AUSTRIA Law and Practice

7.8 Rules of Payment for Order Flow

The business model “payment for order flow” is currently under investigation by the European Parliament. It is assumed that conflicts of interest may arise. It is currently being checked whether there is compliance with the existing legal framework specified by the European Parliament. There is no regulation tailored to this area yet.

7.9 Market Integrity Principles

The basic principles of market integrity and market abuse are essentially derived from the regulatory environment and any civil law claims, in particular claims for damages.

8. High-Frequency and Algorithmic Trading

8.1 Creation and Usage Regulations

Within the scope of the Banking Act (BWG), it is irrelevant whether trading is based on an algorithm or not. In principle, the use of a trading algorithm does not require a licence. However, the bank or broker must have a licence. Depending on the specific structure of the service relationship, other provisions of the Securities Supervision Act (WAG 2018) may also be applicable.

8.2 Requirement to Register as Market Makers When Functioning in a Principal Capacity

When functioning in a principal capacity, the players have to observe the provisions of the Stock Exchange Act (BörseG) and the Transparency Ordinance 2018 (Transparenz-Verordnung 2018).

8.3 Regulatory Distinction Between Funds and Dealers

Funds and dealers have a different structure and are therefore covered by regulatory provisions to varying degrees.

8.4 Regulation of Programmers and Programming

Programmers are not regulated, apart from general restrictions (civil law, public law and criminal law). The prerequisite for this, however, is that the algorithms are only used by the users themselves.

9. Financial Research Platforms

9.1 Registration

Financial research platforms are not subject to restrictions.

9.2 Regulation of Unverified Information

The spreading of rumours and other unverified information is not regulated. Such information can only be relevant in relation to a possible claim for damages, if the action is culpable; criminal law provisions can also be relevant if damage is intended by the actor.

9.3 Conversation Curation

Unacceptable behaviour on research platforms (eg, spreading inside information) can, as mentioned under 9.2 Regulation of Unverified Information, only be relevant in relation to a possible claim for damages, if the action is culpable; criminal law provisions can also be relevant if damage is intended by the actor.