The tasks of the supervisory system are governed by a range of individual laws, such as the Finanzmarktaufsichtsbehördengesetz (FMABG; Financial Market Authority Act), Nationalbankgesetz (NBG; Nationalbank Act), Versicherungsaufsichtsgesetz (VAG; Insurance Supervision Act), Börsegesetz (BörseG; Stock Exchanges Act) and the Kapitalmarktgesetz (KMG; Capital Market Act). In order to carry out these activities, two distinct approaches are required to the supervisory system – referred to as solvency supervision and market and conduct supervision.

• The goal of solvency supervision is to ensure that the banks, insurance undertakings and financial service providers are able to pay out at all times and to meet their contractual obligations. Since it is a feature of a market economy that institutions that are no longer competitive will leave the marketplace, the supervisory system is not able to guarantee that individual institutions may well become insolvent and have to go into liquidation. In such cases, the aim of the supervisory system must be to ensure that in leaving the marketplace, these institutions do not damage the stability of and confidence in the financial market.
• The market and conduct supervision should ensure that business conducted on the markets is fair and transparent, and should monitor compliance with minimum standards in corporate management as well as in the advice and information provided to customers.

Particular importance is also accorded to the statutory tasks of the supervisory system, such as dealing with unauthorised banking, insurance and financial services transactions, and taking preventive measures aimed at fighting money laundering and terrorist financing.

The three core departments of supervision of the Austrian financial market are the Banking Supervision department, the Insurance Supervision department and the Securities Supervision department.

Banking Supervision
The tasks of the Banking Supervision department include in particular the performance of licensing, authorisation and notification procedures, the performance of supervisory procedures, the official supervision of intra-bank models, commissioning the OeNB to carry out on-site inspections, officially monitoring action taken by the credit institution to remedy shortcomings, the interpretation of the law with regard to banking supervision, collecting and analysing qualitative information, evaluating analysis results with respect to official measures and the involvement in legislation related to banking supervision, sending departmental representatives to international bodies, supervising branches and representative offices of foreign credit institutions, as well as cross-border supervision within the scope of the Consolidating Supervision concept.

As the term “banking supervision” implies, the main focus of supervisory activity is on credit institutions. Since the entry into effect of the Zahlungsdienstegesetz (ZaDiG; Payment Services Act), however, the licensing and ongoing monitoring of payment institutions now also falls within the remit of the Banking Supervision department. This is fairly obvious, given the supervisory requirements for payment institutions are heavily based on those for credit institutions, albeit slightly attenuated.

This department consists of the divisions “Consolidating Supervision and Standards”, “Supervision of Large Banks”, “Supervision of Joint Stock and Special-purpose Credit Institutions” and “Supervision of Decentralised Credit Institutions”.

Insurance and Pension Companies Supervision
The department of Insurance and Pension Companies Supervision includes in particular the continued supervision of all business activities of insurance undertakings and Pensionskassen, including on-site inspections, proposals for the continued development of legislation applying to insurance and pension company supervision, sending representatives to international bodies within the scope of this department, as well as licensing issues and legal supervision.
This department consists of the divisions “Pension Companies and Actuarial Issues”, “Prudential Supervision of Insurance Companies”, “Financial Supervision Life Insurance” and “Financial Supervision Non-life Insurance”.

Securities Supervision
The department of Securities Supervision includes in particular monitoring credit institutions to ensure that they meet reporting obligations involving instruments subject to reporting obligations, supervising markets and the stock exchange, supervising issuers, licensing and the continued supervision of investment service providers and collective investment undertakings, investigations in the securities sector and corresponding cooperation with the Austrian Federal Office of Criminal Investigation (BKA), the Federal Police Headquarters of Vienna (BPD Wien), the public prosecutor’s office, the courts and other authorities, ensuring the observance of the rules of conduct and of compliance regulations, making proposals for the continued development of legislation applying to securities supervision, as well as sending representatives to international bodies within the scope of this department.

This department consists of the divisions “Markets and Exchanges Supervision”, “Investment Firms”, “Rules of Conduct and Compliance” and “Prudential Supervision of Collective Investment Undertakings”.

The most important contributions of the FMA to the protection of consumers, investors and creditors are in its work on solvency and in monitoring of compliance with the statutory rules of conduct for banks, insurance undertakings, Pensionskassen and investment service providers, as well as in its standing up for transparency and fairness within the Austrian capital market. Nevertheless, the FMA is not a traditional consumer protection organisation. In order to guarantee it maintains the required equal distance from all market participants that is incumbent on a supervisory authority, the FMA has no legal basis on which it can assist complainants in pursuing claims for compensation in the civil courts.

However, the FMA does take all complaints it receives about market participants seriously – whether from consumers, investors or creditors. Such complaints form an important source of intelligence for its supervisory activities. Therefore, the FMA’s complaints management and consumer hotline teams provide information on the statutory options that are open to complainants. They also ensure that any information relating to relevant undesirable developments or potential breaches of supervisory standards are investigated.

As the legislation does not grant complainants the status of parties in administrative penal proceedings conducted by the FMA, they do not have any right to inspect files. For this reason, the official secrecy imposition on the bodies and employees of the FMA forbids them from providing information on the progress or findings of investigations. Nevertheless, a court may obtain such information by exercising its rights to seek official assistance.