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Vienna, 04.04.2018 Löger wants clear rules for the financial services sector, implementing the first stage of FinTech Action Plan

With the assistance of the FinTech Advisory Council, ground rules are being established in order to put the new financial markets in the realm of digitalised financial services and ICOs and cryptocurrencies onto the right track. The Finance Minister is prioritising growth over regulation.

The digitalisation of the financial services sector (referred to by the abbreviation FinTech) arrived in Austria quite some time ago. The spectrum of financial products being offered grows all the time, and the consumer and investor demands are changing. Citing one example (the “Optioment” case), Löger noted that this is also accompanied by risks and uncertainties, to which the political sector has to react. “Digitalisation has triggered a relaunch of the financial market. The demand for new, innovative financial products is increasing, and if we use it in an intelligent way, the fresh air these products are bringing to this sector can have positive impacts on the reputation of the entire sector,” Finance Minister Hartwig Löger noted at the outset of his remarks, saying that he still considered the process of change to be in its infancy.

“However, at the moment the immense dynamism in this sector is straining the legal framework in which it operates, because that legal framework fails to take account of major areas of business. This gives rise to unanswered questions, particularly in respect of legal certainty and the protection of investors. This is a task we are setting for ourselves by establishing the FinTech Advisory Council. At the end of this process, we will have to put a legal framework in place in order to support the development of this new market. By this I mean the entire FinTech sector, in other words I am not merely referring to cryptocurrencies,” Löger stated. The convening of the FinTech Advisory Council for the first time marks the implementation of the next stage of the Action Plan Löger announced in February.

Löger noted that the remit of the FinTech Advisory Council is to develop proposals to govern this new market in an orderly way: “It is very clear that we are prioritising our ability to stimulate this market over our ability to regulate it. At the end of the day, we have no interest in creating a regulatory playground, but rather what we want to do is to create new perspectives for a market which is still in its infancy”. The Advisory Council is made up of experts from the realms of law and financial services practice and is being established by the Minister of Finance in order to develop sensible approaches to regulation. The dialogue with the FinTech Advisory Council will serve as a source of regulation that promotes growth, to be implemented in the near future. The plan is that the Advisory Council will convene at two-month intervals. Depending on the topical area, further members will join the Council in future.

When announcing the creation of the Advisory Council in February, Finance Minister Löger already gave some indications of the topical areas to be covered. These proposals will now be the subject of discussion and further elaboration by the FinTech Advisory Council. The proposals include, as a matter of priority, the creation of a new prospectus law governing Initial Coin Offerings and regulation of cryptocurrencies analogous to the regulation of gold or derivatives, Löger stated in closing.