2018 was an intense year for the Andorran financial sector due to the work involved in transposing the “CRD IV Package” which, on the one hand, includes Directive 2013/36/EU on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms (CRD IV) and EU Regulation no. 575/2013 (CRR); and on the other hand, decrees transposing the European Commission’s acts as well as the technical communications from the Andorran supervisory body, the Andorran Financial Authority.
Subsequently, on 28 November 2024, Law 17/2024 amending Law 35/2018 of 20 December on the solvency, liquidity and prudential supervision of banking institutions and investment firms was passed. This completes the incorporation into the Andorran legal system of the latest aspects of the new global framework on the adequacy of banks’ capital (Basel III Accord). By transposing Directive (EU) 2019/878 (CRD V) and Regulation (EU) no. 2019/876 (CRR 2), it incorporates specific aspects of the European regulatory framework such as authorisation and organisation requirements for financial holding companies and mixed companies, and consolidated supervision of banking institutions. It also expands the powers of the Andorran Financial Authority (AFA) to supervise interest rate risk and additional capital and reserve requirements, and updates the rules on large exposures and information transparency.
Within the framework of the regulatory development of Law 35/2018, the following provisions were approved during 2025:
- Decree 90/2025 of 12 March 2025, amending the Regulation implementing Law 35/2018, in compliance with its provisions on solvency, liquidity and prudential supervision of banking entities and investment firms.
- Decree 352/2025 of 8 October 2025, approving the Regulation concerning the adoption of applicable European Union technical standards in the areas of solvency, liquidity and prudential supervision of banking entities and investment firms.