AUSTRIA Law and Practice

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

In addition, public offers of securities or investments might trigger a prospectus requirement pursuant to Regulation (EU) 2017/1129 (the “Prospectus Regulation”) or the Capital Markets Act 2019 (KMG 2019).

This is especially important in the crypto sector. Here, initial coin offerings or initial token offerings can trigger a prospectus requirement. This, however, depends on the features of the coin or token and requires careful examination of the case at hand.

The newly proposed MiCA aims at covering issuers of crypto-assets, and so-called “stablecoins”, as well as the trading venues and the wallets where crypto-assets are held. This regulatory framework should protect investors and preserve financial stability, while allowing innovation and fostering the attractiveness of the crypto-asset sector. The legislative change should provide greater clarity across the European Union, as some member states already have national legislation for crypto-assets, but so far there had been no specific regulatory framework at EU level. Once in force, crypto-asset service providers will have to respect strong requirements to protect consumers’ wallets and will be liable if they lose investors’ crypto-assets. MiCA will also cover any type of market abuse related to any type of transaction or service, notably for market manipulation and insider dealing.

2.3 Compensation Models

Special compensation models to charge customers do not exist under Austrian law. One possibility is to charge fees for the services provided.

2.4 Variations Between the Regulation of Fintech and Legacy Players

Currently, there are no regulations that are specifically tailored to the fintech industry. As a result, the fintech sector often applies laws and standards that were tailored to the non-digitised “old” economy.

However, there are efforts by EU as well as Austrian legislators to change this. In this context it is worth mentioning the Crowdfunding Enforcement Act, which entered into force at the beginning of 2022 and serves to make the EU Crowdfunding Regulation applicable with an EU-wide harmonised legal framework for the provision of crowdfunding services. With MiCA, DORA and the DLT pilot framework, the situation is likely to change significantly.

2.5 Regulatory Sandbox

Based on the amendment of the Financial Market Authority Act (FMaG 2016), the FMA opened a regulatory sandbox programme for fintech models in September 2020. It aims to pave the way into supervision for young fintech firms or their co-operation with incumbents regarding fintech business models.

The process can be divided into four phases.

The first phase clarifies whether the business model to be examined by the FMA is subject to its supervision. It considers whether a threat to financial market stability or consumer protection is to be expected, or whether a licensing obligation exists.

The next phase is the pre-support phase. Here, the FMA works closely with the sandbox participants and offers legal support in the context of a possible licensing procedure.