ANDORRA Law and Practice Contributed by: Albert Hinojosa and Marc Ambrós, Cases Lacambra
ments applicable to collective investment schemes are provided for in: • Act 7/2013, of 9 May 2013, on the regime for oper - ating entities in the Andorran financial system and other provisions that govern the financial activities in the Principality of Andorra; • Act 8/2013, of 9 May 2013, which covers the organisational requirements and operating con - ditions of the operating entities in the Andorran financial system, investor protection, market abuse and financial securities agreements; and • Act 10/2008, of 12 June 2008, governing the col - lective investment undertakings of Andorra. In synthesis: • the governing body shall adopt the form of a board of directors, composed of at least three directors; • members of the board of directors shall be per - sons of recognised commercial and professional honourability and must possess adequate knowl - edge and professional experience to exercise their duties; • the elected chairperson cannot hold the position of general manager; • the board of directors shall draft and approve a set of internal operating rules to comply with legal obligations and promote responsibility among all members; and • both the management company ( societat gestora ) and custodian entity ( entitat dipositària ) must com - ply with local rules on the conduct of business. 5.6 Annual Entity Maintenance and Accounting Compliance Costs associated with maintenance and accounting compliance may vary notably depending on the par - ticulars of each entity, business decisions adopted by the governing body, and whether or not it is a regu - lated entity. In a non-exhaustive manner, costs may be determined as follows. • Limited liability companies ( societat limitada ) and public limited companies ( societat anònima ) are legally obliged to draw up financial statements yearly, submit them to external audit (in certain cases, depending on the business volume and/
or number of employees) and deposit financial statements to the Companies Register ( Registre de Societats ). Moreover, the yearly maintenance fee for registering limited liability companies ( societat limitada ) and public limited companies ( societat anònima ) with the Companies Register amounts to EUR851 and EUR935.50, respectively. • SICAV and real estate funds – due to their condi - tion as regulated entities, the costs associated with maintenance and accounting are generally higher. Specifically, Andorran management com - panies ( societats gestores ) of collective investment schemes are subject to a yearly fee of EUR3,000 in the concept of supervision payable to the AFA. This fee increases by EUR2,000 if the specific management company carries out the discretional and individualised management of investment portfolios. The collective investment scheme is subject to the same fee, ranging from EUR1,800 to EUR3,300, depending on the type of vehicle. Collective investment schemes must comply with accounting requirements stated in Act 10/2008 governing the Andorran collective investment undertakings ( Llei de regulació dels organismes d’inversió col·lectiva de dret andorrà ), which essen - tially are: (a) confidential financial statements (to be issued quarterly); (b) public financial statements (yearly as a mini - mum and subject to audit); and (c) external audit process (permanent; it cannot be the same auditor for a period exceeding five years; such audit entity must be the same as the management’s company auditor). Moreover, distribution, management, subscription and reimbursement fees (for the management com - pany) and depositary fees must also be considered and costs arising from the publication of the collective investment scheme prospectus (simplified and com - plete form).
23 CHAMBERS.COM
Powered by FlippingBook