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Whistleblower-System

Co-operation with State Commissioners

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The state commissioners system is an integral component of banking supervision in Austria. In the case of credit institutions with total assets exceeding Euro 1 billion as well as all savings banks and certain special credit institutions ( such as investment fund management companies) a state commissioner and deputy are appointed by the Federal Minister of Finance for the effective conduct of supervisory activities (cf. Article 76 para. 1 of the Austrian Banking Act (BWG; Bankwesengesetz)).

The role of the state commissioner

Pursuant to Article 76 para. 4 BWG, the state commissioner and deputy state commissioner are required to be invited by the credit institution to the general meetings, general assemblies, to the meetings of the supervisory board, of the audit committees and of executive committees of the supervisory board. The role of the state commissioner is intended in particular to report to the FMA on issues of relevance to supervision in the meetings of the supervisory board and its committees, to point out generally hazardous circumstances within in an institution promptly, and in any case to raise objections to decisions by resolution taken by the supervisory board or its respective committees, where they breach supervisory law. Such objections postpone the effectiveness of the resolution until a decision is issued by the FMA as the supervisory authority. The state commissioner is not a body of the credit institution, and is not allowed to interfere in its operative and strategic operation.

Bodies of the FMA

The state commissioner and deputy act pursuant to Article 76 para. 1 BWG as bodies of the FMA. In these functions they are subject solely to the instructions issued by the FMA, and shall submit all information that is essential for conducting its supervisory tasks. Information, which relates to significant institutions as defined in the SSM Regulation (SSM-R), are passed onto the European Central Bank (ECB) by the FMA within the auspices of the respective Joint Supervisory Team.

Guidelines on the Activities of State Commissioners

For standardisation purposes and in order to increase the level of transparency of the cooperation between the FMA and the state commissioners in March 2016 the FMA revised its internal guidelines “Richtlinie für die Tätigkeit der Staatskommissäre (Stellvertreter) bei Kreditinstituten” (“Guidelines on the Activities of (Deputy) State Commissioners in Credit Institutions”).

The aim of the guidelines include providing general information to state commissioners and their deputies about their specific responsibilities, i.e. their rights and obligations. The guidelines also contain standards about the necessary legal and financial knowledge required for the activities of a state commissioner.

State commissioners are individually responsible for the acquisition and subsequent further development of the necessary legal and financial knowledge. To this end they are supported by relevant training programs offered by the Federal Ministry of Finance and the FMA.

Exchange of information

Ultimately the guidelines determine the basic principles and minimum content for the exchange of information between the FMA and the state commissioners.

According the FMA informs the state commissioners about all significant supervisory activities regarding the credit institution in question, such as changes to the scope of the licence held, administrative decisions in relation to authorisations and decisions imposing measures, as well as the issuing of manadates for on-site inspections to the Oesterreichische Nationalbank and the resulting findings (inspection report).

By contrast, the state commissioners submit reports to the FMA on a regular basis about their activity, in particular in the form or quarterly reports and an annual report about their activities. Furthermore, the state commissioners are in particular expected to report about the principles and application of standards on internal governance (which is a component of the SREP). In addition, the state commissioner also informs the FMA on an ad-hoc basis about objections raised against resolutions taken by the credit institution pursuant to Article 76 para. 5 BWG and circumstances pursuant to Article 76 para. 8 BWG (prevailing circumstances which mean that the credit institution is unable to fulfil its obligations towards its creditors, and in particular where the security of the assets entrusted to the credit institution is no longer guaranteed).

The close co-operation between the FMA and the state commissioners allows a greater degree of preventative official action, which allows a clear enhancement of the effectiveness and efficiency of the effect of supervision.