Law No. 8/2013 (MiFID)

Law 8/2013, of 9 May, on the organisational requirements and functioning conditions of operating entities of the financial system, investor protection, market abuse and financial guarantee agreements.

This Law, which amends the previous Law 14/2010, establishes the principles laid down in the Community Directive known as MiFID (Markets in Financial Instruments Directive), reinforces the provisions relating to investor protection set out in the legislation in force hitherto and adds new obligations on the use of insider information and market manipulation.

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What are the objectives of this new law?

  • To protect the investor’s interests.
  • To ensure that the investor is aware of the products and services purchased as well as of the related risks.
  • To encourage transparency and efficiency.

What are complex and non-complex products?

The law classifies banking products into both complex and non-complex products.

Complex products are products which, due to their characteristics, are exposed to several risk factors (liquidity, volatility, exchange rates, etc.) and require a certain level of knowledge and experience to understand them. The following products qualify as complex products:

  • Preference shares, convertible bonds, perpetual bonds, etc.
  • Free investment funds (hedge funds).
  • Derivatives (futures, options, warrants, caps, floors, foreign currency hedges, etc.).
  • Structured products (both in-house and external).

Non-complex products are products which have a low level of complexity and risk, such as shares listed on a regulated market, money market instruments, etc.

Classification of clients according to the MiFID law

What will Crèdit Andorrà do to ensure that its products and services are marketed properly?

The following tests are completed depending on the type of product and service:

Suitability test

When providing discretionary portfolio management or advisory services, a test will be completed to determine the investment risk profile of each client, their financial knowledge and experience, their financial situation and capacity, and the investment objectives pursued.

Appropriateness test

When selling certain complex products, a test will be carried out to ensure that the product is appropriate for the client. This test will identify the client’s knowledge and experience in relation to the product applied for.

Advisory service contract

For clients who wish to benefit from advice relating to product recommendations.

What are the most important policies and procedures maintained by Crèdit Andorrà in relation to the provision of investment services?

Order execution policy (27.11.14)

In order to achieve the best possible results, we are committed to carrying out reasonable measures in relation to our client’s transactions based on price, costs, speed and likelihood of execution and settlement, the volume and nature of the order and any other aspect deemed relevant to its execution.

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Wealth protection policy (18.02.15)

We are committed to carrying out appropriate measures to protect our client’s proprietary rights to the financial instruments and funds entrusted to us.

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Conflict of interest policy

We take appropriate measures and maintain procedures to prevent and deal with identified situations which may give rise to a conflict of interest between clients and Crèdit Andorrà or between Crèdit Andorrà’ clients.

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