and b) of paragraphs 2, 3 and 4 above, is extended twice referred to profit, if this figure is higher than that limit.
6. In application of paragraphs 2, 3 and 4 above, the sanctions of the various sections of each point can be imposed cumulatively.
Article 53 graduation Criteria of sanctions the criteria for graduation for the sanctions that have been imposed on the persons or entities who have committed any breach of the obligations or prohibitions laid down in this chapter in connection with the use of privileged information and market manipulation are set forth in article 19 of the law regulating the disciplinary regime of the financial system , of 27 November 1997.
Article 54 complementary norms of the system of sanctions with regard to the regime of prescription of infringements related to the use of privileged information and market manipulation, as well as to the procedures associated with the payment of the amount of the penalties associated with and in the registration and advertising of these sanctions, is of application established in chapter VI of the law regulating the disciplinary regime of the financial system , of 27 November 1997.
Chapter five. Contractual netting agreements and collateral agreements Article 55 financial scope of application 1. The rules of this chapter apply to the financial operations carried out in the framework of an agreement of contractual compensation granted in accordance with the requirements set forth in sections 2 and 3; as well as the financial guarantee agreements and the financial guarantees linked to fingers and defined in the present chapter, granted in accordance with the requirements set forth in sections 2 and 3.
2. The two parts of a contractual compensation agreement and both the beneficiary and the guarantor, in the case of financial guarantee agreements or financial guarantees, should be included in one of the following categories: a) a public authority, including the public bodies responsible for public debt management or involved in this management and the public bodies authorised to keep accounts of customers;
b) the INAF, a central bank, the European Central Bank, the Bank of international payments, a multilateral development Bank, the International Monetary Fund and the European Investment Bank;
c) operational entity of the Andorran financial system, a body of collective investment, including venture capital and securitisation, a pension fund, an insurance company in Andorra, and in general, any entity with financial activity, now or in the future, be under the supervision of the INAF;
of a non-resident entity) authorized to carry out the activities reserved to the entities referred to in the letter c) previous to the Andorran legislation;
e) a central counterparty, a settlement agent or a clearing house, including the equivalent entities that act in a market of futures, options and derivatives; or f) a person other than a natural person, including the collective entities without legal form, as long as the other partner is an institution of the defined in the previous sections.
3. The existence of the agreement has to prove in writing or in a legally equivalent, without that you can require no other formality for its establishment, validity, effectiveness against third parties, enforceability or admissibility as evidence. The registry or the annotation by electronic means or on any other durable is considered legally equivalent to the way perseverance in writing.
Article 56 contractual compensation agreements 1. For the purpose of this chapter is understood to agree that contractual compensation agreement that establishes the creation of a single legal obligation covering all financial transactions included in the same agreement and, by virtue of which, in the case of expiration in advance, the parties only have the right to require the net balance of the proceeds of the liquidation of these financial operations. The fact that there is only one current operation under the agreement in a certain time not deprived of effect the provisions of this chapter. The net balance has been calculated as established in the agreement of compensation or contractual agreements they have with respect to this agreement, including the agreements that link different contractual compensation agreements.
2. For the purposes of this chapter are deemed to be "financial operations" carried out in the framework of a contractual compensation agreement as follows: a) carried out on financial instruments in the wider interpretation of the term and, at least, are defined in article 2;
b) double operations simultaneously, or repurchase agreement and, in general, temporary assignments of assets. Are considered to be simultaneous or double operations in which they hire simultaneously two agreements to the contrary, of similar characteristics and values of the same nominal amount, but with different date of execution, can be both in cash with different settlement dates, a term, or in cash and the other to term; operations with repurchase agreement are considered to be those in which the holder of the securities are sold up to the date of repayment, becoming simultaneously with the buyer the repurchase of identical characteristics and values to equal nominal value, to a particular date or between the sale and the nearest repayment, is this voluntary or part;
c) securities lending; and/or financial guarantee agreements) regulated in this chapter.
Article 57 and financial guarantees financial guarantee agreements 1. The financial guarantees may constitute by an agreement of financial guarantee with change of ownership or a financial guarantee agreement, fixed income securities regardless of whether or not these agreements are covered by a "framework agreement" or "terms and conditions": a) a financial guarantee agreement with change of ownership is that agreement by virtue of which a guarantor transfers the full ownership of the assets on which is made up of the financial guarantee or the full rights to the same to beneficiary, for the purpose of ensuring or another type of coverage to the major financial obligations. Are included in this concept double operations simultaneously, or repurchase agreement and, in general, temporary assignments of assets;
b financial guarantee agreement) fixed income securities is that agreement under which the guarantor pays or provides a financial guarantee in the form of pignoratici title to a beneficiary or in favor of this, preserving the guarantor the full or qualified ownership of the asset on which is made up of the financial guarantee, or full rights over the same at the moment of establishing the right on the guarantee.
2. The financial guarantee that contribute must consist in any of the following assets: in) cash, understanding as such the money paid on account in any currency, or similar law, the return of money as may be conferred by the money market deposits;
b) financial instruments in the wider interpretation of the term and, as a minimum, according to the provisions of article 2, and all direct or indirect right about those;
c) credit rights, understanding as such the monetary rights deriving from an agreement by virtue of which an operational entity of the Andorran financial system or alien gives a credit in the form of a loan to the debtor is included in one of the categories listed in paragraph 2 of article 55.
3. financial obligations are understood to be leading the obligations guaranteed by a financial guarantee agreement which gives right to a payment in cash or in the delivery of financial instruments.
The main financial obligations may consist wholly or partially: to present or future obligations), real, conditional or possible (including the obligations from a framework agreement or similar);
b) obligations of a person other than the guarantor in relation to the beneficiary of the guarantee; or c) obligations of a certain category or class that arise periodically.
4. The establishment of the financial guarantee required, in addition to their formalization through one of the agreements referred to in paragraph 1 of article 57, the contribution of the assets object of the guarantee and the proof of this contribution in writing or in a legally equivalent. For this purpose: a) it is understood that a financial guarantee has been validly provided when the assets object of the financial guarantee has been delivered, transmitted, maintained, registered or certified in any other way, so that open in power or is under the control of the beneficiary or the person acting on your behalf. In the case of the values represented by account entries , it is understood that the financial guarantee has been made up and donation from the registration of the new owner or the guaranteed fixed income securities in the corresponding accounting records. The rights of substitution or removal of the surplus of financial collateral in favour of the guarantor or, in the case of credit rights, the rights of perception of the product of these credit rights, until further notice, will be understood to be without prejudice to the financial collateral has been provided to the beneficiary in accordance with the provisions of this chapter;
b) test or proof of the provision of a financial guarantee must allow the identification of the assets to which it refers. For this reason, it is sufficient to prove that the financial guarantee represented by annotation in the stock account, has been paid or is a credit in the main account to which it refers in paragraph 1 of article 63 and the financial guarantee provided in cash, has been paid or is a credit in the account designated for this purpose;
c) with regard to the rights of credit, its inclusion in a list of credits presented to the beneficiary of the financial guarantee, in writing or in a legally equivalent, is enough to identify the right to credit and to demonstrate the contribution of this credit as financial collateral between the parties and against the debtor or the third parties.
However, the guarantor may not provide a right of credit as a financial guarantee without having previously notified to the debtor, who can validly waive, in writing or by any other means legally equivalent to: i) their rights of compensation deal with the creditor and deal with the people for whom this has given, pignorat or mobilized otherwise the right to financial guarantee credit; and ii) of the rights in accordance with the rules on privacy and that, otherwise, would prevent the creditor of the credit law to provide information about this last or on the debtor or restringirien its ability to do so, in order to use the right of credit as a financial guarantee.
The debtor to pay before being notified of the contribution credit law in financial guarantee, is released;
of) the Constitution of financial guarantees for the benefit of the entities set out in the letter e) of paragraph 2 of article 55 can be carried out by a unilateral manifestation of who appears as the owner of the assets object of the financial guarantee in the accounting records, in the way that determine its rules of regulation and discipline, and that these rules may be the need to make a formal act that under the Constitution , or the effectiveness of the financial guarantee.
5. The beneficiary and the guarantor can agree in writing that the guarantor can contribute a financial guarantee equivalent to replace or Exchange the financial guarantee provided. It is considered a guarantee equivalent: a) in the case of cash, the payment of an amount identical and in the same currency;
b) in the case of financial instruments, other financial instruments of the same issuer or debtor that are part of the same issue or class and of the same nominal amount, currency and description or, where a financial guarantee agreement allows for the transfer of other assets to be a fact that affects the financial instruments that make up the financial guarantee, these other assets.
Article 58 additional financial Guarantees within the framework of the financial guarantee agreements the parties to an agreement of financial guarantee may agree on the contribution of additional guarantees. As well, they may agree that, in case of variations in the price of the object of the guarantee or the amount of the main financial obligations initially agreed, has been to restore the balance between the value of the secured obligation and the value of the guarantees provided to make sure the well providing new financial instruments or cash, or in your case, return them proceeding this way in the repayment of the surplus of the guarantee provided. These financial instruments or cash will be considered an integral part of the financial guarantee and must be treated as if they had been submitted simultaneously to the contribution of the initial object of the financial guarantee.
Article 59
Effects of the replacement, of the premium or the withdrawal of financial guarantees the replacement, the add-on or the withdrawal does not incur the extintiva ecosystems of the financial guarantee agreement, which will keep its original Constitution date (which will apply also to the replacement guarantee and/or additional).
Article 60 the right of use of financial collateral covered by a financial guarantee agreement fixed income securities 1. The beneficiary of the financial guarantee may exercise a right of use in relation to a financial guarantee provided on the merits of a financial guarantee agreement fixed income securities when the clauses of this agreement envisaging, as well, in this case, you can make use and dispose as owner of the assets object of the financial guarantee provided for in said agreement.
2. When a beneficiary exercises its right of use, enters into the obligation to transfer an asset equivalent to replace the assets that constituted the initial object of the financial guarantee, at the latest, on the date of fulfilment of the main financial obligations covered by the agreement of fixed income securities financial guarantee.
It is also possible that the beneficiary, the date scheduled for the fulfillment of the main financial obligations, transfer an asset or equivalent, to the extent that the terms of a financial guarantee agreement established so fixed income securities, compensate the value of the guarantee equivalent or use it to meet the financial obligations of its counterpart.
3. The equivalent collateral to be transferred to comply with an obligation such as that described in the first paragraph of paragraph (2) above is subject to the same financial guarantee agreement fixed income securities that the initial financial guarantee and is treated as if it had been provided under the financial collateral agreement simultaneously fixed income securities in the first provision of the initial financial guarantee.
4. This article does not apply to credit rights.
Article 61 a financial guarantee agreement 1. It is considered as a case of execution, a breach of obligations or any fact agreed between the parties that, in the event of a malfunction: a) allows the beneficiary of the financial guarantee, on the merits of the financial guarantee agreement or the law, to perform or to hijack the assets object of such financial guarantee; or b) involves the application of a clause of payment for compensation required in advance if this clause were provided for in the agreement of financial guarantee.
By clause required compensation for payment in advance is meant the whole clause of a financial collateral arrangement, or of an arrangement of which a financial collateral arrangement forms part, or, in the case that there is no such provision, any statutory rule by which, in the event of a case of execution: a) the expiration of the obligations of the parties is advanced , so that they are immediately executable and are expressed as an obligation to pay an amount that represents the calculation of its current value, or cancel such obligations and will substitute for the obligation of payment of an amount identical; and/or b) will take into account what each part due to the other with respect to such obligations and the part of the debt which is more than you will pay to the other party a net sum equal to the balance of the global account.
2. When a case of execution of a financial collateral provided under a financial collateral agreement fixed income securities, the beneficiary will be able to run it, under the conditions provided for in the agreement, as follows: a) in the case of financial instruments by sale or appropriation and by means of the compensation or the application of its value to the fulfillment of the main financial obligations;
b) if it is effective, by the offset of the amount or using it to run the main financial obligations;
c) in the case of credit rights, by sale or appropriation and by means of the compensation or the application of its value to the fulfillment of the main financial obligations.
3. The appropriation referred to in paragraph 2 will only be possible when: a) has been agreed to between the parties to the financial collateral agreement; and b) the parties have agreed to the financial guarantee agreement the modalities fixed income securities valuation of financial instruments and credit rights.
4. The means to run the financial guarantee mentioned in paragraph 2 is not all serve, without prejudice to the conditions agreed at the financial guarantee agreement, fixed income securities in any of the following requirements: a) that has been previously notified of the intention to proceed with the execution;
b) that the clauses relating to the execution are approved by a court, a public official or another person;
c) that the execution is made by public auction or in any other prescribed manner; or d) that you have completed all additional term.
5. In the event of use of the assets object of the guarantee regulated in article 60, when a case of execution while awaiting an obligation to provide the equivalent assets, this obligation may be extinguished by its inclusion in a clause of payment for compensation required in advance.
6. The performance or the assessment of the financial collateral and the calculation of the main financial obligations will have to be made at market value, calculated from reasonable and objective way.
Article 62 non-application of certain provisions in the field of insolvency 1. The fact that one or both parties of a financial guarantee agreement have ceased payments, or are part of a bankruptcy procedure, judicial settlement of payment, of administration or intervention may not be cause to declare or terminate an agreement of financial guarantee or the provision of a financial guarantee in the merits of said agreement: a) when the start of one of the procedures described in this section is subsequent to the completion of the agreement or to the contribution of the guarantee;
b) when the beginning or opening of one of the procedures described in this section occur the same day but before it has been formalised an agreement of financial guarantee or financial guarantee has been provided, the guarantee will be legally enforceable and binding with third parties provided that the beneficiary can prove that he had no knowledge or should have it, the opening of this procedure or the adoption of those measures.
2. The opening of one of the procedures described in paragraph 1 will not be cause to cancel or terminate the provision of a financial guarantee, a guarantee additional financial or financial guarantee equivalent, provided that: a) the contribution of such guarantee has been made on the day of opening of one of the procedures described in paragraph 1, but prior to the resolution that has motivated the opening of this procedure or the adoption of such measures , or has been carried out in a certain period of time, prior to the opening of this procedure or to the adoption of such measures, and defined by reference to such openness and adoption, or depending on the adoption of the resolution of the measurements or other events in the course of such proceedings or measures; and/or b) the primary financial obligation has entered into on the date prior to the provision of the financial collateral, additional warranty or the equivalent.
3. For the purposes of this chapter, is meant for beginning or opening of one of the procedures described in paragraph 1, the Court ruling that declared the cessation of payments and the corresponding procedure of judicial settlement or bankruptcy.
4. financial collateral arrangements are not limited, restricted or affected in any way by the fact that one or both parties to an agreement have ceased payments, or are part of a bankruptcy procedure, judicial settlement of administrative intervention or liquidation, and can run, immediately, separately, in accordance with the agreements between the parties and the provisions of this article.
5. The execution of the payment clause for compensation required in advance and, therefore, the Declaration of early maturity, resolution, termination, execution or equivalent effect in financial operations defined in this chapter carried out within the framework of a contractual compensation agreement, including the financial guarantee agreements, or in relation to the same agreements, may not be restricted, limited or affected in any way by the fact that one or both parties have ceased payments , have applied for or are part of a bankruptcy procedure, judicial settlement of administrative liquidation, or intervention. Clause of payment for compensation required in advance can not supeditar to any of the requirements provided for in paragraph 4 of article 61.
In the event that one of the parties to the agreement a contractual compensation, including financial guarantee agreements, is in one of the circumstances set out in the previous paragraph, you should include as a credit or debt of the immersed in these situations, only the net amount of the financial transactions included in the agreement, calculated in accordance with the rules laid down in the same agreement or those agreements that have a relationship.
6. Financial operations carried out in the framework of a contractual compensation agreement, including the financial guarantee agreements, or agreements that have a relationship, may not be appealed or cancelled under the provisions of articles 26 to 31 of the Decree of suspension of payments and bankruptcy, of 4 October 1969, except if it proves fraud in the moment in which they were contracted.
Article 63 the conflict of rules 1. Any question relating to any of the items listed in the following paragraph (2) in relation to a financial guarantee of fixed income securities account entries, that is, of a financial guarantee that is made up of financial instruments, the ownership of which is entitled to entries in a register or account maintained by a broker or on its behalf, shall be governed by the legislation of the country in which you are the primary account. Main account is one in which you make annotations for which is provided to the beneficiary financial guarantee of fixed income securities saying account entries. The reference to the legislation of a country is a reference to their national legislation and dismisses any rule under which, in deciding the relevant question, he would have to make reference to the legislation of another country.
2. The issues referred to in paragraph 1 are: a) the legal nature and effects on the property of the financial guarantee of fixed income securities account entries;
b) the requirements for perfecting a financial collateral arrangement relating to a financial guarantee of fixed income securities account entries and the contribution of the financial guarantee of fixed income securities account entries in the merits of this agreement and, more generally, compliance with the requirements necessary to make the agreement and the mentioned third parties effects arise;
c) if the title or right of the beneficiary of a financial guarantee fixed income securities on assets represented by account entries is inferior or subordinate to other titles or rights this year, or if you have had an acquisition in good faith;
d) the steps required for the implementation of the financial guarantee of fixed income securities account entries after a course of execution.
The first, second and third additional provision of this law shall be subject to the sanctions laid down by the law regulating the disciplinary regime of the financial system of 27 November 1997.
Transitional provisions set out in the first and fifth chapters, established in the third and fourth sections of the second chapter and the provisions set out in the fourth chapter, with the exception of articles 46 and 47, are of immediate application to the date of entry into force of this law. The obligations set out in articles 46 and 47 of the fourth chapter are of application to three months of the entry into force of this law. Finally, the operational entities of the Andorran financial system should adapt to the provisions set out in the first and second section of the second chapter and in chapter third within a period of six months from the entry into force of this law, with the understanding that all the rules established in these provisions from the first and second chapters of title III of the law 14/2010 , 13 may, on the legal regime of the banking entities and basic administrative regime of the operating entities of the financial system, are still fully in force throughout this transitional period.
Repealing provision
Are repealed articles 1 to 7, 18 to 44 and 46 to 55 of the law 14/2010, of the 13 of may of the legal regime of the banking entities and basic administrative regime of the operating entities of the financial system; the Decree of 12 October of 2011, by which delegate to the Institut Nacional Andorrà de Finances the powers laid down in articles 22 to 42 of the law 14/2010, of the 13 of may of the legal regime of the banking entities and basic administrative regime of the operating entities of the financial system; the law regulating the Andorran financial system of 27 November 1993, as well as any provision of rank less than or equal to be opposed to what is established in this law.
First final provision the Government, at the proposal of the Ministry responsible for finance, in relation to article 18, relating to the annual accounts, you must set the specific accounting standards for operational entities of the financial system and should determine the subsidiary rules inherent in its application and its development. The Government can delegate this right to the INAF.
Second final provision will enable the INAF to establish the obligations of the INAF for self-employed operations of managers of the operational entities of the financial system with values of said entity.
Third final provision will enable the INAF to develop, via the issuance of technical releases, the provisions set out in this law, with the exception of those mentioned in the first final provision.
The fourth final provision introduces the following changes to the law 10/2008 of 12 June, regulating collective investment bodies of Andorran law: 1. Section 8 of the preliminary title is worded as follows: "8. regulated Market or regulated: a market regulated or regulated is: a) everything that appears on one of the lists relating to these markets of the Member States of the European Union as well as the rest of the stock trading markets and instruments authorised third countries financial and/or supervised by an authority to operate in accordance with international standards in the field of regulation and supervision of financial markets; or b) any market or multilateral trading system of securities or financial instruments that have regular functioning and that are subject to rules laid down by the competent authorities relating to the operation of the market and the conditions of access, for admission to trading, of transparency and of protection similar to those of the markets to which it refers in the above paragraph and it is considered as such by the INAF. "
2. article 37 is worded as follows: "Article 37.
External audit 1. The CROS are obliged to submit to audit their annual accounts. The CROS created during the last quarter of the year may request authorisation from the INAF to remain excluded from this obligation during the first year, as long as the INAF deems appropriate in accordance with its nature and its complexity, and of the risks to which it is exposed. In this case, they must submit to audit the accounting of this last quarter along with the corresponding accounting in the next exercise in the second year.
2. the CROS should have hired an auditor at any time an entity responsible for the external audit of its financial statements. This appointment has to be approved by the general meeting of shareholders of the CROS that is the form of society or of the management company of the CROS that is the form of funds, as required, responsible for the appointment of external auditors, on the basis of a proposal of the governing body of the CROS or the Board of Directors of the management company, as appropriate, and previous authorization of the INAF. In order to comply with the precepts established in this law, the appointment of auditors should ensure that an auditor is at all times responsible for the audit of the CROS.
3. The external auditor and/or the auditor must be independent of the CROS audited and did not participate in the decision making of the latter. In this sense, the auditor and/or the external auditor may not keep any financial, commercial, labour relationship or otherwise, either directly or indirectly, with the CROS audited, on the basis of which a third party objectively, reasonably and properly informed, to reach the conclusion that the independence is compromised. If the independence of the external auditor and the entity or auditor will see compromised by any factor, the external auditor and/or the Auditor are required to establish the necessary safeguards to reduce these factors and to avoid compromising their independence. In the event that the safeguards will not adequately reduce the factors that compromise their independence, the external auditor or the auditor will refrain from carrying out the audit.
4. The external auditors and the auditing should respect the ethical standards of the most demanding professionals. In this sense, the external auditors and the auditing should take into consideration the principles reflected in the code of ethics of the International Federation of Accountants (IFAC).
5. The auditor is appointed for an initial period up to 5 years, renewable, without under any circumstances overall calculation of this appointment may exceed 10 consecutive years. At the expiration of each appointment, the governing body of the CROS that is the form of society or the Board of Directors of the management company of the CROS that is the shape of the bottom, should carry out an evaluation process of its auditor to consider whether or not to renew it. This evaluation process should evaluate whether the auditor complied with their legal obligations, and regulatory professionals in the development of his mandate. The Committee of Directors of the CROS or the Board of Directors of the management company, as appropriate, must inform the INAF of the criteria used for this evaluation and its conclusion and, where appropriate, request the appropriate prior authorization and, subsequently, must inform the general meeting of shareholders and to propose the renewal or change of auditor. In any case, the auditor cannot be hired again until two years from the end of the last contract.
6. Hire a different Member of the same auditor entity, despite the fact that belongs to a subsidiary of another country, it is not considered compliance with that provided in the previous sections.
7. The resolution of the request for authorisation for the appointment of an auditor shall be governed by the provisions of article 46. In any case, the auditor of a CROS that revisit the form of investment funds should be the same as the auditor of the management company. In the case of the SICAV the auditor may be different from what has been appointed by the management company. The appointment of the auditor will have to sign up in the records of the INAF in a maximum period of 20 working days from the date on which the appointment occurs. The INAF has to resolve the request for registration within the period provided for in article 48.
8. The audit report must make mention of the validation of the assessment of the contributions to the CROS that have not been money.
9. In the case of companies and funds with compartments, the auditing of accounts should refer to each of the compartments and classes.
10. The direction and the signature of the work of audit may correspond to one or more members of the same organization auditor. The audit reports can not be signed with the logo of the organisation mentioned and is required the signature of the responsible partners who have been in charge of the field work carried out in the CROS audited. The reports may not be signed by other members of the same organization that have not participated in the work.
11. In the event that the external auditors should have knowledge of the existence of elements likely to significantly affect the stability of CROS, have issued a report immediately, and the CROS audited or its management company has the obligation to send a copy to the INAF. If within a period of five working days the auditor does not have reliable verification that there has been this shipment, you must send a copy of the report to the INAF. In the event of a change of auditors, the auditor who must comply with this requirement has the effect his appointment by the general meeting of shareholders.
12. The external auditor or auditors should provide the INAF, in addition to the complementary reports and information set out in the legislation and in the rules of instrumental techniques of the INAF, all the information requested by the INAF in relation to the audit work carried out by the auditor in a CROS.
13. The audit of the consolidated financial statements of CROS is to be done in accordance with the provisions of the international standards of Auditing issued by the International Auditing and Assurance Standards Board. The INAF is enabled to establish complementary norms to the mentioned in the previous point as long as it sees fit.
14. The audit entities and their employees or external auditors, in the context of his performances in CROS of Andorran law, are subject to the duty of confidentiality in the workplace and to professional secrecy. To this end, shall take all measures of prudence and caution are appropriate with a view to the safeguarding of this duty of confidentiality. The violation of the duty of confidentiality in the work environment and/or professional secrecy, unless legal cause of justification, it constitutes a crime in the terms envisaged in the criminal code.
15. the auditors or audit entities that violate the obligations derived from the sections above and/or that do not run the demands and requests of the INAF established supervision and control in the media relating to the disciplinary regime of the financial system, will be sanctioned with a penalty of 1,000 to 30,000 euros and professional disqualification in Andorra for a period not exceeding five years If the breach has been caused by negligence; or with a penalty of up to 30,001 150,000 euros and his ultimate professional disqualification in Andorra, whether the breach has been produced intentionally.
16. For the graduation of sanctions on entities or audit auditors, within the limits established in the preceding point, it has to take into account the gravity of the danger created and/or damages caused and the strong sanctions that have been imposed for the last five years. "
Fifth final provision this law shall enter into force the day after being published in the official bulletin of the Principality of Andorra.
Casa de la Vall, 9 may 2013 Vicenç Mateu Zamora Syndic General Us the co-princes the sancionem and promulguem and let's get the publication in the official bulletin of the Principality of Andorra.
Joan Enric Vives Sicília François Hollande Bishop of Urgell, President of the French Republic Co-prince of Andorra Co-prince of Andorra