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Regulatory Framework for the Financial Sector in Andorra

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MiFID II Implementation

In an effort to regulate the financial system, the Andorran General Council passed a bill incorporating MiFID II into the Andorran legal framework. The MiFID II Draft Bill aims to regulate organizational aspects, operations, and market abuse in the financial system.

Key Points

  • Regulation of organizational aspects, operations, and market abuse
  • Implementation of international standards for financial regulation

Composition of the Andorran Financial System

The Andorran financial system is composed of various entities, including:

Entities Operating within the Andorran Financial System

  • Banking entities
  • Financial investment entities (financial investment companies, agencies, asset management companies, consultants)
  • Management companies of collective investment undertakings
  • Non-banking financial institutions in specialized credit
  • Payment entities and electronic money institutions
  • Financial agents acting on behalf of other entities
  • Andorran insurance or reinsurance entities

Supervision

The Andorran National Institute of Finance (AFA) is responsible for supervising the insurance and reinsurance sector. Law 10/2013 regulates the AFA’s nature, objectives, functions, competences, and responsibilities.

Key Points

  • Regulation of the AFA’s activities and responsibilities
  • Supervision of the insurance and reinsurance sector

Financial System Framework

Law 20/2018 regulates the Andorran Financial Services Commission, which oversees the financial sector. Decree regulating the cessation of payments and insolvency (1969) governs insolvency proceedings in Andorra.

Key Points

  • Regulation of the financial services commission’s activities and responsibilities
  • Governance of insolvency proceedings

Insurance Sector

Law 12/2017 on regulation and supervision of insurances and reinsurances establishes a modern regulatory framework for the insurance market. The AFA is responsible for supervising the insurance sector, including banks and financial investment entities.

Key Points

  • Regulation of the insurance market
  • Supervision of insurance sector entities

Anti-Money Laundering/Terrorist Financing Provisions

Law 14/2017 on the prevention and fight against money or securities laundering and terrorism financing implements international standards to prevent money laundering and terrorist financing. The regulation for development of the AML Law (AML Regulation) was passed in 2019.

Key Points

  • Prevention and fight against money laundering and terrorist financing
  • Implementation of international standards

E-Commerce and Consumer Protection

Law 20/2014 regulates electronic contracting and operators that develop their economic activity in a digital space. Law 13/2013 aims to improve conditions for consumer protection and market efficiency.

Key Points

  • Regulation of e-commerce activities
  • Improvement of consumer protection and market efficiency