Law regulating deposit guarantee reserves and other operational obligations to maintain and deposited by entities operating in the financial system since the General Council at its session of 11 May 1995, has approved the following: law regulating deposit guarantee reserves and other operational obligations to maintain and deposited by entities operating in the financial system reason of article 17 of the law of the financial system that, in addition to the share capital, entities in the financial system will have the obligation to hold minimum reserves of shareholders ' equity in guarantee of its obligations.

The same article provides that the General Council, by means of a specific regulation, fix the maximum limits applicable to this concept and the minimum amounts required in each entity, depending on the nature of its activity.

An analysis of the general history of the financial business activity, and a particular way the wire, we should lead to the conclusion that the fundamental factor that normally gives solidity to the entities, and therefore security to the customers, it is the quality of the professional management. The ability, prudence and foresight of leaders are the best guarantees that a financial institution can offer its customers.

Therefore, it would be useless to try to base the security of customers on a single policy based on the magnitude of the own funds of the financial institutions and mechanisms for collateral. However, that these factors contribute, in a very significant way, to give a positive structure on the balance sheet of the company and maintain an image of seriousness and strength, both in the interior and in the international relations.

In the same line of reasoning, you can evoke that in certain countries and circumstances, guarantee deposits have formed a key element and, in addition, have been the origin of the set of policies that most countries have carried out, with various and changing objectives, through coefficients of binding.

They are subjects that have evolved and evolving, non-uniform manner and in accordance with the conveniences of every country, in every stage of their economic life.

The treatment of the deposits in guarantee raises two issues: the volumes and conditions. With regard to volumes, it should be borne in mind that this is a measure that will not be only and is not intended to be a determining factor but an adjunct to guarantee factor;

Fittingly, the different regulations and regulations laid down various conditions that have put together the financial structures of the different types of organizations that make up the financial system. Therefore, it would not be appropriate to be marquessin percentages of reserves in guarantee that they were not reasonable. The General Council, by means of the present regulation, in mark the limits. On the other hand, fixed minimum amounts also to place the sector on a widespread level of demand.

The conditions that must apply to these deposits is a matter that the law of regulation of the financial system under the Faculty of the Government. It is well known that in our environment there are examples of all types at the time of the corresponding coefficients of deposits or similar measures; in a very broad range, from unpaid deposits to which they recognize a performance more or less equivalent to the market. The General Council believes that these terms constitute a very important element. Must be flexible and fixed with equity, according to the good sense of the Government. At the same time to fix them, the Government will have to take into account the circumstances that now find themselves in this matter and, when appropriate, adjust the conditions depending on the evolution of these circumstances.

Thus, this law means an advance more in the progressive fulfilment of the provisions of the law of regulation of the financial system. A regulatory deployment that does not end with the implementation of the warranty but you will have to complete with the laws and regulations established in articles 16, 20, 23 and 24 of the above-mentioned law in order to promote solidly the new stage that must combine two priorities: maintaining the soundness of the Andorran financial sector, and safeguarding the general interests of the country.

Based on the reasoning presented, the General Council has approved this law.

Article 1 The built-in entities in the financial system will have the obligation to hold minimum reserves among its permanent resources equity guarantee of their obligations, which appear in the balance sheet of banks in an account entitled "deposit guarantee reserves and other operational obligations" and the balance of the rest of the financial entities in an account entitled "Reserves in guarantee of obligations".

The amount is deposited in an account opened at the Institut Nacional Andorrà de Finances by the Government and will appear in the balance sheet of each entity, on an active account entitled "the Government of Andorra, deposit guarantee Reserves and other operational obligations."

Article 2 entities in the financial system will not be able to have access to the guarantee reserves, saved the exceptional cases that the Government will establish regulations.

Article 3 the maximum limit applicable guarantee reserves in the banks will be 4 percent of the investment volume of the entity, to all concepts, with deduction of the made with own funds and a bank source.

The basis of application of the corresponding percentage will be established on the basis of the figures in the balance sheets of the banks closed the December thirty-one thousand nine hundred and ninety-three.

In any case, the minimum amount for each of the banks will be a billion pesetas, whatever the volume of investments.

Article 4 financial institutions with credit activity, as are set forth in article 4 of the law of regulation of the financial system, must be maintained and deposited, in quality of minimum reserves, the figures indicated below, according to the subgroup to which belong under their specialization.

a) mortgage, 85 million pesetas b) Sales Sales Financing term Financing in general, Auto Sales Financing, 85 million pesetas 35 million pesetas c) financial leasing/"leasing" leasing in general, 85 million pesetas financial leasing of cars, 35 million pesetas


d) Purchase and management of payment of invoices (factoring), 85 million pesetas.

Article 5 the financial institutions with credit activity whose object more than one of the specially referred to in the preceding article 4, they will have to maintain minimum reserves and deposit equivalent to the sum of those that are fixed for each specific activity, up to a figure not exceeding the 255 million pesetas.

Article 6 the institutions defined in article 5 of the law of regulation of the financial system as other financial institutions, have to be maintained and deposited, in quality of minimum reserves, the figures indicated below, according to the subgroup to which belong to its activity: a) asset management, 25 million pesetas b) investment companies, 35 million pesetas c) portfolio companies , 35 million pesetas of) mutual funds investment, 35 million pesetas e) companies holding generic character, 35 million pesetas f) money exchange, as a main activity, 8.5 million pesetas.

Article 7 the other financial institutions that have the object more than one of the specially referred to in the preceding article 6, must maintain and deposit equivalent to the sum of the minimum reserves that are set for each specific activity, up to a figure not exceeding the 100 million pesetas.

Article 8 authorises the Government because, depending on the activity of all the financial institutions, to establish a schedule of calculation of the reserves to maintain and deposit based on a few parameters that reflect the operational volumes of the entity.

Saved the amount of minimum reserves indicated in articles 4, 5, 6 and 7 of the present law, the figure to maintain and deposit may not be higher than the equivalent of 4% of the total investments of the company, with deduction of the made with own funds and with funds of Bank origin.

For the purposes of the provisions of the previous paragraph, the investments made on behalf of customers will be able to be approved in the carried out on their own.

First transitional provision the entities affected by this law that are operating today, will be able to meet with any kind of funds allocated by the Constitution of deposit guarantee reserves and other operational obligations.

Second transitional provision the entities that are operating at the moment and that, due to a lack of own funds, cannot set up immediately the totality of the deposit guarantee reserves and other operational obligations, may be submitted to the Government, no later than 30 working days counting from the date of publication of the present law, a request within the area asking for partial deferral of compliance. However, in any case, these reservations must be completed during the period of adaptation referred to in the third transitional provision of the law of regulation of the financial system.

The Government, with the previous report of the Institut Nacional Andorrà de Finances and the opinion of the Committee of finance, give the consent to the request or desestimarà no later than 60 working days, counting from the date of entry of the application.

Third transitional provision With the appropriate scope, it is stated that the precepts embodied in this law and, in general, the regulations concerning compulsory deposits and coefficients, not the applicable the period of adaptation of the layout object third of the Spanish law of the financial system, with the exception of the salvetats explicitades in the same law.

Fourth transitional provision the General Council shall set, no later than 31 December 1997, the number of minimum share capital referred to in article 16 of the law of regulation of the financial system, once you have approved the regulations that complement the basic legislative scheme referred to in the financial field, in the raw materials and the following: a calendar) during the six months following the entry into force of the present Law solvency and liquidity criteria in financial institutions, including the rules of weighting in terms of equity, provided for in article 18 of the law of regulation of the financial system.

b) during the year 1996, the regulations of each of the groups of entities in the financial system.

c) During the first half of 1997, the disciplinary regime of the financial institutions that must be exercised by the Superior Commission of finance in accordance with the article 9 of the law on regulation of the financial system.

d) during the second half of 1997, the conditions other than the minimum share capital required for access to the activity of financial institutions and for its financial year.

Fifth transitional provision while not made the deployment of regulatory article 16 of the law of regulation of the financial system, or the General Council approved a tax bill that affects the obligations of the banks, the deposits guarantee reserves that represent these entities will not be remunerated. The actual percentage to be applied in the calculation of the reserves will be 1.25% of the volume of investments of the company, by all concepts, with deduction of the made with own funds and a bank source.

The Government, subject to a report of the INAF and opinion of the Committee of finance, adjust annually the percentage mentioned in the preceding paragraph, to the extent that is necessary in order to keep stable the annual global economic cost for the banks as a result of the application of the present law and the law regulating the obligatory investment ratios , 30 June 1994.

Sixth transitional provision Decree on public debt of 22 August 1994, it passes in all its terms and conditions.

Repealing the first abolishes all provisions of equal or lower rank that is versus offline with the provisions of the present law.

First final provision authorises the Government to dictate the arrangements necessary for the effective development of the present law.

Second final provision this law shall enter into force on the day of its publication in the official bulletin of the Principality of Andorra.

Casa de la Vall, 11 May 1995 Josep Dalleres 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.

François Mitterand Joan Martí Alanis, President of the French Republic the Bishop of Urgell Co-prince of Andorra Co-prince of Andorra