AUSTRIA Law and Practice

6. Fund Administrators

6.1 Regulation of Fund Administrators

Fund administrators are regulated by the Alternative Investment Fund Manager Act (Alternative Investmentfonds Manager-Gesetz – AIFMG) depending on the specific activity.

6.2 Contractual Terms

Fund advisers can contractually adjust the provisions that apply under the specific legislation for fund administrators and general civil law to the extent permitted by law in order to achieve a higher level of protection, although the specific results can vary greatly in individual cases.

7. Marketplaces, Exchanges and Trading Platforms

7.1 Permissible Trading Platforms

The permissible forms are derived from the legal environment, whereby basically any type of fintech is available. The legal environment for trading platforms is largely defined by the Banking Act (BWG) and Securities Supervision Act 2018 (WAG 2018). The relevant legal regulations are therefore dependent on the specific service offered. After its entry into force on 23 March 2023, the DLT pilot regime should test the development of the European infrastructure for trading, clearing and settlement of DLT-based financial instruments. Irrespective of this, general provisions under civil law, public law and criminal law must always be taken into account.

7.2 Regulation of Different Asset Classes

Different regulatory framework conditions only exist as far as the regulatory requirements applicable to all are applied in different forms.

7.3 Impact of the Emergence of Cryptocurrency Exchanges

So far, cryptocurrencies have not yet led to a significant change in regulation. To date, regulators have instead attempted to integrate this new technology into the existing legal framework.

7.4 Listing Standards

Cryptocurrencies are not subject to the control of the FMA. However, this supervisory authority can become relevant if individual services fall within a regulated area.

7.5 Order-Handling Rules

The Securities Supervision Act 2018 (WAG 2018) is particularly relevant in connection with order handling. The forwarding of orders to banks, brokers or issuers falls within the scope of the acceptance and transmission of orders under the WAG 2018.

7.6 Rise of Peer-to-Peer Trading Platforms

The emergence of peer-to-peer trading platforms is changing market conditions for both traditional and fintech players. However, peer-topeer trading platforms also have to observe all regulatory framework conditions, if applicable.

7.7 Issues Relating to Best Execution of Customer Trades

According to the FMA, the Securities Supervision Act (WAG 2018) is applicable at least in some areas. The authority assumes that investment advice in accordance with WAG 2018 is applicable for investment strategies tailored to the customer with entry and exit scenarios. The principle of “best execution” also applies to WAG 2018. In particular, claims for damages by the customer can be derived from this principle in the event of a violation.