Rules and guidance

This section contains information regarding the text of the legal provisions, regulations and technical communiqués, as well as the general guidelines adopted in the Principality of Andorra within the field of prudential standards applicable to banking entities and investment firms.

Transposition and implementation of Directive 2013/36/EU and Regulation 575/2013 have been mainly carried out with the incorporation into the Andorran legal framework of:

1. Law 35/2018, of 20 December, on solvency, liquidity and the prudential supervision of banking entities and investment firms (Law 35/2018), which was published in the Official Gazette of the Principality of Andorra (BOPA) on 23 January 2019 and which represents a significant leap with respect to the Law regulating the criteria of solvency and liquidity for financial bodies of 29 February 1996.

Nevertheless, it has also meant the modification -through final provisions of Law 35/2018- of the current legal framework as detailed below:

2. Regulation implementing Law 35/2018, of 20 December, on solvency, liquidity and the prudential supervision of banking entities and investment firms, which was approved by the Government on 6 March 2019.

3. Regulation concerning the adoption of European Union technical standards applicable in matters of solvency, liquidity and prudential supervision of banking entities and investment firms, which was approved by the Government on 3 April 2019 and through which various regulatory technical standards issued by the European Commission are incorporated into the Andorran legal framework. Specifically, the following:

  • Commission Delegated Regulation (EU) 2016/101 of 26 October 2015 supplementing Regulation (EU) No 575/2013 of the European Parliament and of the Council with regard to regulatory technical standards for prudent valuation under Article 105 (14) (Official Journal of the European Union, L 21, 28.1.2016 , p. 54).
  • Commission Delegated Regulation (EU) No 241/2014 of 7 January 2014 supplementing Regulation (EU) No 575/2013 of the European Parliament and of the Council with regard to regulatory technical standards for Own Funds requirements for institutions (Official Journal of the European Union, L 74, 14.3.2014, p. 8).
  • Commission Delegated Regulation (EU) 2015/850 of 30 January 2015 amending Delegated Regulation (EU) No 241/2014 supplementing Regulation (EU) No 575/2013 of the European Parliament and of the Council with regard to regulatory technical standards for Own Funds requirements for institutions (Official Journal of the European Union, L135, 2.6.2015, p. 1).
  • Commission Delegated Regulation (EU) 2015/923 of 11 March 2015 amending Delegated Regulation (EU) No 241/2014 supplementing Regulation (EU) No 575/2013 of the European Parliament and of the Council with regard to regulatory technical standards for own funds requirements for institutions (Official Journal of the European Union, L150, 17.6.2015, p. 1).
  • Commission Delegated Regulation (EU) No 525/2014 of 12 March 2014 supplementing Regulation (EU) No 575/2013 of the European Parliament and of the Council with regard to regulatory technical standards for the definition of market (Official Journal of the European Union, L 148, 20.5.2014, p. 15).
  • Commission Delegated Regulation (EU) No 1187/2014 of 2 October 2014 supplementing Regulation (EU) No 575/2013 of the European Parliament and of the Council as regards regulatory technical standards for determining the overall exposure to a client or a group of connected clients in respect of transactions with underlying assets (Official Journal of the European Union, L 324, 7.11.2014, p. 1).
  • Commission Delegated Regulation (EU) 2015/61 of 10 October 2014 to supplement Regulation (EU) No 575/2013 of the European Parliament and the Council with regard to liquidity coverage requirement for Credit Institutions (Official Journal of the European Union, L 11, 17.1.2015, p. 1).
  • Commission Implementing Regulation (EU) 2016/200 of 15 February 2016 laying down implementing technical standards with regard to disclosure of the leverage ratio for institutions, according to Regulation (EU) No 575/2013 of the European Parliament and of the Council (Official Journal of the European Union, L 39, 16.2.2016, p. 5).
  • Commission Implementing Regulation (EU) No 1423/2013 of 20 December 2013 laying down implementing technical standards with regard to disclosure of own funds requirements for institutions according to Regulation (EU) No 575/2013 of the European Parliament and of the Council (Official Journal of the European Union, , L 355, 31.12.2013, p. 60).

4. Communiqué no. 255/19 Periodic information requirements, that repeals the AFA’s technical Communiqué no. 254/18, which established the reporting of periodic information to be sent to the AFA from 30 September 2018. This communiqué incorporates into the Andorran legal framework part of the Commission Implementing Regulation (EU) No 680/2014 of 16 April 2014 laying down implementing technical standards with regard to supervisory reporting of institutions according to Regulation (EU) No 575/2013 of the European Parliament and of the Council.

5. Supervisory Guidance relating to the Internal Capital Self-Assessment Processes (ICAP) and of Liquidity (ILAP) of the Banking Entities (Technical Communiqué no. 263/20-EB)

Section 1 of article 73 of CRD IV, transposed into Andorran legislation in article 15 of Law 35/2018, states that “entities and their consolidable groups must have sound, effective and comprehensive strategies and procedures, to constantly assess and maintain the inflows, types and distribution of internal capital that they consider appropriate for covering the nature and the level of risks to which they are or may be exposed.”.

Likewise, section 1 of article 86 of CRD IV, transposed into Andorran legislation in article 25 of Law 35/2018, states that “entities must have sound strategies, policies, procedures and systems to identify, measure, manage and supervise liquidity risk over an appropriate set of time horizons, including intraday, to ensure that entities maintain an adequate level of liquidity buffers.”.

In this sense, the AFA has published the aforementioned Guide with the purpose of facilitating to banking entities the application of the capital and liquidity self-assessment processes established by the aforementioned articles 15 and 25 of Law 35/2018.