Legal Updates

Proper proprietary trading

Austrian law requires a banking license for certain forms of proprietary trading. While the Supreme Administrative Court (VwGH) tends to classify many activities as banking business, the Supreme Court (OGH) recently took a more generous stand: Only where proprietary trading is done “in a bank-like manner”, a banking license is required. Trading in a bank-like manner requires multiple counterparties, a professional analysis- and professional trading system. (6Ob229/14s)

25. December 2015

Believing is not knowing

Acts of Austrian authorities come in many different forms; Not always will a formal (written) notice be issued. That’s generally accepted and sometimes preferrable. Caution should be exercised though when it comes to silence or a failure to act. The Supreme Administrative Court (VwGH) pointed out that such acts by the Financial Market Supervisory Authority (FMA) cannot generaly be interpreted as the granting of a grace period – not even where the silence or failure to act follow a formal request for a grace period. (2011/17/0081)

13. December 2015

Pin it on the auditor!

One of the requirements for tort under Austrian law is a certain nexus between action and damage. In a recent decision, the Austrian Supreme Court (OGH) relaxed this prerequisite. It held that an qualified auditors opinion does not need to directly cause damages to investors. Where such qualified auditors opinion is wrong and hence increases the risks for investors, such increase alone can already make the auditor liable for damage caused to an investor. (8Ob93/14f)

18. October 2015

No signature required

As a general rule, Austrian law requires that agreements to arbitrate must either be in the form of a signed document or included in exchangeds letters. The Austrian Supreme Court (OGH) clarified that an exchange of letters – via telefax – is an equal option and that such exchanged letters do not need to be signed; what’s important is that the respective issuers are identifiable. The OGH also stated that the technological means by which the letters are exchanged are generally irrelevant. (18OCg1/15v)

10. October 2015