Andorra’s Securities Act Brings Transparency to Financial Sector

=============================================

In a move to enhance transparency and oversight in Andorra’s financial sector, the country’s authorities have introduced new regulations aimed at securing the stability of its financial system. The Securities Act, which came into effect on [date], requires all operative entities within the Andorran financial system to maintain detailed records of their agreements with clients, transactions, and services provided.

Client Agreements and Transaction Records

• Operative entities must establish a register that includes documents outlining the terms and conditions of their agreements with clients.
• The register must also record the rights and obligations of each party, as well as any changes made to the agreement.
• Entities are required to maintain detailed records of all transactions, including:
  • Information on the parties involved
  • Nature of the transaction
  • Date and time it was executed

This data will be used to monitor and analyze market trends, identify potential risks, and ensure compliance with regulatory requirements.

Marketing Activities

• The Securities Act introduces new regulations governing marketing activities within Andorra’s financial sector.
• Entities must obtain prior authorization from the Andorran Financial Authority (AFA) to engage in active marketing activities, which include:
  • Advertising
  • Cold calling
  • Direct mail
• Exceptions to these regulations include approaches made to institutional investors on a genuine unsolicited basis. However, entities must still comply with certain requirements, such as providing clear and accurate information about the funds they are marketing.

Distribution Fees

• The Securities Act does not impose any specific restrictions on distribution fees, which are typically agreed upon between management companies and local distributors.
• Entities are required to maintain detailed records of all fees and charges related to their operations.

Depositary Entities

• Entities acting as depositaries for collective investment schemes must also comply with the new regulations.
• They are entitled to receive remuneration for their services, including a depositary fee, which is used to cover the costs associated with their duties.

The Securities Act is designed to promote transparency and stability within Andorra’s financial sector, while also protecting investors and ensuring compliance with international standards. The new regulations will come into effect on [date] and apply to all operative entities operating within the country.