FMA Minimum Standards

1. The ECB Guide to the internal capital adequacy assessment process (ICAAP), hereafter referred to as the “ECB ICAAP Guide”, entered into force on 01.01.2019. The ECB ICAAP Guide’s addressees are the significant institutions as defined in Article 6 (4) of Regulation (EU) No 1024/2013 (the SSM Regulation (SSM-R)) that are directly supervised by the ECB. Considering the convergence of supervisory standards in the SSM, the FMA was expected to draw up analogous requirements for less significant institutions (LSI) within the scope of indirect supervision by the ECB. Therefore, from the FMA’s perspective there was initially a temporary option for the continued used of the Going Concern and Gone Concern perspectives in implementing the ICAAP, while the further development of the internal capital assessment in line with ECB’s new concept was also possible in terms of methodological freedom, and its content welcomed.
2. The ECB has not extended the ECB ICAAP Guide’s scope of application to also cover LSIs. Taking into account regulatory developments as well as for the purpose of achieving a constant application, the FMA considers the further development of the ICAAP as also being necessary for the institutions that it supervises.
3. These Minimum Standards are to be read as supplementing the ECB ICAAP Guide, and they further specify the proportional application of the principles defined in the ECB ICAAP Guide for the institutions that are supervised by the FMA.
4. It is the institutions’ duty to apply a solid, effective and comprehensive ICAAP for ensuring an adequate capital base, in accordance with the nature, scope and complexity of the banking transactions that it conducts.
5. In this regard, the ECB ICAAP Guide introduces two different but complementary perspectives in the form of the normative and economic perspectives. Against such a further methodological development, the application of the normative and economic perspectives for guaranteeing a solid, effective and comprehensive ICAAP is also expected from the institutions that are addressed by these minimum standards.
6. The application of the economic and normative perspectives in the ICAAP of the institutions addressed by these minimum standards is considered appropriate for the following reasons:

• Implementation of the normative perspective increases the significance of capital planning as well as a future-oriented perspective, and thereby leads to a stronger intertwining with the management of the bank.
• The normative perspective permits an estimation of regulatory and supervisory capital requirements in both the base and adverse scenarios based on a multi-year view.
• Institution-specific specificities are displayed better by scenario-based approaches and synergies exist with the scenario-based institution-wide stress test to be conducted.
• Its application leads to a harmonisation of prudential requirements for Austrian institutions, especially if an institution changes from SI to LSI status and vice versa.

7. The minimum standards’ structure is based on the ECB ICAAP Guide’s structure, with Chapter 2 containing remarks about the principles subsequently numbered 1 to 7. The stated examples have been highlighted in a box and are of an illustrative nature, but are not intended to restrict the institution-specific and proportional design of the ICAAP.
8. These Minimum Standards do not constitute a Regulation. They serve as guidance and reflect the FMA's legal interpretation and the FMA's practical recommendations for conduct. No rights and obligations extending over and above the provisions of the law can be derived from Minimum Standards. The FMA reviews on a case-by-case basis whether failure to observe recommendations issued in Minimum Standards has also led to legal provisions also being breached, especially Article 39a Austrian Banking Act (hereinafter: “BWG”).
9. Institutions are expected to fully consider these minimum standards at the earliest possible opportunity, but at latest by 31.12.2026.

01/2023 FMA Minimum Standards for the Risk Management and Granting of Foreign Currency Loans and Loans with Repayment Vehicles - Revised Version - August 2023

These FMA Minimum Standards constitute a revised version of the FMA Minimum Standards for the Risk Management and Granting of Foreign Currency Loans and Loans with Repayment Vehicles (FMA-FXTT-MS) dated 28.04.2017 and replaced them from 03.08.2023.

Applicable from 01.07.2022.

Minimum Standards of August 2014: In accordance with Article 20 para. 1 Pensionskassen Act (PKG; Pensionskassengesetz), Pensionskassen are required to prepare a business plan. This business plan, and any changes made to it, must be reviewed and confirmed by the auditing actuary and approved by the FMA pursuant to Article 20 para. 4 PKG. These FMA Minimum Standards set out the current formal requirements in relation to the submission and structure of a business plan.