Andorra Collective Investment Schemes Management Company License Guidelines

Andorra Collective Investment Schemes Management Licence The Law 7/2013, May 9th, provides the legal framework for the provision of Collective Investment Schemes Management Services in Andorra. Permitted Activities As per the Act, Collective Investment Schemes Management Companies are companies that, under Andorran law, carry out the following functions as their main activity, among others:

1. Elaboration and public deed constitution of CIS regulations, together with the depositary institution.
2. Establishment of the depository written contract, together with the depository institution.
3. Elaboration, issuance, distribution and elimination of certificates of participation, together with the depositary institution.
4. Asset management, which includes:
5. Investment decisions.
6. The exercise, through the depositary, of the economic and political rights inherent in the assets.
7. Administrative management activities, which include:
8. The determination of liquidation values, including the applicable tax regime, Accounting and legal tasks.
9. The preparation of public reports and prospectuses.
10. Determination of the results to be distributed (only for distribution CIS).
11. The control of compliance with the applicable regulations.
12. The management of the participants registry.
13. Full judicial and extrajudicial CIS representation against all types of natural and legal persons.
14. Liability management, which includes:
15. Acceptance of subscriptions, redemptions (shareholder registry) and transmission to the depositary of the corresponding orders.
16. Ordering reimbursement/sales of shares to the depositary.
17. Activities related to distribution, which include:
18. The submission of documentation (advertising reports, management reports, etc.).
19. The selection of distributors.

Legal Requirements

Sr. No	Element	Requirement(s)
	Entity Requirements	The entity making the application is an Andorran Company under the Corporation Act 1983. Company includes: Limited Liability Company Corporation General Partnership
	Director’s Requirements	The licensee will need at least 2 (two) natural person Fit and Proper Directors of any jurisdiction.
	Shareholder requirements	The Collective Investment Schemes Management will need at least one shareholder. Corporate shareholding is allowed and 100% foreign ownership is permitted.
	Compliance Officer	The Licensee must establish and maintain an appropriate and effective compliance function within the firm which operates independently of all operational and business line functions and senior or supervisory management.
	Financial Portfolio Managers	The Applicant’s Financial Portfolio Managers must be licensed or certified to perform said the activities by the AFA (Andorra Financial Authority)
	Fund Sales Representatives	The Applicant’s Fund sales representative must be licensed or certified to perform said the activities by the AFA (Andorra Financial Authority)
	Local Office	The applicant must have premises acceptable to the AFA. The premises should be able to facilitate confidential interaction between the applicant and its clients, and provide for safe and confidential storage of documents.
	Auditor	The Licensee, must establish an internal Audit department, independent from the other Company Operations or Outsource depending with the Company needs.
	Insurance	The applicant must have indemnity insurance coverage or a fidelity bond acceptable to the AFA.
	Minimum Capital Requirements	The Applicant must have the prescribed minimum paid-up capital and is able to meet the prescribed minimum net liquid capital requirement in cash or readily marketable securities. The prescribed minimum paid-up capital is € 250,000 (Approximately USD 275,000)

Ongoing Obligations

1. Licences are to be renewed annually. On application for renewal of a licence, the AFA, if satisfied that the applicant is a licensee of good standing, may grant the renewal on payment by the applicant of the annual renewal licence fee.
2. Filing of Reports: It is a requirement to file Company Reports with the Authority.
3. The Licensee must maintain appropriate policies of insurance for the purpose of indemnifying such licensee against any liability that may be incurred as a result of any act or omission by the licensee or any of its officers or employees in the conduct of the licensee’s Collective Investment Schemes Management business.

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