The Vienna Stock Exchange and the Stock Exchange Act
The securities industry is regulated by the Austrian Stock Exchange Act 2018 (FLG. No. 107/2017), as amended.
The management and operation of the stock exchange, Wiener Börse, was the responsibility of Council of the Vienna Stock Exchange (Wiener Börsekammer), which was an entity under public law, until 1998. Since April 1998, Wiener Börse has been managed by a private sector company. Wiener Börse AG has been assigned the authority to act as public agency for certain tasks (e.g. admission of securities to official listing).
Amendments to the Stock Exchange Act (SEA) have changed and greatly improved the legal framework. Among others, the following areas have been amended:
- The abuse of inside information and market manipulation (Art. 154 SEA 2018) have been made a criminal offence.
- Introduction of the obligation on issuers to take the suitable organizational measures to prevent the abuse of passing on of inside information (Art. 119 par. 4 fig. 3 SEA 2018)
- Obligation of issuers to disclose price-sensitive information (Art. 155 Abs 1 Z 2 SEA 2018, more information is available at www.fma.gv.at
- )Greater reporting obligations with respect to changes in significant shareholdings: if the share of voting rights of securities listed on the Official Market is equal to, higher or less than 3% (only if required by the Issuers’ Articles of Association), 4%, 5%, 10%, 15%, 20%, 25%, 30%, 35%, 40%, 45%, 50%, 75% or 90%, this fact must be reported (Art. 130 ff SEA 2018).
- Obligation to prepare interim reports (Art. 125 SEA 2018)
- Opening membership and easing membership rules (trading participant) for companies from third countries (Art. 29 SEA 2018)
Operation of regulated markets
Since the amendment to Federal Act, FLG I No. 60 of 31 July 2007, which entered into force on 1 November 2007, a distinction has been made between the operation of regulated markets and Multilateral Trading Systems (MTF).
A regulated market is a multilateral system operated and/or managed by a market operator in Austria or in a member state, which brings together or facilitates the matching of multiple third-party buy and sell interests in financial instruments within the system in accordance with non-discretionary rules in such a way that results in a contract in those financial instruments admitted to trading under the rules and systems of the market.
The FMA shall keep a list of regulated markets.
Regulated markets in Austria in the meaning of the Stock Exchange Act are the Official Market and the Second Regulated Market.
The operation of regulated markets in Austria shall require a license from the Financial Market Authority (FMA).
Wiener Börse AG is an exchange operating company and has a license for the operation of regulated markets.
Operation of Multilateral Trading Systems
The operation of an MTF is an investment service that requires a license from the FMA and is subject to the provisions of the Securities Supervision Act.
The operator of a regulated market shall be authorized to operate an MTF under a separate permit issued by the Financial Market Authority (see Art. 3 par. 3 SEA 2018).
The differentiation made between the operation of regulated markets and the operation of Multilateral Trading Systems (MTF) has resulted in repeal of Article 69 Stock Exchange Act regarding the unregulated Third Market, as this market is deemed an MTF.
Wiener Börse AG as the exchange operating company operates the Multilateral Trading System Third Market on the basis of separate General Terms and Conditions, the “Rules for the Operation of the Third Market“, which have been prepared with the approval of the FMA.
Trading in financial instruments on the Third Market does not require any formal admission procedures to the exchange.
The requirements of the Stock Exchange Act regarding the formal admission of financial instruments to trading on a regulated market and the obligations of issuers on a regulated market do not apply to financial instruments traded on the Third Market. However, the obligations defined in Article 17 (Public Disclosure of Inside Information), Article 18 (Insider Lists) and Article 19 (Managers’ Transactions) of the Market Abuse Regulation (Regulation (EU) No. 596/2014) do apply in conjunction with § 155 para. 1 nos. 2 to 4 and § 119 para. 4 of the Austrian Stock Exchange Act 2018, as well as the bans imposed by Article 14 (Prohibition of Insider Dealing and of Unlawful Disclosure of Inside Information) and Article 15 (Prohibition of Market Manipulation) of the Market Abuse Regulation (Regulation (EU) No. 596/2014) in conjunction with § 154, § 163 and § 164 of the Austrian Stock Exchange Act 2018. However, the above mentioned obligations for financial instruments traded on the Third Market are only applicable if the issuer has submitted an application for inclusion in trading of the financial instrument or has approved it.
It is hereby pointed out that there may be differences with respect to financial instruments of foreign issuers trading on the Third Market as compared to financial instruments of Austrian issuers included in the Third Market. These differences may concern the following (this is not an exhaustive list): property law aspects (the rights of the buyer regarding financial instruments held in safe custody abroad, for example), the delivery or settlement of financial instruments, differences with respect to company law (e.g. voting rights and dividend rights) and also other aspects such as taxation.