Law 13/2010, 13 May, On The Legal Regime Of The Investment Banks And Management Companies Of Collective Investment Institutions

Original Language Title: Llei 13/2010, del 13 de maig, sobre el règim jurídic de les entitats financeres d’inversió i de les societats gestores d’organismes d’inversió col·lectiva

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Law 13/2010, 13 may, on the legal regime of the investment banks and management companies of collective investment institutions since the General Council in its session of May 13, 2010 has approved the following: law 13/2010, 13 may, on the legal regime of the investment banks and management companies of collective investment bodies preamble The legislative provisions set out in the law of regulation of the financial system, of 27 November 1993, and the law of regulation of basic administrative regime of the banking entities, of 30 June 1998, set several deadlines to regulate the activity of the investment banks.

In this sense, this law aims to meet in such premises regulating the legal regime of the investment banks and management companies of collective investment institutions. In this way it is intended to provide more safety in the Andorran financial sector.

Article 4 of the law on regulation of the operational of the different components of the financial system, from 19 December 1996, considered as financial institutions, investment institutions asset management, the investment management and the promotion of risk capital. With a view to adapting the framework of Andorra to the provisions set out on a European scale in the European Directive 2004/39/EC of 21 April 2004, more commonly known as MiFID (Markets in Financial Instruments Directive, the acronym in English), this law provides for the following: a financial investment societies);

b) investment financial agencies;

c) asset management companies;

of financial advisors).

It should be noted, on the other hand, the disappearance of the category of entities of various integrated services so far by organizations dedicated to one of the following activities: currency exchange, financial advice or financial mediation. At the date of approval of this law in the Principality there is no authoritative entity in such ways.

Made the above puntualització, it seems important to note that the financial institutions previously mentioned investment are explicitly defined its framework of action in the framework of this law and for this purpose are required a minimum capital in order to ensure the development of their activities with sufficient guarantees.

It also gives the possibility, as that is allowed on an international scale, that the organizations that provide the services of their own investment in the investment banks may have financial agents that participate directly in the promotion and marketing of the fingers services. However, the ultimate responsibility for the performance of the fingers at all times the responsibility of agents in financial investment entity authorized to operate in the Andorran financial system that has been hired, to the effect that the framework of action of these agents is not out of compliance with the legislation in force.

This law on the legal system of the investment banks and management companies of collective investment institutions is divided into three chapters, six sections, thirty-four articles, two additional provisions, seven transitional provisions, a repealing and final provision.

In the chapter included the definitions of some concepts used in the course of the law.

The first section of the second chapter in the Andorran legal system the notion of investment firm referred to in financial institutions and investment both enumerations of financial instruments, by means of a referral to the preliminary title of the law 10/2008 of 12 June, regulating collective investment bodies of Andorran law, such as investment services and auxiliary services included in the MiFID.

In the first section of the second chapter establishes the types of financial institutions investment in function of the operating field attributed to each, in accordance with the comparative experiences more coming, and that of highest to lowest extension are financial investment companies, investment financial agencies, the asset management companies and financial advisors. Equally, given the existing universal banking model in the Principality, establishes the possibility that banks may provide investment services and auxiliary listed in the law and also provides, in accordance with the Community model, which the management companies of collective investment institutions can provide certain investment services.

In the second section of the second chapter will establish the structural elements of the diet of investment financial institutions relating to the way they should have, the exclusivity of the terms, the home, the social object, the minimum capital, the body of administration and the directorate-general, and in the third section, the elements of functional nature focusing on the offices, and the minimum resources. This same structure followed in the determination of the legal status of the management companies of collective investment institutions in the third chapter, since after set the concept, the requirements are planned structural equivalents in the second section and the functional equivalent requirements in the third section.

Chapter first. Definitions Article 1 General direction for the purposes of this law, it is understood by members of the Department who have a position of director or Deputy Director general, and those who are part of the upper body of the entity.

Article 2 adequate professional experience is considered 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.

Article 3 good repute and professional business for the purposes of this law, it is considered that they are people 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:-they 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 the property;

-they have no criminal record for other malicious crimes;


-are not, nor have been disabled to exercise public office or administration or management bodies of the financial system;

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

Second chapter. Investment financial institutions Section first. General provisions Article 4 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. They are not investment banks and, therefore, do not form part of the financial system, the entities that do not provide investment services for third parties but they do exclusively within the economic sphere of their shareholders and do not allow the public sale of shares (instrumental companies).

3. The investment banks can also, with a prior authorization, exercise any activity complementary to the mentioned in articles 5 and 6, 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.

4. In accordance with this law, are financial instruments are mentioned as such in the preliminary title of the law 10/2008 of 12 June, regulating collective investment bodies of Andorran law.

5. No person, natural or legal, may not provide professionally one or more investment services to third parties on financial instruments and/or ancillary services if you have not obtained the prior administrative authorisation.

Article 5 investment services in accordance with this law, are considered to be investment services are the following: a) reception and transmission of orders of the clients in relation to one or more financial instruments.

b) 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) Negotiation on their own that involves the formalisation of operations on one or more financial instruments.

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

e) advice on investment matters which consists in 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) quality assurance of the issue or the placing of financial instruments.

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

h) management services for 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 6 ancillary 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.

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) investment and financial analysis reports 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 point 7, of the preliminary title of the law 10/2008 of 12 June, regulating collective investment bodies of Andorran law, when they are linked to the provision of investment services or ancillary services.

Article 7 Type for the provision of investment and ancillary services provided for in articles 5 and 6, the investment banks have been set up in one of the following types: a) financial investment societies;

b) investment financial agencies;

c) asset management companies;

of financial advisors).

Article 8 financial Companies Are investment companies investment financial investment financial institutions that can perform all investment services and ancillary services provided for in articles 5 and 6 with professional character both on their own as alien.

Article 9 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 5, and all auxiliary services, except the mentioned in the letter b) of article 6, with a professional character and only for non-account.

Article 10 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 5 and the ancillary services mentioned in the letters c and e)) of article 6.

Article 11 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 5 and the ancillary services mentioned in the letters c and e)) of article 6.

Article 12 financial Agents 1. Financial agents are the individuals and companies that promote and market investment services and auxiliary investment financial institution or a bank can lend, and also to carry out, in the name and on behalf of this entity, the investment services provided for in the letters) and g) of article 5 and to provide advice on the financial instruments and investment services offered by this entity.


2. the financial agents can only act on behalf and under the full responsibility of the exclusive and unconditional of a investment financial institutions provided for in article 7, or of a Bank established in article 13 authorised to provide investment services and auxiliary in the territory, provided that the grantor has contracted them the power of representation sufficient to act in the name and for his account.

Article 13 banks banks are not investment banks, but they can provide the services and auxiliary investment provided for in articles 5 and 6, provided that their by-laws and the corresponding administrative authorization I foresee their compliance specifically.

Second section. Of the conditions for access to the activity Article 14 Form 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 15 Exclusivity of the terms 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 public and subject to the actions of nullity and prohibit corresponding use.

Article 16 The Home address, the Administration and the effective management of the investment banks have been established in the national territory.

Article 17 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 8 to 11.

Article 18 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 19 Directors 1. The organ of Directors of financial institutions in the form of a legal entity shall take the form of a 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, in accordance with the definition set forth in article 3.

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 a proper professional experience, in accordance with the definition provided for in article 2.

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 20 General Directorate the Directorate General, defined in accordance with the provisions of article 1, 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, in accordance with the definitions of the articles 2 and 3. However, in the case of individuals who have the condition of financial advisors, these requirements must attend on these people.

Article 21 Conditions in order to obtain and retain the administrative authorization, investment financial institutions must comply with the conditions for access to the activity set out in the previous articles.

The third section. The conditions for exercising the activity Article 22 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 23 capital adequacy rules in relation to the provisions of the first additional provision of the law on regulation of solvency and liquidity criteria in financial institutions, of 29 February 1996, relating to the requirements to meet in the area of solvency and liquidity on the part of non-banking financial institutions, the Ministry responsible for finance must establish the rules associated with the depositories. To this effect, you can delegate this right to the INAF, which you can set the corresponding criteria through the issuance of press releases.

Third chapter. Of the management companies of collective investment bodies Section first. General provisions Article 24 Definition 1. Are management companies of collective investment institutions Andorran law societies that deployed as main activity the functions and fulfill the obligations set out in paragraph 5 of article 4 and 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 5 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.

Second section. Of the conditions for access to the activity Article 25 Form The management companies of collective investment bodies should take the form of joint-stock company of Andorran law of indefinite duration.

Article 26 the 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 27 The Home address, the Administration and the effective management of the management companies of collective investment institutions have been established in the national territory.

Article 28 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 the entities mentioned.

Article 29 the share 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 30 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, in accordance with the definition set forth in article 3.

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 a proper professional experience, in accordance with the definition provided for in article 2.

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 31 General management The management companies of collective investment bodies must have necessarily a General direction, defined in accordance with the provisions of article 1, which must be made up of 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, in accordance with the definitions of the articles 2 and 3.

Article 32 conditions to obtain and preserve the administrative authorization, the management companies of collective investment institutions must meet the conditions for access to the activity set out in the previous articles of this chapter.

The third section. The conditions for the exercise of the activity Article 33 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 34 minimum resources 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.

Net is the result of removing the cross-shareholdings that may exist between organisms of the same collective investment management company.

First additional provision modifies the article 4 of the law on regulation of the operational of the different components of the financial system, from December 19, 1996, which is worded as follows: "Have the condition of investment financial institutions: financial investment companies, investment financial agencies, the asset management companies, as well as financial advisors.".

Second 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.

First transitional provision the INAF must practice the entry in the register of financial institutions and investment management companies of collective investment institutions that on the date of entry into force of this law are authorized. For this purpose, organizations must submit, within three months from the entry into force, detailed information in relation to the investment services and auxiliary staff who wish to develop as well as the type of financial investment entity on the basis of which they wish to operate. Such information must meet the scope of the activity that you want to do with the details of the financial instruments referred to and in the media and the Organization of what they have.

In the event that the financial institution of investment or the management companies of collective investment institutions want to develop activities are not carried out until now, must apply for the corresponding authorisation to the INAF in the period mentioned previously.

Second transitional provision The investment banks and management companies of collective investment institutions that on the date of entry into force of this law are authorised must adapt to its provisions within the period of twelve months.


Third transitional provision the banks which on the date of entry into force of this law provide the investment services and auxiliary provided for in articles 5 and 6 have been adapted to its provisions within the period of twelve months.

Fourth transitional provision according to this law, is approved as a social capital paid up by contribution a monetary social capital currently subscribed and paid up by authorized entities, according to the record in the register of Companies at the date of entry into force of this law.

The capital that investment banks and management companies of collective investment undertakings authorized currently made with charge to reservations during the term established in the transitional provisions second and third are considered, for the purposes of this law, carried out by means of a monetary contribution.

Fifth transitional provision financial institutions authorised to operate prior to the entry into force of this law who have not started their activity in the period of six months to that date and all that cease to operate for a period greater than six months lost the aforementioned authorization to operate in the Andorran financial system.

In this sense, the Government report to the entities in question the withdrawal of the authorization granted in his day and proceed to publish the said resolution in the official bulletin of the Principality of Andorra.

Sixth transitional provision while approving the law on licensing scheme for the creation of new operational entities of the financial system cannot be or create or constitute or establish new operational entities of the financial system.

Seventh transitional provision the Government must anticipate the regulations the framework of action related to the development of the activity of management of multilateral trading systems.

Repealing provision Is repealed as article 5 of the law on regulation of the operational of the different components of the financial system, from December 19, 1996, as well as any provision of rank less than or equal to be opposed to what is established in this law.

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, 13 May 2010 Joseph Dallerès Codina 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 Nicolas Sarkozy Coprince Bishop of Urgell Presidentde French Republic of Andorra Co-prince of Andorra

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