AUSTRIA Law and Practice

Contributed by: Markus Fellner, Florian Kranebitter and Florian Henöckl, Fellner Wratzfeld & Partners

• often, but not necessarily, are developed by unlicensed companies;

• typically include interfaces to licensed companies; and

• can bring about lasting changes in the way the financial sector functions.

From a new payment app to automated consulting systems, the term is broad and encompasses a variety of different models that affect numerous supervisory areas.

In Austria, fintech companies operate in all various subsectors, such as alternative lending platforms, automated banking advice tools, insurtechs, digital payment operators, crowd investing platforms, online pre-paid payment providers, robo-advice and alternative platforms for investment strategies, traders for cryptoassets, and technical service providers for fintechs.

The Austrian fintech industry is most active in providing interfaces and technical support for financial service providers, followed by the business areas of crowdfunding and crowd investing, virtual currencies and alternative payment methods, automated advisory methods such as robo-advisers and, finally yet importantly, mirror trading. “Virtual currency” and – associated with this – blockchain software are becoming increasingly important. However, the payment sector remains the most important fintech sector.

2.2 Regulatory Regime

Due to the fact that there are no fintech-specific laws in Austria, fintech companies may be subject to various regulatory licensing requirements depending on their particular business model:

• the Banking Act (BWG) – for example, if a business involves activities such as accepting third-party funds for management or granting loans;

• the Payment Services Act 2018 (ZaDiG 2018) – for example, when money is transferred to third parties, an account information or payment initiation service is involved;

• the Electronic Money Act 2010 (E-GeldG 2010) – if the company issues electronic money;

• the Securities Supervision Act 2018 (WAG 2018) – if the company provides investment advice or portfolio management, receives or transmits orders or operates a multilateral trading facility (MTF);

• the Act on Alternative Investment Fund Managers (AIFMG 2020) – if the start-up collects investors’ capital to invest in certain assets, including virtual currencies, based on a predefined investment strategy;

• the Insurance Supervision Act 2016 (VAG 2016) – if the company offers insurance contracts;

• the Financial Markets Anti-Money Laundering Act (FM-GwG 2016) regarding certain virtual asset service providers;

• the Markets in Crypto-Assets Regulation (MiCA), which will finally give the market for digital financial products and assets a regulatory framework;

• the Digital Operational Resilience Act (DORA), which aims to safeguard digital operational stability in Europe and ensure sound and adequate cybersecurity in the financial sector; and

• the DLT-pilot-framework, which is primarily aimed at investment firms, market operators and central securities depositories and is intended to pave the way for decentralised capital market infrastructures.