EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 16 July 2010 
on the transfer of prudential supervision tasks to 
the Austrian Financial Market Authority  
(CON/2010/57) 
 
Introduction and legal basis  
On 2 June 2010, the European Central Bank (ECB) r eceived a request from the Austrian Ministry of 
Finance for an opinion on a draft Federal law am ending the Law on banking, securities supervision, 
pensions for employees and the self-employed, and seve rance payments (hereinafter the ‘draft law’). 
The ECB’s competence to deliver an  opinion is based on Articles 127(4) and 282(5) of the Treaty on the 
Functioning of the European Union and the third a nd fourth indents of Article 2(1) of Council 
Decision 98/415/EC of 29 June 1998 on the consulta tion of the European Central Bank by national 
authorities regarding draft legislative provisions1, as the draft law contains provisions concerning the 
Oesterreichische Nationalbank (OeN B) and relates to the collection,  compilation and distribution of 
financial and banking statistics. In accordance with the first sentence of Article 17.5 of the Rules of 
Procedure of the European Central Bank, th e Governing Council has adopted this opinion. 
 1. Purpose of the draft law 
1.1 The draft law transposes several di rectives into Austrian legislation
2. As mentioned in the 
consultation request, the draft law also includes an amendment to the Law on banking that does not 
relate to the transposition of directives. In line with Article 1(2) of Decision 98/415/EC, this 
opinion only covers such amendment. 
1.2 The new Article 3(8) of the Law on banking transf ers competences from the OeNB to the Austrian 
Financial Market Authority (FMA) as regards prudential supervision of credit institutions 
authorised to provide only investment, real esta te investment, and severance and retirement fund 
business (‘special purpose banks’). Concretely, the draf t law is intended to transfer to the FMA the 
                                                             
1 OJ L 189, 3.7.1998, p. 42. 
2 Directive 2009/111/EC of the European Parliament and of the Council of 16 September 2009 amending 
Directives 2006/48/EC, 2006/49/EC and 2007/64/E C as regards banks affiliated to cen tral institutions, certain own funds 
items, large exposures, supervisory arrangements, and cr isis management (OJ L 302, 17.11.2009, p. 97). Commission 
Directive 2009/27/EC of 7 April 2009 amending certain Annexe s to Directive 2006/49/EC of the European Parliament 
and of the Council as regards technical provisions concer ning risk management (OJ L 94,  8.4.2009, p. 97). Commission 
Directive 2009/83/EC of 27 July 2009 amending certain Anne xes to Directive 2006/48/EC of the European Parliament 
and of the Council as regards technical provisions c oncerning risk management (OJ L 196, 28.7.2009, p. 14). 
2 OeNB’s responsibility for providing individual ba nk off-site analysis and on-site audits in 
connection with such special purpose institutions.  
1.3 The explanatory memorandum explains the reasons  for the transfer of prudential supervisory 
competences from the OeNB to the FMA as follo ws. The OeNB’s common risk-based analysis 
approach to be applied to the abovementioned sp ecial purpose banks would not deliver meaningful 
results due to a lack of comparability with fu ll service banks. Furthermore, the memorandum states 
that the OeNB’s risk-based analysis approach would not be suited to the low balance sheet totals of 
special purpose banks. According to the memorandum, without the draft law the forthcoming implementation of Directive 2009/65/EC
3 would also lead to an OeNB non-systemic cross-border 
competency with regard to on-site inspections at foreign undertakings for collective investment in 
transferable securities, which are non-banks. Aust rian law considers investment companies as 
credit institutions, whereas in other Member Stat es they are not regarded as banks in accordance 
with Article 4(1) of Directive 2006/484. While the UCITS IV-Directive has to be transposed into 
Austrian legislation by 1 July 2011, the transfer of supervisory competences will already take effect 
on 1 January 2011 for organisational reasons.  
 
2. General observations 
The appropriate time to consult the ECB 
2.1 The ECB points out that, in cases of particular urgency which do not allow for a normal 
consultation period, the consulting authority may indicate urgency in the consultation request and 
ask for a shorter deadline for the ECB’s opinion to be adopted. This does not prejudice the 
consulting authority’s duty under Articles 127(4) a nd 282(5) of the Treaty to consult the ECB on 
national draft legislative provisions falling within its fields of competence. The second sentence of 
Article 4 of Decision 98/415/EC provides that the E CB must be consulted ‘at an appropriate stage’. 
This implies that the consultation should take pl ace at a point which affords the ECB sufficient 
time to examine the draft legislative provisions an d to adopt its opinion in all required language 
versions, and which also enables the relevant na tional authorities to take the ECB’s opinion into 
consideration before the provisions are adopted. Article 3(4) of Decision 98/415/EC also obliges Member States to suspend the a doption process for draft legislative provisions, pending receipt of 
the ECB’s opinion. The Ministry of Finance’s consultation request on 2 June 2010 did not indicate any urgency and also did not set a deadline for th e opinion, which in accordance with Article 3(1) 
of Decision 98/415/EC may not be less than one month. Notwithstanding this, the National Council 
adopted the draft law within less than one mont h and before this ECB opinion has been adopted
5. 
                                                             
3 Directive 2009/65/EC of the European Parliament and of  the Council of 13 July 2009 on the coordination of laws, 
regulations and administrative provisions relating to undertakings for collective investment in transferable securities 
(UCITS) (OJ L 302, 17.11.2009, p. 32). 
4  Directive 2006/48/EC of the European Parliament and of  the Council of 14 June 2006 relating to the taking up and 
pursuit of the business of credit instituti ons (recast) (OJ L 177, 30.6.2006, p. 1). 
5   See Austrian Parliament’s pr ess release, 01/07.07.2010/Nr. 585.  
3 2.2 The opportunity to adopt an opinion on a draft law allows the ECB to express its views on the 
substance of the proposed legislation, including co nsiderations such as the importance that the ECB 
may attach to a particular legislative propo sal and its potential impact on the Eurosystem. 
Therefore, the ECB reiterates its position that even cases of particular urgency do not relieve national authorities from their duty to consult it and to  allow sufficient time to take into account its 
views in accordance with Decision 98/415/EC. With respect to the ongoing consultation, the process of adoption of the draft law should have been suspended. The ECB’s comments on the consulted provisions do not eliminate the breach of  the obligation to consult the ECB. Even though 
the Austrian National Council already adopted the dr aft law on 7 July 2010, the ECB considers that 
its comments are important for its application a nd interpretation and any future amendments. The 
ECB would appreciate the Ministry of Finance givi ng due consideration to the above observations 
by honouring its obligation to  consult the ECB in the futu re, in accordance with Decision 
98/415/EC. 
Transfer of supervisory competences 
2.3 Article 127(5) of the Treaty assigns to the Eurosystem the task of contributing to the smooth 
conduct of policies pursued by the competent aut horities relating to the prudential supervision of 
credit institutions and the stability of the financia l system. In line with this Article, the ECB has 
consistently stated that maintaining a close i nvolvement of national central banks in prudential 
supervision is a condition for the Eurosystem to contribute adequately to monitoring the risks to 
financial stability in the euro area
6. The ECB notes that the OeNB’s broad role in the field of 
prudential supervision will – subject to the ECB’ s observations in paragraph 3.1 and 3.2 – not 
substantially diminish as a result of the adoption of  the draft law, since the supervisory tasks to be 
transferred only apply to companies not regarded  as credit institutions according to Article 49 of 
Directive 2006/48/EC. The ECB understands that, w ithout the draft law, the OeNB would be 
responsible for conducting on-site audits at br anches of foreign investment companies in 
accordance with Article 101(4) of Directive 2009/ 65/EC, whereby the competent authorities of one 
Member State may request the cooperation of the co mpetent authorities of another Member State in 
a supervisory activity or for an on-the-spot verificati on or in an investigation on the territory of the 
latter within the framework of their powers pursu ant to this Directive, although the national 
competent authority to supervise UCITS is and will continue to be the FMA.  
3. Information-sharing between the OeNB and the FMA 
3.1 As emphasised in previous ECB opinions7, central bank access to prudential information and 
cooperation between financial s upervisory authorities and central banks are essential to macro-
prudential monitoring, the oversight of payment systems and the safeguarding of other market 
infrastructures, which are in turn indispensable  for the smooth conduct of monetary policy and 
conducive to reducing the prudentia l reporting burden imposed on institutions. In particular, from a 
                                                             
6 See ‘The role of central banks in pr udential supervision’, published on the ECB’ s website at www.ecb.europa.eu; also see 
ECB Opinion CON/2001/10. All ECB opinions are available on the ECB’s website.  
7 See, e.g. paragraph 2.4 of ECB Opinion CON/200 7/33 or paragraph 9 of ECB Opinion CON/2001/10. 
4 financial stability perspective, a central bank would inevitably need to be involved in the event of 
any financial market crisis. In that context, the av ailability of relevant information and the ability to 
interpret it are crucial. Directive 2006/48/EC provides that, subject to confidentiality and professional secrecy requirements, information may be shared between supervisory authorities and 
central banks and vice versa, for the purposes of the exercise of their respective tasks. Therefore the 
legislation of virtually all Member States that  have adopted supervisory models based on an 
independent financial supe rvisory authority authorises the excha nge of information between central 
banks and supervisory authorities
8. 
3.2 Against this background, the ECB notes that as a c onsequence of this draft law the OeNB would no 
longer be authorised to evaluate individual speci al purpose bank analysis data in light of the 
individual and overall economic situation, especia lly for the purpose of performing its duties in 
connection with financial stability. This follows from the provision by the draft law that only the 
first to third and last sentences of Article 79(4a ) of the Law on banking will apply to special 
purpose banks. Accordingly, the FMA must share al l relevant information arising from its banking 
supervision activities in the joint database for banki ng supervision analysis. Relevant information 
includes data pursuant to Article 77(4), banking supe rvision data pursuant to Article 14 of the Law 
on financial conglomerates, reports from State Co mmissioners, the results of investigations and 
other observations regarding specific institutions  within the FMA’s area of responsibility. 
Furthermore, information available to both institutions  is to be stored in the database by the OeNB. 
The OeNB is also permitted to perform statistical  evaluations of the data  with the objective of 
generating results which are not related to specifi c persons. However, according to the draft law, 
the eighth sentence of Article 79(4a), which curren tly authorises the OeNB to evaluate individual 
special purpose bank analysis data for the purpose of its financial stability duties, would no longer 
apply to special purpose banks. Taking into acc ount the importance of central bank access to 
prudential information, the ECB considers es sential the OeNB’s continued access for macro-
prudential monitoring to all available prudential information, including special purpose banks, as 
far as this access is needed in the course of its respective duties. Provided the eighth sentence of 
Article 79(4a) of the Law on banking is retained , this problem will not arise. Otherwise, such 
access in case of need should be explicitly provid ed. Furthermore, according to Article 3 of the 
Commission proposal for a regulation establishing the European Systemic Risk Board (ESRB)9, 
this institution will be responsible for the macro-pr udential oversight of the financial system within 
the Union to prevent or mitigate systemic risks within the financial system, to avoid episodes of 
widespread financial distress, contribute to a smoot h functioning of the internal market and ensure 
a sustainable contribution of the financial sector  to economic growth. Therefore, the OeNB will 
need continued access to evaluate individual sp ecial purpose bank analysis data for financial 
stability.  
                                                             
8 See the examples stated in footnote 19 of ECB Opinion CON/2007/33. 
9  Proposal for a regulation of the European Parliament and of  the Council on Community macro prudential oversight of the 
financial system and establishing a European Sy stemic Risk Board, COM (2009) final, 23.9.2009. 
5 3.3 The ECB welcomes that the OeNB will continue to  perform statistical evaluations of supervisory 
analysis data regarding UCITS, real estate i nvestment funds and severance and retirement funds. 
The ECB also notes that the draft law does not affect  the statistical reporting obligations of special 
purpose banks to the OeNB on the activity of the funds they manage10. 
 
4. Specific issues 
The ECB supports legislation that clearly and explicit ly assigns competences to the respective supervisory 
authorities. However, while the draft law specifica lly transfers the on-site inspection responsibility, it 
does not confer on the FMA the responsibility for indivi dual bank analysis. Instead, the draft law merely 
suggests that certain provisions of Article 79(4a), including the fourth sentence empowering the OeNB to 
conduct off-site analysis, will no longer apply to sp ecial purpose banks. The draft law does not provide 
that the FMA will assume this res ponsibility in the future. This could imply that conducting individual 
bank analysis is no longer required for special purpo se banks The ECB understands that this is not 
intended. Accordingly, for reas ons of legal clarity, the ECB recommends expressly conferring on the 
FMA the responsibility of comprehensively evalua ting special purpose banks on an ongoing basis 
(individual off-site bank analysis). 
 This opinion will be published on the ECB’s website.   Done at Frankfurt am Main, 16 July 2010. 
[signed] 
  
The President of the ECB 
Jean-Claude TRICHET 
                                                           
 
10  These include among other reporting obligations under Regul ation ECB/2007/8 of 27 July 2007 concerning statistics on 
the assets and liabilities of investment funds (OJ L 211, 14.8.2007, p. 8).