4. Supervision

Contributed by: Markus Fellner, Elisabeth Fischer-Schwarz, Mario Burger and Florian Henöckl, Fellner Wratzfeld & Partners

•the participations with a group of companies as well as other possible ways to exercise influence; •the relevant business relationships, family ties or other relevant relationships, as well as acquisition interests; •the financial situation and credit standing of the acquirer; •the funding of the intended acquisition, including disclosure of all relevant agreements; and •the business plan, including a description of strategic objectives and plans if the acquirer gains control.

If the bank is listed on the Austrian stock exchange, an acquirer must also comply with the provisions of the BörseG and the Takeover Act (eg, filing and notification obligations, mandatory takeover bid, etc).

Similar requirements must be fulfilled if the proposed acquirer intends to acquire a qualified holding in an insurance company, an investment firm, an investment service provider or a payment institution.

4.1 Corporate Governance Requirements

The FMA has published a detailed set of guidelines and circular letters (FMA Rundschreiben) on the application and scope of the organisational regulations, which depend on the type of business activities envisaged by the entity. An institution has to implement and continuously monitor a comprehensive set of organisational requirements, such as organisational structure, clear decision-making processes, documentation and reporting obligations, and responsibilities. Furthermore, the management shall define and oversee the internal principles of proper business management (“fit and proper”), guaranteeing the requisite level of care when managing the institution, and focus particularly on the segregation of duties in the organisation and the prevention of conflicts of interest and, therefore, establish mechanisms to safeguard the security and confidentiality of information, pursuant to Section 38 of the BWG.

4.2 Registration and Oversight of Senior Management

Banks are required to ensure the suitability of their managing directors, supervisory board members and holders of key functions on an ongoing basis. In addition to an internal guideline for the assessment process, banks are also required to provide ongoing training for their governing bodies and employees.

Sections 5 (1) (6)-(13), 28a and 30 (7a) of the BWG contain requirements for the members of the management and the supervisory board of credit institutions.

Fit and Proper Hearings The FMA and the ECB apply an increasingly strict assessment procedure when evaluating the professional suitability of functionaries. Newly appointed governing bodies are invited to a hearing, and the theoretical knowledge required for the respective company is tested in an oral examination. The material covered for credit institutions includes financial expertise, the BWG and related ordinances, applicable special laws and European supervisory laws (CRR, EBA Regulatory Technical Standards, EBA Guidelines, etc) as well as the contents of the FMA Minimum Standards and FMA circulars. Basic knowledge of corporate law and knowledge of