English »Legal Updates
Admission of “in rem” restitutions for financial products
A financial products advisor with debt due to damages claims by investors went bankrupt. The Supreme Court for Civil Matters ruled in a recent decision regarding the handling of the claims: The remaining value of the purchased financial product shall be deducted from the amount of the damages claimed; at the same time the purchased financial product shall be retransferred to the financial products advisor. Regarding the calculation: The remaining value of the financial product shall be estimated as of the time of the opening of the bankruptcy proceedings. This type of handling claims is new to Austrian insolvency law. (1 Ob 208/17w)
25. May 2018
Banks must disclose internal commissions
An investment firm violated the Securities Supervision Act when brokering securities to an investor. The investment firm should have disclosed to the investor the receipt of sales-related commission. This disclosure was mandatory due to a conflict of interest between the investor and the service provider which granted the commission. According to a recent decision by the Supreme Court for Civil Matters, this violation of the Securities Supervision Act can also be grounds for damages claims against the investment firm. (4Ob94/17b)
17. May 2018
FMA has its finger on the pulse
An issuer, that offers securities to the public or applies for the admission of securities to the Vienna Stock Exchange, has to draw up an extensive prospectus. The prospectus has to include substantial information about the issuer and the offered securities. In an approval procedure the prospectus is scrutinised by the FMA regarding its completeness, coherence and comprehensibility. As of the beginning of the year it is possible to initiate the approval procedure online. A one-time registration by the issuer and the submission of the prospectus on the online platform of the FMA are the only requirements. Another improvement for the issuer trough this procedure is the transmission of the approved prospectus to the Oesterreische Kontrollbank (OeKB) by the FMA.
13. April 2018
An alternative calling for banks: Fortune telling
The Supreme Court for Civil Matters regularly deals with general terms and conditions of banks. A recent decision deals with a consent implying clause in general terms and conditions. Consent implying clauses allow one party to imply consent of the other party to an amendment of a contract – subject to certain requirements stipulated in the Consumer Protection Act and the Payment Services Act. The Supreme Court for Civil Matters derives from the requirement of transparency an obligation to inform the consumer about the reasons of an amendment – at the time of the conclusion of the consent implying clause. This shall minimize the risk of future passivity of the consumer. How the bank is supposed to know the reason for a future contract amendment in advance is a different question. (10Ob60/17x)
30. March 2018
Consumer Protection Act applies also for Choice of Law Clauses
According to a preliminary ruling of the ECJ The Supreme Court for Civil Matters ruled contrary to its previous point of view: A choice of law clause in the general terms and conditions with consumers is legally void, if the clause doesn’t contain an additional reference to the compulsory protective norms of the state of the habitual residence of the consumer. Since the clause in question didn’t contain such a reference it was non-transparent and therefore abusive. (2 Ob 155/16g)
12. March 2018