Law 7/2013, On 9 May, On The Legal Regime Of The Operating Entities Of The Andorran Financial System And Other Provisions That Govern The Exercise Of The Financial Activities In The Principality Of Andorra

Original Language Title: Llei 7/2013, del 9 de maig, sobre el règim jurídic de les entitats operatives del sistema financer andorrà i altres disposicions que regulen l’exercici de les activitats financeres al Principat d’Andorra

Read the untranslated law here: https://www.bopa.ad/bopa/025026/Pagines/7F0FA.aspx

Law 7/2013, on 9 may, on the legal regime of the operating entities of the Andorran financial system and other provisions that govern the exercise of the financial activities in the Principality of Andorra since the General Council at its session of 9 may 2013 has approved the following: law 7/2013, on 9 may, on the legal regime of the operating entities of the Andorran financial system and other provisions that govern the exercise of the activities Finance in the Principality of Andorra preamble the legislation up to the date established in the legal system of the operating entities of the financial system in the following laws: the law 24/2008, the 30th of October, on the legal regime of the non-banking financial institutions-specialised credit, which establishes the legal regime of depositories;

the law 13/2010, 13 may, on the legal regime of the investment banks and management companies of collective investment institutions, which establishes the regulation of the legal status of these entities, differentiating the types of investment and financial institutions, investment services and auxiliary detailing that these can be made;

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, which establishes the legal regime of the banking entities in your articles numbers from 8 to 17.

In addition to the transposition of all the articles of the aforementioned laws and devices of law 14/2010, 13 may, in order to rewrite the regulation of the legal status of banks in a single legislative text has been stated the incorporation of the definition of banks that are not included in this Law but in the article 2 of the law on regulation of the operational of the different components of the financial system, of 19 December 1996.

Finally, with the object of power structure in a way more clear legislation of the Andorran financial system, it was considered appropriate to repeal the law regulating the powers of the various operational components of the financial system, of 19 December 1996, of which only remained in force some articles, in particular articles 1, 2, 3. c), 4, 6, 7, 8 and 9 , which have been said to present legislative text without significant modifications.

As well, the law incorporates in a single text the normative legal regimes of all operational entities of the Andorran financial system, concentrating all the regulations scattered in various laws, without that significant changes have been made in the regulations of the legal regime of the different types of operational entities of the financial system, and is, therefore, a recast and a restructuring of the laws in force in the field in order to provide more legal certainty in the legislative framework that regulates the financial system Andorra.

This law on the legal system of the operating entities of the Andorran financial system and other provisions that govern the exercise of the financial activities in the Principality of Andorra is divided into five chapters, fifty-nine articles, an additional provision, a repealing and seven final provisions.

The five chapters are the following:-First: General provisions-second: legal framework for banks-third: legal system of financial institutions investment-Fourth: legal system of the management companies of collective investment undertakings-Fifth: legal system of financial institutions-non-banking specialist credit.

The chapter on the General provisions contains seven articles: the article first defines the object of the law; the second article that establishes the definitions; the third, related to the composition of the Andorran financial system and the type of operational entities of the financial system; the fourth, on the entities that, despite having a social object of financial character, does not form part of the financial system; the fifth, related to the prohibition of providing banking or financial activity without prior administrative authorization; the sixth, on the initiative of the Government with regard to the introduction of new financial activities and, finally, the seventh article that forbids non-banking entities receive the public deposits and other funds refundable.

The other four chapters regulate the legal status of each of the four existing types of operational entities of the Andorran financial system and each of these chapters is structured in three sections: the first section, which regulates General provisions of entity type; the second section, which regulates the conditions for access to the activity; and the third section, which regulates the conditions for exercising the activity.

This law entails the repeal of the law regulating the powers of the various operational components of the financial system, of December 19, 1996; the repeal of the law 24/2008 of 30 October, on the legal regime of the non-banking financial institutions-specialised credit; the repeal of the law 13/2010, 13 may, on the legal regime of the investment banks and management companies of collective investment undertakings and the repeal of articles 8 to 17 of 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.

"Also change articles 2, 15, 16 and 21 of the law regulating the disciplinary regime of the financial system, of 27 November 1997, with the aim of adapting its provisions in this law since, in certain paragraphs, or lyrics, the rule referred to provisions currently repealed or obsolete.

Chapter first. General provisions Article 1 Purpose the purpose of this law is to establish the legal regime of the operating entities of the financial system as well as several provisions that regulate the exercise of the financial activities in the Principality of Andorra.

Article 2 Definitions 1) 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.

2) proper professional experience: it is believed to have adequate professional experience the people that have played, with normal, during a period of more than three years functions administration, management or control of the banks, or functions of a similar responsibility in other organizations, public or private, of significant dimension.


3) good repute and professional business: they are considered persons of recognized good repute and professional business that have a good personal and professional reputation, people the public image of which corresponds to that of good administrators and, in a specific way, that: a) do not have a criminal record for crimes of forgery, of infidelity in the custody of documents, in violation of secrets , of embezzling public flows, of discovery and revelation of secrets or offences against patrimony;

b) have no criminal record for other malicious crimes;

c) are not or have been disabled to exercise public office or administration or management bodies of the financial system in Andorra or abroad;

d) have not been declared bankruptcies or in a situation of legal arrangement, and if they have been, have been legally rehabilitated.

4) Financial Instruments: financial instruments is understood to mean the wider sense of the term, and especially, those who are listed below:-negotiable securities.

-money market Instruments.

-Participation of CROS.

-contracts of options, futures, swaps (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.

-contracts of options, futures, swaps (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).

-contracts of options, futures, swaps (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.

-contracts of options, futures, swaps (swaps), term interest rate agreements and any other derivative contracts relating to commodities that can be cleared by means of physical delivery is not mentioned in the previous section and not intended for commercial purposes, which have 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 guarantee.

-Derivative Instruments for the transfer of credit risk.

-Financial Contracts for differences.

-contracts of options, futures, swaps (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.

5) own resources: for the purposes of this law, it is understood to own resources which are referred to as equity in the law on regulation of solvency and liquidity criteria in financial institutions, of 29 February 1996.

6) negotiable securities: are understood by negotiable securities categories which are negotiable on the capital market, with the exception of instruments of payment, such as:-shares in companies and other securities equivalent to shares in companies, partnerships or other entities, and certificates of deposit are representative of actions;

-bonds or other forms of titulitzat debt, including certificates of deposit are representative of these values;

-all other values that give 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.

Article 3 composition of the Andorran financial system the Andorran financial system is defined as the financial system that operates in the Principality of Andorra and which includes: a) financial activities regulated and exercised by the operating entities of the Andorran financial system;

b) the Andorran financial markets;

c) other activities in relation to the operating entities of the Andorran financial system and financial markets, including the professional associations of the financial sector.

The operative bodies of the Andorran financial system are the following: a) banks;

b) investment financial institutions;

-financial investment societies;
-investment financial agencies;
-asset management companies;
-financial advisors.

c) management companies of collective investment institutions; and non-banking financial institutions)-specialised credit.

Finally, also part of the Andorran financial system any financial agent acting in the name or on behalf of any of the operating entities of the financial system in accordance with the provisions of article 27.

Article 4 financial organizations with a social object that do not form part of the financial system 1. Do not have the condition of financial institutions, for the purposes of the present law and, therefore, do not form part of the financial system, the legal persons who, despite having in the corporate purpose any of the activities of the related in articles 20 and 21, does not provide its services to third parties but we do exclusively within the economic sphere of their shareholders and do not allow the public offer of shares (instrumental companies). These limitations must be viewed in its articles of Association. In particular, the possession of shares or property management acting on their own.

2. Either form part of the financial system and financial investment management instrumental societies intragroup as set out in the legislation.


3. Finally, do not have the condition of financial institutions, for the purposes of the present law and, therefore, do not form part of the financial system, the legal persons who, despite having in the corporate purpose any of the activities of the related letters a), b), c) and d) of paragraph 1 of article 49, it does not provide its services to third parties but we do exclusively within the economic sphere of their shareholders and do not allow the public offer of shares (companies instrumentals). These limitations must be viewed in its articles of Association.

Article 5 Prohibition of providing banking or financial activity without prior administrative authorisation no person, natural or legal, you can pay a professional to third parties one or more services on financial instruments or auxiliary, nor any of the activities or services that are referred to in articles 8, 20, 21, 38 and 49, if you have not previously obtained the corresponding administrative authorization.

Article 6 introduction of new financial activities 1. The Government, faced with the introduction or the realization of new financial activities that are not technically comparable to the provisions of the legislation will be submitted to the General Council, with the technical report of the Institut Nacional Andorrà de Finances (from now on INAF), a legislative proposal of integration of these new activities in the Andorran financial system.

2. Empowers the Government because, with the previous report of the INAF, can have that is on hold, prohibit by injunction, the eventual introduction or the development of activities that are the subject of the previous point, while it is relayed to the General Council the documentation and information needed for this regulates the new activities in question.

Article 7 Prohibition of non-banking entities to receive deposits from the public and other non-refundable funds 1. Non-banking institutions are not empowered to receive deposits from the public and other non-refundable funds.

2. For this purpose, do not constitute public reimbursable funds the funds received by the financial institutions and the management companies of collective investment institutions in the framework of the provision of investment services defined in the letters d) and e) of article 20 and the auxiliary service defined in the letter a) of article 21, to carry out investments on behalf of their clients; funding granted by banks; the funds given by entities belonging to the same group or by at least 5 per 100 headlines partners of the social capital and securities emissions carried out in accordance with the regulations in force.

Second chapter. The legal system of the banks first section. General provisions Article 8 Definition 1. Bank is understood to be a company that is dedicated to receiving deposits from the public and other reimbursable, and grant credits, of any nature, on their own.

2. The banks may develop the following activities: a) receipt of deposits or other funds refundable;

b) loans and credits, including, in particular, consumer credit, mortgage credit, factoring, with or without recourse, and financing of commercial transactions (including forfaiting);

c) financial leasing (leasing) and non-financial leasing (renting) with an option to purchase or not;

d) granting of guarantees and commitments of subscription;

e) payment transactions;

f) issuing and managing means of payment, among others, credit cards, traveller's cheques and cheques;

g) transactions for its own account of the company or on behalf of their clients who have to:-money market instruments (cheques, effects, certificates of deposit, etc.),-markets of changes,-financial instruments currency instruments and options, term-or about interest rates, and-negotiable securities;

h) participation in the issuance of securities and the provision of related services;

and intermediation in interbank markets);

j) commercial reports;

k) rental of safes;

the investment services and auxiliary) related to articles 20 and 21.

3. Banking institutions that also want to perform management activities of collective investment institutions and/or activities of life insurance companies can do it only by participating with the majority or a minority character in management companies of collective investment institutions and/or life insurance companies, which may be set up for this purpose and must be legally distinct and due to its location.

However, the life insurance contracts can be performed using the structures of the Bank.

4. Banks cannot be spent directly to any economic activity that is not limited to the financial sector with exclusion of the complementary to those indicated in paragraph 2. Complementary activity is understood as any activity involving being the extension of the business without detracting from the corporate purpose of the Bank.

5. The direct or indirect shareholdings of banks in non-financial entities of Andorra may not be higher than 25% of the share capital of the company participated with the exception of the insurance companies exclusively, in which can achieve up to 100% of their social participation.

Excluded from this limit the investments in non-financial instrumental societies, the object of which is exclusively to provide a service to the institution or to manage assets of the entity.

In cases where, as a derivation of a credit operation or other circumstances unrelated to the will of a bank will have to take care of a stake larger than that stipulated in the first paragraph of this section in a financial company, you must notify the INAF and should regularize the situation within a period of two years. For a possible postponement of this regularization period will require the prior authorization of the INAF.

6. The accounting value of the direct or indirect shareholdings of banks in non-financial entities may not exceed 40% of the own funds of the Bank. This percentage will be counted within the limits set by article 13 of the law on regulation of solvency and liquidity criteria in financial institutions, of 29 February 1996.

7. The General Council establishes the criteria and indicates the circumstances will be taken into account in order to attribute the character of general interest to certain investments.


Once defined by Law the criteria and circumstances to attribute the character of general interest to certain investments, the Ministry in charge of finance, with the previous report of the INAF, agreed exceptions to sections 5 and 6 of the same article, for a definite or indefinite period.

For the purposes of the present law, the investments in public companies, as are defined in the legislation, are excluded from the application of paragraphs 5 and 6 above.

Second section. Conditions for access to the activity Article 9 Form the banks should take the form of joint-stock company of Andorran law of indefinite duration.

Article 10 Designation the use or registration as an element of any distinctive sign (trademark, corporate name, trade name, business sign or internet address) of the terms "Bank", "Bank", "banking", or any other that may induce to confusion, by other entities that a Bank, it is understood that it is a sign of deceitful nature or nature to mislead the public and subject to the actions of nullity and prohibit use corresponding except in cases where the word "Bank" is accompanied by a qualifier that avoids any confusion, as for example "blood bank".

Article 11 The Home address, the Administration and the effective management of banks should be established in the national territory.

Article 12 corporate purpose the exclusive object of the banking entities should determine in their by-laws and limited to the activities, in accordance with the legislation in force, can be integrated into it.

Article 13 social Capital the banks must have a minimum capital of EUR 30 million, fully subscribed and paid up by means of monetary contributions.

Article 14 Board of Directors 1. The banks must have one Board of Directors composed of at least five members.

2. The people who make up the Board of Directors, including those individuals who represent the legal persons, must be a person of good repute and professional business recognized.

3. The majority of members of the Board of Directors, including those individuals who represent the legal persons, they must be people with suitable knowledge to exercise the functions inherent in the Office and with adequate professional experience.

4. The Chairman appointed may not be the ceo of the company.

5. The Board of Directors of the banks has approved an internal regulation of operation to facilitate the fulfilment of the obligations and the responsibilities of all its members.

Article 15 general management 1. The general direction has to be composed of two persons at least one of which must explicitly assume the responsibilities of intervention and control.

2. The people who make up the general direction must have appropriate knowledge and experience to perform their role.

3. The people who make up the general direction should be persons of recognised good repute and professional business.

Article 16 conditions to obtain and preserve the administrative authorization, banks must comply at all times with the conditions for access to the activity set out in the previous articles, as well as with the conditions for the exercise of this, including organisational requirements and operating conditions, set out in the legislation.

The third section. Conditions for the exercise of the activity Article 17 opening offices and hiring of personnel 1. The banks have to hold open at least an Office in a different parish in the Principality in the parish where they have installed the main office.

2. No less than half of the staff hired must be a resident of Andorra or not less than three years and must be sufficient in number and have the proper training to develop the activities that you will be infected.

3. The entities have to hire staff with the necessary knowledge to carry out the functions assigned.

Capital adequacy and liquidity rules article 18 1. Without prejudice to the obligations of the legislation on the criteria of solvency and liquidity, banks have to have solid, effective and comprehensive strategies and processes to assess and maintain on an ongoing basis the amounts, types and distribution of internal capital that they consider suitable to cover the nature and the level of risks to which they are or may be exposed. These strategies and processes should be periodically subject to internal review in order to ensure that they are comprehensive and proportional to the nature, scale and complexity of the activities of the Bank and/or the group that the heads, if applicable.

2. the own resources of the banks may not be placed below the "minimum resources", which are the level of own funds necessary to reach a solvency ratio of 10 to 100.

3. own resources of the banks may not be below the minimum mentioned in the previous paragraph, with the exception of the first two exercises of activity of the Organization, in which, solely because of the accumulated losses, the own resources may be less than the figure mentioned in a 20%, provided that the reduction of resources are sufficiently fiançada by members of the organization.

4. enable the INAF to take the necessary measures in the event of insufficient own resources and for this purpose you can also set the corresponding technical criteria that, in any case, must comply with the affected entities. In no case does this inadequacy may last for more than 24 months and own resources may not be less than 4/5 parts of the share capital at least.

5. The INAF, by means of technical release, you can provide the appropriate accessories and make the adaptations that are appropriate in relation to the criteria of calculation relating to the rules of solvency and liquidity.

Third chapter. The legal framework for investment financial institutions Section first. General provisions Article 19 Definition 1. Are financial institutions, investment people, physical or legal entities, which, in the terms established in this law, they have as main activity provide professionally one or more investment services to third parties on financial instruments and, in addition, perform other ancillary services.


2. The investment banks can also, with a prior authorization, exercise any activity complementary to the mentioned in articles 20 and 21, as long as it will allow them to develop more efficient form the main activity for which they have authorization.

Complementary activity is understood as any activity involving being the extension of the business without detracting from the corporate purpose of the investment firm. The income generated may not represent more than 25% of the income of the entity.

Article 20 investment services in accordance with this law, are considered to be investment services are the following: a) the reception and transmission of orders of the clients in relation to one or more financial instruments;

b) the execution on behalf of customers of the orders mentioned in the letter a) above, which consists of the formalization of business purchase or sale of one or more financial instruments;

c) trading for own account which consists of the formalization of operations on one or more financial instruments;

d) the discretional, individualised management of portfolios in accordance with the mandate given by the customers;

e) advising on matters of investment that consists of providing personalized recommendations to clients, upon request or on the initiative of the Bank of investment, on one or more transactions relating to financial instruments;

f) ensuring the broadcast or the placing of financial instruments;

g) the placing of financial instruments on the basis of a firm commitment;

h.) the management of multilateral trading systems. The development of this activity has been to make regulations on the part of the Government, at the proposal of the Ministry responsible for finance, which can delegate this right to the INAF.

Article 21 auxiliary services in accordance with this law, are considered to be auxiliary services are the following: a) the Administration and custody of financial instruments on behalf of customers, including the custody and related services such as cash management and guarantees;

b) granting credits or loans to an investor to allow him an operation in one or more financial instruments, when the investment bank that granted the credit or loan is involved in the operation;

c) the advice to companies in terms of capital structure, industrial strategy and related questions and advice and services relating to mergers and acquisitions of companies;

d) currency exchange services when they are related to the provision of investment services;

e) the reports of investments and financial analysis or other forms of general recommendation relating to transactions in financial instruments;

f) services related to the quality assurance of the issue or the placing of financial instruments;

g) services and the activities of investment, and complementary services referring to the underlying financial derivative financial instruments not provided for in the fifth, sixth and seventh indents of paragraph 4 of article 2, when they are linked to the provision of investment services or ancillary services.

Article 22 Type for the provision of investment and ancillary services provided for in articles 20 and 21, investment financial institutions must be set up in any of the following types: a) financial investment societies;

b) investment financial agencies;

c) asset management companies;

of financial advisors).

Article 23 financial Companies Are investment companies investment financial investment financial institutions that can perform all investment services and ancillary services provided for in articles 20 and 21 with professional character, both on their own as alien.

Article 24 Financial Agencies of investment are financial agencies of investment investment financial institutions that can provide all investment services, except those mentioned in the letters c) and f) of article 20, and all auxiliary services, except those mentioned in the letter b) of article 21, with professional character and only for non-account.

Article 25 asset management companies Are asset management companies of investment financial institutions that can only provide investment services mentioned in the letters of) and e) of article 20 and the ancillary services mentioned in the letters c and e)) of article 21.

In addition, solely in connection with the activity of discretional, individualised management of portfolios in the form of direct management, the asset management companies can provide auxiliary service established in the letter a) of article 21, with the understanding that the assets in custody must be deposited in accordance with the requirements of the legislation.

Article 26 financial advisors financial advisors Are financial institutions in the form of a natural or legal person, who can only provide the service of investment mentioned in the letter e) of article 20 and the ancillary services mentioned in the letters c and e)) of article 21.

Article 27 financial Agents 1. The operational entities of the financial system that provide investment services or ancillary services in accordance with its administrative authorization can appoint financial agents linked with the aim of promoting these services, to attract business or receiving orders from clients or potential clients and transmitting them, placing financial instruments and providing advice on fingering instruments and financial services.

2. the financial agents can only act in exclusive and full and unconditional responsibility of the entity that designates and act in the name and for his account as long as this are contracted by awarding them the power of sufficient representation.

3. Financial institutions and investment banks that were designated financial agents must ensure that these inform the client or potential client the capacity in which they act and the entity who represent when you contact or before doing business with them.

4. Financial institutions and investment banks that designate a financial agent must verify that this has recognized business and professional good repute and who owns the General knowledge, and appropriate professionals to be able to communicate accurately to the client or potential client all the relevant information about the proposed service.


5. Financial institutions and investment banks that were designated financial agents must take the appropriate measures to avoid any negative impact that other activities of the financial agent may have with respect to the activities that the financial agent performs on behalf and for account of these.

6. Financial institutions and investment banks wishing to appoint a financial agent must submit the appropriate application form to the INAF and obtain confirmation prior to the start of the activity of the financial agent linked.

Second section. Conditions for access to the activity Article 28 Is The investment banks should take the form of joint-stock company of Andorran law of indefinite duration. However, financial advisors and financial officers can be both individuals and take the form of limited companies or limited liability of Andorran law and of indefinite duration.

Article 29 the Name use or registration as an element of any distinctive sign (trademark, corporate name, trade name, business sign or internet address) of the terms "financial investment entity", "investment financial company", "financial investment agency", "asset management company", "financial advisors" or any other that may induce to confusion, as well as abbreviations, "EFI", "SFI", "AFI", "SGP", "ASF", by other entities that they will understand that it is a sign of deceitful nature or nature to mislead the and subject to the actions of nullity and prohibit corresponding use.

Article 30 registered office The registered office, the Administration and the effective management of the investment banks have been established in the national territory.

Article 31 social Object the object of the investment banks has been to determine the statutes and limited to one, some or all of the investment services and ancillary or planned for each type to articles 23 to 26.

Article 32 social Capital 1. Investment financial institutions must have the following minimum share capital, fully subscribed and paid up by means of monetary contributions, depending on the type of financial investment entity in question: a) 2 million euros, financial investment societies;

b) 600,000 euros, investment financial agencies;

c) 150,000 euros, the asset management companies;

of 50,000 euros), the financial consultant.

2. The physical and legal persons authorised to act as financial advisors must subscribe to professional liability insurance that allows them to deal with the responsibility for negligence in the exercise of their professional activity with minimum coverage of 1,000,000 euros to claim for damages and a total of 1,500,000 euros per year for all claims.

Article 33 administrative Body 1. The organ of Directors of financial institutions in the form of a legal entity should take the form of the Board of Directors and must have at least three members.

2. The members of the Board of Directors, including those individuals who represent the legal persons, must be a person of good repute and professional business recognized.

3. The majority of members of the Board of Directors, including those individuals who represent the legal persons, they must be people with suitable knowledge to exercise the functions inherent in the Office and with adequate professional experience.

4. The Chairman appointed may not be the ceo of the company.

5. The Board of Directors of the financial entities of investment has approved an internal regulation of operation to facilitate the fulfilment of the obligations and the responsibilities of all its members.

Article 34 general Directorate the directorate general, which necessarily must have investment, financial institutions must be made up of one or more persons of good repute and have appropriate knowledge and recognized professional in order to exercise the duties inherent in the position and a suitable professional experience. However, in the case of individuals who have the condition of financial advisors, these requirements must attend on these people.

Article 35 conditions to obtain and preserve the administrative authorization, the investment banks must comply at all times with the conditions for access to the activity set out in the previous articles, as well as with the conditions for the exercise of this, including organisational requirements and operating conditions, set out in the legislation.

The third section. Conditions for exercising the activity Article 36 opening offices and hiring staff with the investment banks should be kept open at least an Office in a district of the Principality and the staff there are pay services must be sufficient in number and have the proper training for the development of the activities that you will be infected. At least twenty-five percent of the professional staff pay services must be resident in the Principality of Andorra or with a seniority of no less than two years.

Article 37 standards of solvency without prejudice to the obligations of the legislation on the criteria of solvency, investment financial institutions should have strategies and processes solid, effective and comprehensive to assess and maintain on an ongoing basis the amounts, types and distribution of internal capital that they consider suitable to cover the nature and the level of risks to which they are or may be exposed. These strategies and processes should be periodically subject to internal review in order to ensure that they are comprehensive and proportional to the nature, scale and complexity of the activities of the financial institution and/or of the group that this leads, as applicable.

The fourth chapter. The legal system of the management companies of collective investment bodies Section first. General provisions Article 38 Definition 1. Are management companies of collective investment institutions Andorran law societies that deployed as main activity the functions and duties provided for in articles 61 to 63 of the law 10/2008 of 12 June, regulating collective investment bodies of Andorran law.


2. However, the management companies of collective investment institutions can also deploy the functions defined in the letters d) and e) of article 20 and those relating to the custody and administration of the investments of the investment funds and, where appropriate, of the shares of the investment companies, which manage.

In addition, solely in connection with the activity of discretional, individualised management of portfolios in the form of direct management, the management companies of collective investment institutions can provide auxiliary service established in the letter a) of article 21 with the understanding that the assets in custody must be deposited in accordance with the requirements of the legislation.

Second section. Conditions for access to the activity Article 39 Is The management companies of collective investment bodies should take the form of joint-stock company of Andorran law of indefinite duration.

Article 40 Name use or registration as an element of any distinctive sign (trademark, corporate name, trade name, business sign or internet address) of the term "management company of collective investment organism", or any other that may induce to confusion, as also the abbreviation, "SGOIC", by other entities that they will understand that it is a sign of deceitful nature or nature to mislead the public and subject to the actions of nullity and prohibit corresponding use.

Article 41 registered office The registered office, the Administration and the effective management of the management companies of collective investment institutions have been established in the national territory.

Article 42 social Object the object of the legal and social management companies of collective investment institutions has been to determine the statutes and must be limited to the activities referred to in Title VI of the law 10/2008 of 12 June, regulating collective investment bodies of Andorran law as well as to those included in this law that may develop these entities.

Article 43 Capital The management companies of collective investment institutions must have a minimum share capital of 300,000 euros, fully subscribed and paid up by means of monetary contributions.

Article 44 the Board of Directors 1. The Committee of Directors of the management companies of collective investment bodies should take the form of the Board of Directors and must have at least three members.

2. The members of the Board of Directors, including those individuals who represent the legal persons to the Board must be persons of good repute and professional business recognized.

3. The majority of members of the Board of Directors, including those individuals who represent the legal persons to the Board, they should be people with suitable knowledge to exercise the functions inherent in the Office and with adequate professional experience.

4. The Chairman appointed may not be the ceo of the company.

5. The Board of Directors of the managing bodies of collective investment bodies must approve an internal regulation of operation to facilitate the fulfilment of the obligations and the responsibilities of all its members.

Article 45 the general Direction The management companies of collective investment bodies must have necessarily a directorate-general, which should be formed by one or more persons of good repute who have recognized business and professional knowledge suitable to exercise the duties inherent in the position and a suitable professional experience.

Article 46 Conditions in order to obtain and retain the administrative authorization, the management companies of collective investment institutions must comply at all times with the conditions for access to the activity set out in the previous articles of this chapter, as well as with the conditions for the exercise of this, including organisational requirements and operating conditions, set out in the legislation.

The third section. Conditions for the exercise of the activity Article 47 opening offices and hiring staff with the management companies of collective investment institutions must hold open at least an Office in a district of the Principality and the staff there are pay services must be sufficient in number and have the proper training to develop the activities that you will be infected. At least twenty-five percent of the professional staff pay services must be resident in the Principality of Andorra or with a seniority of no less than two years.

Article 48 1 solvency standards. Without prejudice to the obligations of the legislation on the criteria of solvency, the management companies of collective investment institutions should have strategies and processes solid, effective and comprehensive to assess and maintain on an ongoing basis the amounts, types and distribution of internal capital that they consider suitable to cover the nature and the level of risks to which they are or may be exposed. These strategies and processes should be periodically subject to internal review in order to ensure that they are comprehensive and proportional to the nature, scale and complexity of the activities of the management company of collective investment institutions and/or of the group that this leads, as applicable.

2. The management companies of collective investment institutions must maintain a minimum resources which cannot be lower than the minimum social capital, increased by 2 per 1,000 of the value of the net assets of collective investment institutions to manage.

3. net assets shall be understood as the result of eliminating the cross-ownership interests that may exist between organisms of the same collective investment management company.

4. enable the INAF to take the necessary measures in the event of insufficient own resources and for this purpose you can also set the corresponding technical criteria that, in any case, must comply with the affected entities. In no case does this inadequacy may last for more than 24 months.

5. The INAF, by means of technical release, you can provide the appropriate accessories and make the adaptations that are appropriate in relation to the criteria of calculation relating to the requirements of the minimum resources of the management companies of collective investment institutions.

Chapter five. The legal status of the non-banking financial institutions-specialised credit Section first. General provisions Article 49 Definition


1. Are financial institutions-non-banking specialist credit institutions the social object exclusively and legally certain of which make up one, several or all of the following activities: a) loans and credits, including the following: i. consumer credit, ii. the financing of commercial transactions (including forfaiting), and iii. the mortgage credit.

b) Factoring with recourse or without, and the complementary activities of research and classification of the clientele, compatibility of debtors and, in general, any other activity that promotes the management, execution, security and financing of credits that are transferred.

When the insolvency of the debtor (client) are performed by the transferor, it is understood that we are in a case of factoring with recourse while, if they are taken to the factoring company, it is understood that we are in a case of non-recourse factoring.

In case of suspension of payments or bankruptcy of the debtor (client), the payments made for this in the factoring company, prior to the Declaration of suspension of payments or bankruptcy, will not be subject to termination. In the event that payments have been made with maturity after the suspension of payments or bankruptcy or if it is shown that the transferor and the factoring company knew the State of insolvency of the debtor (client) on the date of payment by the company of factoring to the transferor, the revocation will not affect the business of factoring, except in the case of Covenant in contrast between this and the transferor.

c) financial leasing (leasing) and the complementary activities of maintenance and conservation of the goods transferred, granting financing connected to a leasing operation, current or future, brokerage and management of operations of financial leasing, leasing with option to buy not financial or not (renting) and advice and commercial reports.

d) issuance and management of credit cards.

e) granting sureties and other guarantees.

2. Any activity complementary to the listed previously to enable the organizations to develop a more efficient form the main activity for which they have authorisation can also be carried out prior authorization of the INAF. It is understood as a complementary activity any activity being generated revenues which do not represent more than 25% of the income of the entity.

3. The direct or indirect shareholdings by financial institutions-specialised credit institutions non-banking business, Andorra, non-financial, may not be higher than 25% of the capital of the investee entity.

4. in cases where, as a derivation of a credit operation or other operations unrelated to the will of a financial institution – no specialised credit Bank, this will have to take care of a participation in an entity, larger than that stipulated in the preceding paragraph, the entity must notify the INAF and should regularize the situation within a period of two years.

5. For a possible postponement of this regularization period, it will require the prior authorization of the INAF.

Second section. Conditions for access to the activity Article 50 Form non-banking financial institutions-specialised credit must take the form of joint-stock company of Andorran law of indefinite duration.

Article 51 the Name use or registration as an element of any distinctive sign (trademark, corporate name, trade name, business sign or internet address) of the terms "financial institution – no specialised credit Bank" or another that may induce to confusion with this as well as the abbreviations "EFCE" "EFNBCE" by other entities that they will understand that it is a sign of deceitful nature or nature to mislead the public and subject to the actions of nullity and corresponding use ban.

Article 52 registered office The registered office, the Administration and the effective management of financial institutions-non-banking specialist credit must be established in the national territory.

Article 53 corporate purpose the social object exclusively and legally determined non-banking financial institutions-specialised credit should determine in their by-laws and limit yourself to one, several or all of the activities listed in article 49.

Article 54 social Capital financial institutions-non-banking specialist credit should be set up and maintain a minimum share capital of 2 million euros, fully subscribed and paid up by means of monetary contributions.

Article 55 the Board of Directors 1. The organ of Directors of financial institutions-non-banking specialist credit determined in its by-laws must take the form of the Board of Directors.

2. non-banking financial institutions-specialised credit must have one Board of Directors composed of three members at least.

3. The members of the Board of Directors, including those individuals who represent the legal persons, must be a person of good repute and professional business recognized.

4. The majority of members of the Board of Directors, including those individuals who represent the legal persons, they must be people with suitable knowledge to exercise the functions inherent in the Office and with adequate professional experience.

5. The president appointed in any case may be the same as the general manager of the company.

6. The Board of Directors of financial institutions-non-banking specialist credit must approve an internal regulation of operation to facilitate the fulfilment of the obligations and the responsibilities of all its members.

Article 56 general Directorate the directorate general, which necessarily must have financial institutions-non-banking specialist credit, must be formed by one or more persons of good repute and have recognized business and professional knowledge suitable to exercise the duties inherent in the position and a suitable professional experience.

Article 57 conditions for obtaining and maintaining the administrative authorization, non-banking financial institutions-specialised credit must comply at all times with the conditions for access to the activity set out in the previous articles, as well as with the conditions for the exercise of this, including organisational requirements and operating conditions, set out in the legislation.

The third section. Conditions for exercising the activity Article 58 opening offices and hiring staff


1. non-banking financial institutions-specialised credit should keep open at least an Office in the Principality.

2. The professional staff pay services must be sufficient in number and must have the proper training for the development of the activities that you will be infected and at least half must be Andorran nationals or residents in the Principality with a seniority of no less than three years.

Article 59 solvency and liquidity regulations 1. Financial institutions-non-banking specialist credit are subject to the same rules of solvency (solvency ratio and concentration of risks) that of the banking entities defined in the law on regulation of solvency and liquidity criteria in financial institutions, of 29 February 1996.

2. Without prejudice to the obligations arising from the legislation on capital adequacy and liquidity criteria in financial institutions, non-banking-specialised credit should have strategies and processes solid, effective and comprehensive to assess and maintain on an ongoing basis the amounts, types and distribution of internal capital that they consider suitable to cover the nature and the level of risks to which they are or may be exposed. These strategies and processes should be periodically subject to internal review in order to ensure that they are comprehensive and proportional to the nature, scale and complexity of the activities of the financial institution-no credit-Bank and/or the group that the heads, if applicable.

3. It is understood to own resources the level of minimum own funds necessary to reach a solvency ratio of financial institutions-non-banking specialist credit of 10%. The own resources of the non-banking financial institutions-specialised credit may not be placed below this minimum.

4. own resources of the non-banking financial institutions-specialised credit can not be below the minimum mentioned in the previous paragraph, with the exception of the first two exercises of activity of the Organization, in which, solely because of the accumulated losses, the own resources may be less than the figure mentioned in a 20%, provided that the reduction of resources are sufficiently fiançada by members of the organization.

5. the INAF is enabled to take the necessary measures in case of lack of resources. In any case, this inadequacy can not last more than 24 months and own resources may not be less than 4/5 parts of the share capital at least.

6. The INAF, by means of technical release, you can provide the appropriate accessories and make the adaptations that are appropriate in relation to the criteria of calculation relating to the rules of solvency and liquidity.

Additional provision the provisions of this law shall be subject to the sanctions stipulated by the law regulating the disciplinary regime of the financial system, of 27 November 1997.

Repealing the law are repealed regulation of the operational of the different components of the financial system, from December 19, 1996, the law 24/2008 of 30 October, on the legal regime of the non-banking financial institutions-specialised credit, law 13/2010, 13 may, on the legal regime of the investment banks and management companies of collective investment institutions , articles 8 to 17 of 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 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 in charge of finance, should foresee the regulations the framework of action related to the development of the activity of management of multilateral trading systems, which can delegate this right to the INAF.

Second final provision will enable the INAF to develop, through the issuance of technical releases, the provisions set out in this law.

Third final provision modifies the article 2 of the law regulating the disciplinary regime of the financial system, of 27 November 1997, which is worded as follows: "Article 2.

Subject and authors Are authors and subjects responsible for infringements: the banks, non-banking financial institutions-specialised credit, financial institutions and investment management companies of collective investment institutions that incur in the actions and omissions classified as an offence in this Act.

Are the subjects responsible for the infringement are those who have positions of directors or general management, in law or in fact, on the entities editors responsible for the infringement, when the violations are attributable to their fraudulent conduct or negligent.

For the purposes of the preceding paragraph, exercise positions of directors or general management, in law or in fact, administrators or members of its governing bodies Board of directors or persons who exercise functions of senior management. "

The fourth final provision amending articles 15 and 16 of the law regulating the disciplinary regime of the financial system, of 27 November 1997, which are written as follows: "Article 15.

Very serious offences Are very serious offences offences that affect substantially the solvency, liquidity and the stability of the entities or that violate the legitimacy of operations, the structure of the financial system, and the violations that prevent knowing the real situation of the company.

They constitute very serious violations: a) The receipt of money from the public, in the form of deposits or other funds refundable, without having the legal capacity, in accordance with the legislation in force.

b) the exercise of other specific activities reserved exclusively to each of the different types of operational entities of the financial system in accordance with the legislation on the part of institutions of the financial system that does not have the legal faculty.

c) the exercise of economic activities that are not characteristic of the financial system, or that are unrelated to its corporate purpose, with the exception of the legally authorized.

d) the breach during a period of 6 months, or more, of the rules of solvency, liquidity and concentration of risk laid down in articles 6, 11, 12, 15 and 17 of the law on regulation of solvency and liquidity criteria, dated 29 February 1996.


e) breach of the duty to submit the individual and consolidated annual accounts, if necessary, to an audit of the accounts according to the provisions of the legislation.

f) refusal to provide information on the Institut Nacional Andorrà de Finances or lack of accuracy in the information provided that would prevent exercise appropriately the supervision and learn about certain aspects of the real situation of the company or of the group that it heads.

g) the Commission of over three serious violations within a year. "" Article 16.

Serious offences Are serious offences offences that affect the solvency, liquidity and the stability of the institutions, that do not involve a very serious infringement, and violations that make it difficult to know the real situation of the company.

Constitute serious violations: a) the breach of the rules in force in the area of obligatory investment ratios.

b) failure to comply with the rules in force in the field of guarantee of deposits and investments for banks.

c) failure to comply with the rules in force in the area of deposit guarantee reserves and other operational obligations for non-banking financial institutions.

of) the fact of not having the accounting in the form prescribed by law or to bring it to the knowledge of the economic situations of the company it abnormalities, patrimonial and financial matters of the organization.

e) the breach of the rules of solvency, liquidity and concentration of risk laid down in articles 6, 11, 12, 15 and 17 of the law on regulation of solvency and liquidity criteria in financial institutions, of 29 February 1996, provided that this constitutes a very serious infringement in accordance with the provisions of the previous article.

f) failure to comply for a period of 6 months, or more, of the rules of solvency on the part of financial institutions, investment or the management companies of collective investment institutions.

g) the fact that leave to meet the personal and professional characteristics established by the legislation in force in relation to the members of the Board of Directors and the members of the directorate general.

h.) the fact of ceasing to meet the organizational requirements and the operating conditions established in the current legislation.

and) the fact of leaving to fulfil the rules relating to the protection of the investor in accordance with the legislation in force.

j) the excuse or the resistance to provide information to the Andorran National Institute of finance, directly or by means of the external auditors, which prevent to know certain aspects of organizational, economic situations and property of the company or of the group that it heads.

k) the Commission of over three minor offences within a year. "

Fifth final provision modifies the article 21 of the law regulating the disciplinary regime of the financial system, of 27 November 1997, which is worded as follows: "the amount of the penalties imposed should be admitted to the Andorran National Institute of finance, on behalf of the Institute."

A sixth final provision was introduced following amendments to article 4 of the law on regulation of solvency and liquidity criteria in financial institutions, of 29 February 1996: in the section that contains the scaling of risk weighting, the numbers 11 and 14 are drafted as follows: "11. Accounts that recorded the documentary credits, the unused credit lines, operations financial rental with option to purchase (leasing), the operations of management of invoices with total or partial summaries of Treasury and other comparable operations. ", and" 14. Mortgage housing credits and purchasing operations of bills. "

7th 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.

François Hollande Joan Enric Vives Sicília and President of the French Republic and the Bishop of Urgell Co-prince of Andorra Co-prince of Andorra