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FinTechs belonging to this category offer asset and portfolio management services via an internet platform or software programs and usually manage and dispose of the assets of their customers long or short term according to their specifications without actually holding the property or the possession of those assets. FinTechs, which provide information about and access to overnight or time deposit accounts at national and foreign banks and which execute the transactions to these accounts, also belong to this category. Some FinTechs however only act on request of the customer.
Aside from that some FinTechs offer software or internet solutions enabling users to manage and plan their personal finances on their own by providing graphics, overviews and compilations of their financial data and sometimes indicating financial risks or opportunities, but without actually managing the assets.
Introduction
Attitude of the country towards modern asset and portfolio management services
The Austrian asset and portfolio management market continuously aligns with the related business models such as (crowd-)investing and brokerage.
The most developing businesses in the portfolio management sector are automated financial portfolio management and robo advisory. The asset management sector is mainly tech-driven and shaped by the trends of cloud computing, Internet of Things, advanced analytics as well as artificial intelligence.
Legal affairs
Obligations and requirements to provide asset and portfolio management, or ancillary services described above
Asset and portfolio management are financial services covered mainly by the Austrian Trade Act (Gewerbeordnung – "GewO") and, as the case may be, by the Austrian Securities Supervision Act 2018 (Wertpapieraufsichtsgesetz 2018 – "WAG 2018") and, in addition, the EU-wide Regulation (EU) 2019/2033 on the prudential requirements of investment firms from 27 November 2019 (Investment Firms Regulation – "IFR"). Also, anti-money laundering and data protection regulations and the Directive (EU) 2019/2034 on the prudential supervision of investment firms from 27 November 2019 (Investment Firms Directive – "IFD") are to be complied with.
According to the GewO, asset management is a regulated trade, whose performance is tied to a certificate of competence. In order to carry out the activity, registration in the Austrian Trade Register is required. In addition, the conclusion of a pecuniary loss liability insurance policy is necessary to obtain and maintain the license. Since 2019, asset managers have a comprehensive training obligation of 20 hours per year in accordance with Section 136a para. 6a GewO.
The profession of asset management is an activity characterised by numerous legal regulations, which is always directed towards the responsible handling of the assets of the customer.
In order to be allowed to operate as a securities company in Austria, a license from the Financial Market Authority (Finanzmarktaufsicht – "FMA") is required. Before the FMA issues a license, the company is comprehensively reviewed. This process takes an average time of one (1) year. In particular, the equity capital, the qualification of the business managers, the organisation and the business plan of the company are considered.
Among other things, particularly sufficient initial capital consisting of Common Equity Tier 1 capital ("CET1") available in Austria is required to obtain an FMA-license. In case of asset and portfolio managers who, in providing financial services, are not authorised to obtain ownership
or possession of funds or securities of customers and who do not trade in financial instruments for their