As an integrated supervisory authority established in 2002, the Austrian Financial Market Authority brings together the supervision of all significant providers and functions under a single roof.
The Financial Market Authority supervises:
- banks,
- insurance undertakings,
- Pensionskassen (pension companies),
- corporate provision funds,
- investment firms and investment service providers,
- investment funds,
- financial conglomerates and
- stock exchange companies.
In addition, it monitors that
- legal requirements, fairness and transparency are complied with regarding the trading of stock exchange-listed securities (markets and stock exchange supervision);
- comprehensive prospectuses for public offerings of security adequately present the opportunities and risks associated with any investment (capital market prospectuses supervision);
- the principles of good governance as well as orderly investment advice are observed (compliance and conduct supervision);
- the unauthorised offering and provision of financial services are duly prohibited and sanctions imposed;
- all financial institutions have the necessary systems in place for the prevention of money laundering and terrorist financing.
Last, but not least, the FMA is also the national resolution authority for the banking sector.
In 2023, the FMA supervised:
- 473 banks (excluding EEA branches and payment institutions)
- 8 corporate provision funds
- 74 insurance undertakings
- 8 Pensionskassen (pension companies)
- 62 investment firms and 45 investment services providers
- 11,229 foreign funds, which are marketed in Austria
- 2,074 Austrian investment funds managed by 14 investment fund management companies, 4 companies exclusively licensed as AIFMs , as well as 38 registered AIFMs
- 5 real estate investment fund management companies (at the same time AIFMs )
- 110 issuers with 25,947 listed securities as well as 57 million notified transactions
“One-Stop-Shopping”
As an integrated supervisory authority, the Financial Market Authority enables “One-Stop-Shopping”, allowing all official procedures to be handled under a single roof roof. As an authority the Financial Market Authority has sovereignty: It is able to issue binding standards, like regulations and administrative decisions, to take coercive measures, such as withdrawing licences, to remove directors or to impose administrative penalties (in the case of natural persons of up to Euro 5 million, in the case of legal persons up to Euro 10 million or up to 15% of total net turnover (in the event that such an amount is greater than Euro 10 million)). It accompanies supervised entities across their entire lifecycle: from granting a licence, which authorises them to commence business operations, followed by ongoing supervision throughout their business activities, through to their liquidation, removal or surrendering of their licence.
The advantages of integrated supervision
There are convincing advantages for integrated supervision – it is the structure of the future for the Austrian financial market.
- An integrated supervisory authority is faced with a strongly interlinked financial market in Austria
- Cross-sector microprudential and macroprudential supervision allow a consistent approach to risk analysis backed up by effective measures
- The integrated approach also permits a coordinated approach in shaping European and international supervisory law
- Conduct supervision and prudential supervision under a single roof are the keystone for effective supervision and the consideration of all causal links.
A detailed statement on integrated supervision in Austria can be downloaded here:
Integrated Supervision in Austria (Format: pdf, Size: 470,6 KB, Language: English)
The hierarchy of supervision
Every efficient and effective supervisory authority builds upon the work of upstream supervisory authorities. This is known as “the hierarchy of supervision”. The internal audit division of a financial institution is the first level of monitoring and control, the supervisory board and the auditors are the second level, which although appointed by the entity are filled with independent external experts. The governmental supervisory authority only emerges as the third level.
In Austria, the supervision of the financial markets is performed by three institutions. In general terms:
- it develops and defines the legal framework conditions together with the Federal Ministry of Finance (BMF), which are then passed through the Austrian parliament (legislation);
- the Oesterreichische Nationalbank (OeNB) monitors the stability of the financial market as a whole (macro supervision), and is responsible for the supervision of payment and settlement systems, as well as being involved in banking supervision and
- the Financial Market Authority (FMA ) monitors and controls the individual financial institutions and players (micro supervision).
All three institutions cooperate closely in an integrated way with one another and collectively form the Austrian system for the supervision of the financial market.
International cooperation
The FMA works in many international, particularly European, committees to draw up common supervisory standards and in so doing to represent the interests of Austria as a financial marketplace. In light of the globalisation of the financial economy, the intensification of international cooperation within operative supervision is becoming increasingly significant.