Sprache umschalten / Switch language
Whistleblower-System

FMA On-Site Inspection Strategy 2019: 261 measures planned, priority on Sustainable Business Models, Information Requirements, IT Risk and the Prevention of Money Laundering

Release Date: |
Categories:

The sustainability of business models during the economic upturn, concurrent preparations for an expected change in interest rate policy in the Euro area and the plateauing of the economy, information requirements towards borrowers and investors, as well as IT Security and cross-border prevention of money laundering will form the focus of the Austrian Financial Market Authority’s (FMA) on-site inspection activities in 2019. In total the FMA is planning to conduct 261 on-site measures in the 869 supervised entities. This number does not take into account inspections that may be conducted on an ad hoc basis if required. The FMA’s on-site inspection strategy is based on its priorities for supervision for 2019, which it published a few weeks ago.

Sustainable Business Models and Governance

Recent years have been characterised by an economic upturn and a substantial increase in property prices. In order to continue to be able to ensure sustainable financing in this environment, the reviewing of standards for the granting of credit agreements relating to residential immovable property is prioritised. In the case of the granting of credit in 2019, in addition to the supply side, the demand side – i.e. borrowers – will also be focused on. The FMA will review whether potential and existing customers are being informed by their bank in an adequate manner and in a non-misleading manner about the conditions and risks involved in a credit financing. In addition to credit agreements relating to residential immovable property, consumer loans will also in particular be focused upon.

The basis for sustainable business models is good governance in entities – i.e. processes and procedures, which in good times prevent the taking of excessive risks, in order to be able to better withstand the expected phases of the downturn. Therefore a priority for inspections is therefore being set on the risk management of banks, insurance companies and asset managers in 2019.

Collective Consumer Protection

Customer information, whether for the financing of credits, or in the area of investment products, forms a substantial part of collective consumer protection. For the FMA, the past year was spent implementing the comprehensive package regarding information requirements, consisting of the European MiFID II financial markets Directive, the Insurance Distribution Directive (IDD) and the PRIIPs Regulation on key information documents for packaged retail and insurance-based products. In 2019 the FMA will now increasingly check the specific compliance by supervised entities with such information requirements.

Digitalisation

IT Security is another multi-year priority for supervision that has become part of the inspection strategy for 2019. During 2018, the FMA rolled out a series of five Guides for harmonised supervisory standards for IT Security for the entire Austrian financial market. In 2019 the FMA will shift from theory to practice and conduct on-site inspections, whether the standards set out in the Guides are also implemented in supervised entities.

A further focus will lie on digital business models. The FMA will therefore inspect Robo-Advice-systems, whether they comply to the same extent as personal investment advice with the conduct provisions that apply for the distribution of securities. The underlying principle of technological neutrality is central to this priority for inspection – comparable business models must comply with the comparable requirements, irrespective of the the technology used.

Comprehensive risk monitoring – prevention of money laundering and terrorist financing

Inspections in the field of the prevention of money laundering and terrorist financing will continue to also be a priority in 2019. The FMA will continue to further extend its pioneering role throughout Europe in the supervision of internationally active entities, and in 2019 there will be a priority on inspections regarding the overall examination of groups of institutions.

The FMA’s priorities for supervision and inspections for 2019 can be found at:

https://www.fma.gv.at/en/fma-publishes-its-priorities-for-supervision-and-inspections-for-2019-and-presents-its-publication-facts-and-figures-trends-and-strategies-2019/

Journalists may address further enquiries to:

Mr. Stefan Maier

+43/(0)1/24959-6001

+43/(0)676/882 49 426

 

 

 

Next news entry: »