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MiFID – Law 8/2013

The MiFID Directive (Markets in Financial Instruments Directive) is the name of the European regulation that governs aspects related to the provision of investment services and the operation of the markets.

In Andorra, this regulation is regulated in Law 8/2013, of May 9, on the organizational requirements and operating conditions of the operating entities of the financial system, investor protection, market abuse and financial guarantee agreements and operations with over-the-counter derivatives and securities financing, as well as to its implementing regulations.

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  • Increasing investor protection
  • Ensure transparency and proper functioning of markets

All financial products will be classified according to the degree of difficulty in understanding their characteristics and the risk associated with the product, in order to adapt the applicable investor protection rules.

  • Non-complex products: are those products that, due to their characteristics and risks, the information available, market price, etc. are easier for a client to understand. For example, listed shares, government bonds, UCITS – UCITS funds, etc.
  • Complex products: are those that, due to their characteristics and risks, may be more difficult for the client to understand. For example, derivatives, structured products, private equity, etc.

Clients are classified according to their level of knowledge and experience in the financial markets, as well as their capacity to assume the risks derived from their investments.

  • Retail customers are basically all individuals, whether natural persons or legal entities, who do not invest professionally. Retail customers are those who have the least knowledge and experience in the financial markets and, for this reason, enjoy the highest level of protection.
  • Professional client: these are clients who have the necessary experience, knowledge and qualifications to make their own investment decisions and who have the capacity to assess the risks inherent in these decisions. Therefore, the level of protection granted to them will be lower than that of a retail client.
  • Eligible counterparty: these are institutional investors such as banks, investment financial institutions, insurance companies, management companies, UCIs (investment funds and SICAVs), international organizations, etc. The Law establishes a basic level of information and protection for these clients, since, by their very nature, they are understood to act directly and frequently in the financial markets.

The regulations in force establish, in certain cases, the need to obtain information on the knowledge and experience of the clients, their investment objectives and their financial situation according to the type of service to be provided and its classification. This information will be gathered through suitability and appropriateness tests, which will be carried out prior to the provision of the investment service. The objective is to be able to offer clients products or services suited to their needs.

  • The suitability test is carried out at the reception and transmission of orders (RTO) service to determine whether the client has the necessary knowledge and experience to trade the asset.
  • The suitability test is carried out in portfolio management and investment advisory services to determine both the knowledge and experience required to trade the asset and to check that the asset is suitable for the client’s objectives, risk profile and financial situation.

In order to obtain the best possible result, reasonable measures are taken with regard to customer transactions, taking into account price, costs, speed and probability in execution and settlement, volume, nature or any other consideration relevant to the execution of the order.Law 20/2018, of September 13, regulating the Andorran Deposit Guarantee Fund (hereinafter, Fagadi) and the Andorran Investment Guarantee System (hereinafter, Sagi) establishes protection systems for deposit and investment holders. The entry into force of this law increases the protection of deposit and investment holders and provides security and confidence in the Principality’s banking sector.

  • Fagadi beneficiaries are physical and legal depositors, regardless of their nationality, who hold deposits with Crèdit Andorrà, SA.
  • Sagi beneficiaries are physical or legal investors, regardless of their nationality, who hold investments deposited, managed or in custody with Crèdit Andorrà, SA.

The amount guaranteed by Sagi and Fagadi is set at a maximum of €100,000 per client and institution. This amount would be reimbursed in the event that the institution is unable to meet its obligations. Customers of Crèdit Andorrà, SA join the deposit and investment protection system by signing the Sagi and Fagadi forms.

  • Order execution policy:

The Order Execution Policy focuses on the adoption of reasonable measures to obtain the best possible result for customer transactions, taking into account the price, costs, speed and probability of execution and settlement, volume, nature of the transaction and any other relevant element in the execution of the order. In addition, this document regulates the order management circuits and systems that allow their rapid and correct execution and assignment, so that no client is harmed when operations are carried out for several of them or any trading is done on their own account with clients.

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  • Asset protection policy

The Asset Protection Policy details the measures adopted by Crèdit Andorrà, SA to protect customers’ rights over the financial instruments and funds they entrust to us, in order to prevent the improper use of these financial assets on their own account, and to establish records that allow us to distinguish the assets owned by each of the customers from those owned by the entity itself.

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  • Conflict of interest management policy

The purpose of the Conflict of Interest Management Policy is to establish the general principles and procedures for dealing with potential or actual conflicts of interest arising in the performance of investment and ancillary activities and services.

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  • Incentive policy

The Incentives Policy aims to establish a procedure for identifying, analyzing and communicating to clients the incentives given or received in connection with the provision of investment or ancillary services.

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  • Pre-contractual information for retail customers

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