Andorra Investment Firm License_Guidelines

Andorra Investment Firm Licence The Law 7/2013, May 9th, provides the legal framework for the provision of the Investment Services in Andorra. Permitted Activities As per the Law, a natural or legal persons are considered financial investment firms, when their main activity is to provide one or more professional investment services to third parties with regards to financial instruments, and that in addition perform other ancillary services. The professional Investment services are;

1. The reception and transmission of client orders in relation to one or more financial instruments.
2. The execution on behalf of clients’ orders as mentioned above, which consists in the business of purchase or sale of one or more financial instruments.
3. Proprietary account negotiation that consists in the formalization of operations on one or several financial instruments.
4. The discretionary and individualized management of portfolios in accordance with the mandate given by clients.
5. Investment advice that consists in providing personalized recommendations to clients, at their request or at the initiative of the investment financial entity, on one or more operations related to financial instruments.
6. The assurance of the issue or the placement of financial instruments.
7. The placement of financial instruments, with or without, a firm commitment basis.
8. The service management of multilateral trading systems.

The following are considered ancillary services, among others:

1. The administration and custody of financial instruments on behalf of clients, including custody and related services such as treasury and guarantee management.
2. The granting of credits or loans to an investor in order to allow an operation in one or several financial instruments, when the financial investment entity that grants the credit or the loan participates in the operation.
3. Advice to companies in the field of capital structure, industrial strategy and related issues, and advice and services in relation to mergers and acquisitions of companies.
4. Currency exchange services when they are related to the provision of investment services.
5. Investments reports and financial analysis, or other forms of general recommendation regarding operations in financial instruments
6. Services related to assuring the issuance or placement of financial instruments.

There are 4 types of financial investment entities;

• Financial Investment Companies.
• Financial Investment Agencies.
• Asset Management Companies.
• Financial advisors.

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 investment Firm 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 committee or outsource depending with the Company requirements.
	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 € 300,000 (Approximately USD 330,000)

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 Investment Firm business.

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