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Vienna, 24.05.2019 'Regulatory sandbox' for fintechs submitted for legislative evaluation Löger/Fuchs: Austria set to become even more attractive as a centre for finance and innovation

Vienna (OTS) - Digitalisation of the financial services sector is advancing with great strides. In order to take account of these developments, already last year, the Austrian Finance Ministry set up the Fintech Advisory Council, which consists of dedicated experts, overseers and practitioners. "The aim is, with the support of the Council, to establish ground rules in order to steer the fledgling financial market in digitalised financial services, as well as ICOs and cryptocurrencies, along the right track, and help it to grow. Just two weeks ago, we submitted the BORA Compliance Package – the Digital Customer Profile – for evaluation; this Package will enable the financial centre of Austria to operate more simply and more efficiently. Now, just 14 days later, we are introducing the next measure aimed at strengthening Austria as a centre of innovation, the 'regulatory sandbox'," declared Austrian Finance Minister Hartwig Löger.

"For some companies in the fintech sector, it is particularly difficult, right from the outset, to keep sight of all supervisory roles and developments. Many companies give up and discard their business models. We now want to counter this," added Austrian State Secretary of Finance Hubert Fuchs.

With a 'regulatory sandbox', in future, fintechs will be able to test and develop their innovative business models for a limited period under the supervision of the Austrian Financial Market Authority (FMA). This represents a balanced approach which, on the one hand, ensures the requisite supervisory control, while on the other hand it leaves the way open to innovation and growth. The concept was developed by the Financial Conduct Authority (FCA) in the UK. As a result, an expert from the FCA also took a leading role in development of the Austrian 'regulatory sandbox'. "Through setting up a 'regulatory sandbox', we are establishing a protected development framework for innovative companies with new technologies. Through this measure, we are continuing to strengthen the innovative capacity of the financial sector and the location of Austria," stressed Mr Löger.

In order to become a participant in the sandbox, companies must fulfil certain preconditions; for instance, their business models must be based on information and communications technology (e.g. blockchain) and must demonstrate an increased innovative value which serves the interests of Austria as an innovative financial centre. The draft law however also offers access to established financial companies if, for example, they wish to try out a new business model jointly with start-ups.

"Digitalisation of the financial services sector is one of the most vital areas when it comes to Austria's future. Fintechs will from now on be able to test their innovative business models in a sandbox, thereby making Austria even more attractive as a centre of innovation," noted Minister Löger.

Following successful acceptance to the sandbox, the licences required for a particular business model may be applied for separately; the Austrian Financial Market Authority will support fintech start-ups in this process. This serves to ensure compliance with the highest supervisory standards, while simultaneously strengthening the Austrian financial sector.