Supervisory Disclosure

The following section contains all FMA publications about the methodologies of the Supervisory Review Process.

The target of supervisory disclosure is to facilitate a uniform standard of transparency and responsibility of supervisory authorities. Publicised information should be easily accessible and comparable. The FMA’s disclosure obligations are defined in Article 69b of the Austrian Banking Act (BWG; Bankwesengesetz).

In order to comply with these requirements, the FMA hereby discloses information regarding the following thematic areas:

Phase – Categorisation of risks

For the categorisation of risks and impacts, both the information submitted both as part of regular reporting requirements, as well as additional national reporting requirements under the regulation on reporting by Pensionskassen, are taken into account. These reports are, among other things, used to generate risk and early warning indicators. The results of stress tests, time series analyses, comparisons between undertakings or relevant peer groups and other issue-related analyses are also considered in assessments. Moreover, for example, analyses for the market environment as well as the market conditions for individual undertakings are also taken into consideration. For the classification of the respective undertaking all of this data – which is assessed in a largely standardised manner at first – is complemented with additional qualitative observations (e.g. from a regular dialogue with representatives from the undertaking).

Within the risk classification, the FMA identifies and assesses the ability of the undertaking to be able to react appropriately to or withstand current or potential future risks. The risk profile is compared against the respective risk bearing capacity. In the case of impact classification, the impact of default on both the beneficiaries and the market are assessed. The size of the undertaking among other factors determines the impact classification. Such risk and impact classifications are transposed into four risk and impact classifications – ranging from “low” to “very high”. The intensity of supervision for the coming year is defined in this way. The supervisory plan, determining the frequency and the intensity of the supervisory activities for every undertaking, based on the assignment of undertakings to respective supervisory levels, is determined on a risk-based approach. The frequency and intensity of the activities conducted by the supervisory activities for every undertaking are determined in the supervisory plan.

Phase – Detailed review

Detailed reviews take place on the basis of the supervision plan in the form of location-independent analyses and on-site inspections . The FMA has published its planned thematic priorities for inspections for the year ahead since the package of measures in relation to the “Supervisory Reform 2017” entered into force.

Phase – Supervisory measures

Weaknesses, as well as existing or potential deficiencies, or infringements against requirements may lead to supervisory measures being set. The initiation of such measures is commensurate to the detected deficiencies. A review of the implementation of measures in the undertaking is conducted by the FMA and the supervision plan is updated in accordance with the effectiveness of the activities conducted in the undertaking concerned.

The principal objective of supervision is monitoring that the provisions of the BWG and BMSVG are duly complied with, and must consider the economic interest in a functioning banking system and financial market stability.

The FMA monitors all business performed by corporate provision companies within the scope of their granted licence. The FMA’s supervisory activities must be both risk-based and forward looking.

The supervision of corporate provision companies involves the performance of official duties and powers defined in the Act on Severance and Retirement Funds for Salaried Employees and Self-Employed Persons (BMSVG) and the Austrian Banking Act (BWG; Bankwesengesetz) that have been conferred on the FMA.

Details about supervisory activities may in particular be found in the FMA’s Annual Reports as well as the FMA’s Priorities for Supervision and Inspections.