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Licencing & Notification

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If your entity conducts transactions requiring a banking licence as defined in the Banking Act (BWG – Bankwesengesetz), your entity will require a licence issued by the competent supervisory authority. The European Central Bank is competent for the licencing procedure for credit institutions pursuant Article 4 (1) 1 CRR (“CRR-credit institutions” i.e. those credit institutions that accept deposits or other repayable funds from the general public and which grant loans on their own account) with regard to the Common Procedures. (See: ECB Authorisations)

All credit institutions headquartered in Austria that are not directly supervised by the European Central Bank (referred to as “non-CRR credit institutions”) are granted their licence directly by the Financial Market Authority.

The list of banking transactions that require a licence can be found in Article 1 para. 1 BWG.

Credit institutions are authorised to conduct banking transactions. Banking transactions are the activities listed in Article 1 para. 1 BWG, provided that they are performed on a commercial basis. A valid licence is a pre-requisite for the conducting of banking transactions.

The licence for conducting banking transactions may have certain conditions and obligations attached to it, while parts of individual types of banking transactions may be excluded from the scope of the licence. Such restrictions are marked in the licence query. Queries can be made using the following link:

Link to the company database

 

 

Permitted transactions

In addition to the classic deposit-taking business, credit institutions may also conduct exchange bureau business and/or leasing operations without requiring an additional licence. This is stipulated in Article 1 para. 3 BWG (legal licence). Furthermore, credit institutions are also permitted to conduct all other activities pursuant to this legal licence, which are directly connected with banking activities in accordance with the scope of the licence held. This means that these institutions are allowed to perform activities ancillary to the respective banking transaction, in particular brokering of

  • Building savings plans,
  • Undertakings and companies,
  • Investment fund shares, and
  • Equity shares.

The provision of services in the field of automated data processing as well as sale activities relating to credit cards, trading of coins, medals and gold as well as the renting of safety deposit boxes (safes).

Credit institutions are also authorised to carry out the activities listed in Article 3 para. 2 nos. 1 to 3 of the Securities Supervision Act 2007 (WAG 2007 – Wertpapieraufsichtsgesetz 2007) (investment advice, portfolio management, receiving and transmitting of orders in relation to financial instruments) and – in the event that licences are held for specific banking transactions – are authorised to conduct the payment services listed in Article 1 para. 2 of the Payment Services Act (ZaDiG – Zahlungsdienstegesetz (see also Article 1 para. 3 BWG).

In the event that a licence is held in accordance with Article 1 para. 1 nos. 1 and 3, or pursuant to para. 1 no. 2 or no. 6, credit institutions may also issue electronic money in accordance with the Electronic Money Act 2010 (E-GeldG 2010 – E-Geldgesetz 2010).

Since the Single Supervisory Mechanism (SSM) commenced operations on 4 November 2014 the European Central Bank has sole competence for the granting and extension of licences for CRR-credit institutions. In accordance with the internal distribution of competences within the European Central Bank, such procedures are within the scope of competent of DG-MS IV, Authorisations Division (Directorate General, Micro-Prudential Supervision IV).

The European Central Bank shall apply the national legislation (the BWG in Austria) in performing its competence. The lead role in the procedure is split between the national supervisory authorities (in the case of Austria: the Financial Market Authority) and the European Central Bank.

 

For Austrian non-CRR-credit institutions as well as branches of foreign credit institutions competence remains solely with the Financial Market Authority.

This is set out in point a) of Article 4 (1) of the SSM Regulation (SSM-R).


All applications triggering the procedures are submitted to the FMA, regardless of whether the decision is to be taken by the FMA or the ECB.

In the event that the application is for an Austrian non-CRR-credit institution or a branch of a foreign credit institution, then the entire licencing procedure is conducted by the FMA.

In the case that institution making the application fulfils the definition in accordance with the CRR the Financial Market Authority then forwards the applications together with a draft decision and the relevant documentation to the European Central Bank for the decision-making process.

The Financial Market Authority specifically advises in relation to the transmission of data in relation to this procedure about the Data Protection Declaration of the European Central Bank. The applicant for the licence is required to include a signed copy of the Data Protection Declaration of the European Central Bank with the application that initiates the procedure (see also the data protection declaration).

The licence is granted, if:

  • The entity is intended to be operated as a credit institution in the legal form of a joint stock company, a cooperative society or a savings bank;
  • The articles of association do not contain any provisions which would place the safety of the funds entrusted to the credit institution and the orderly execution of transactions pursuant to Article 1 para. 1 BWG in doubt;
  • The initial capital or the initial endowment capital is at least EUR 5 million and is available to the directors without restriction and encumbrance in Austria;
  • The directors are, on the basis of their previous experience are professionally qualified and have the necessary experience required for operating the credit institution.
  • The credit institution has at least two directors and the articles of association rule out individual powers of representation, individual powers of commercial representation and individual commercial powers of attorney for the entire business operation, or, in the case of credit cooperatives, the management of the business is restricted to the directors;
  • None of the directors practices another main profession outside the banking industry or outside of an insurance undertaking or pension companies;
  • The place of incorporation and the head office are located in Austria;

 

The necessary contents for the licence application can be found in Article 4 paras. 3 and 4 BWG. A legal listing of the requirements for granting a licence can be found in Article 5 BWG.

In this instance, the following also applies: In the case that the entities are non-CRR-credit institutions or are branches of a foreign credit institution, then the FMA is the competent authority. The European Central Bank has sole competence for the surrendering of CRR-licences. Applications for the voluntary surrendering of the licence are submitted to the Financial Market Authority, and are then forwarded to the ECB. A licence withdrawal may occur either at the initiative of the European Central Bank or the Financial Market Authority.
A licence that has been granted may be subsequently revoked pursuant to Article 6 para. 1 BWG, if the business activities for which the licence was applied for, are not commenced within twelve months of the licence being granted or is no longer conducted for longer than six months. In this case, the revoking of the licence lies within the competence of the competent supervisory authority. However, no such discretionary powers exist for the cases listed below. The competent supervisory authority must consequently revoke a licence pursuant to Article 6 para. 2 BWG, if for example the licence was:

  • obtained as a result of incorrect information having been submitted,
  • if certain prudential requirements have not been fulfilled,
  • If obligations towards creditors have not been fulfilled
  • or if bankruptcy proceedings have been initiated against the assets of the credit institutions.

This is set out in European law in Article 18 SSM-R.

A licence lapses “automatically”, if it is voluntarily surrendered by the credit institution. In this case the credit institution is required to also submit a confirmation by the bank auditor, that all transactions have been settled. The licence lapses if as a result or a merger or a demerger double or multiple licences would exist as a consequence.

The link below describes how, and in what form, banks that have the necessary permission in their Member State may also operate in the European Economic Area (“European Passporting”). The relevant legal basis is also listed on this page.
Freedom to provide services and freedom of establishment in the EEA

The licence for conducting banking transactions may have certain conditions and obligations attached to it, while parts of individual types of banking transactions may be excluded from the scope of the licence. Such restrictions are marked in the licence query. Queries can be made using the following link:

Link to the company database

All institutions which are authorised to conduct banking transactions in Austria can be found in the queries and downloads below:

Licensed credit institutions in Austria

Investment Fund Management Companies

Real Estate Investment Fund Management Companies

Representative Offices of Foreign Credit Institutions

Severance and Retirement Funds licensed in Austria

 

Further information