In its “Circular to insurance undertakings concerning credit default swaps (CDSs)”, the Austrian Financial Market Authority (FMA) makes it clear that insurance undertakings are not permitted to issue or sell CDSs: as a financial product, a CDS is not a proper object of the insurance business. The aim of prohibiting what is referred to as “non-insurance business activities” is to prevent insurance undertakings from exposing themselves to risks in sectors outside the insurance business that are not covered by the legal provisions protecting this business, thereby potentially impairing or endangering their business results and thus the interests of the insured parties.
The Circular can be downloaded in full (in German) from the FMA website at https://www.fma.gv.at/en/fma/fma-circulars/
Journalists may address further enquiries to:
Klaus Grubelnik (FMA Media Spokesperson)
+43/(0)1/24959-5106
+43/(0)676/882 49 516