AUSTRIA Law and Practice Contributed by: Oliver Völkel and Philipp Ley, CERHA HEMPEL
fore only applicable to business models involving tokenised financial instruments. Participants must be authorised and apply for specific permission from the
Under PSD2 and the Austrian Payment Act, payment service providers must clearly disclose all fees before contract conclusion and provide easy access to pric - ing information. For crypto-asset services under MiCA, CASPs must inform clients about fees, charges and how prices are determined, ensuring transparency and avoiding mis - leading pricing structures. 2.4 Variations Between the Regulation of Fintech and Legacy Players The regulatory framework for fintechs has increasingly converged with that for traditional financial institu - tions. MiCA introduces a harmonised regime for cryp - to-asset services, imposing licensing, organisational and conduct requirements that mirror many of the obligations already applicable to banks and invest - ment firms under traditional regulatory frameworks, such as MiFID II and the Capital Requirements Direc - tive/Capital Requirements Regulation (CRD/CRR). While fintechs operating under MiCA are now subject to prudential regulation, disclosure obligations and investor protection requirements, they are not permit - ted to engage in banking services, such as accepting deposits or offering payment accounts, unless they are licensed under the Austrian Banking Act. In con - trast, banks benefit from specific exemptions under MiCA and are permitted to issue ARTs without need - ing to obtain a separate MiCA authorisation. Austria also promotes innovation through its Regu - latory Sandbox, which was launched by the FMA in 2020. The Regulatory Sandbox offers fintechs the opportunity to test innovative business models in a controlled environment, often with a simplified super - visory approach. The Regulatory Sandbox is not avail - able to legacy players. In addition, particular fintech business models may fall outside the scope of MiCA, especially where crypto- assets qualify as financial instruments under MiFID II (eg, security tokens) or where services do not involve custody, exchange or transfer of crypto-assets. In these cases, fintechs may be subject to different regulatory requirements, depending on the specific business model.
FMA, which co-ordinates with ESMA. Digital Lending and Crowdfunding
Digital lending is regulated under Austrian national law (eg, the GewO for lending licences, or as part of bank - ing services under the BWG), depending on the struc - ture. Crowdfunding is regulated at the EU level by the European Crowdfunding Service Providers Regulation (ECSPR). Platforms must be authorised as ECSPs and are supervised in Austria by the FMA. The Alterna - tive Investment Fund Managers Directive (AIFMD) or national securities laws may also apply, depending on the product structure. DeFi Platforms DeFi is not explicitly regulated in Austria or the EU. However, where DeFi platforms facilitate regulated activities, such as trading financial instruments or custody, they may fall under MiFID II, MiCA or AML obligations, depending on the degree of decentralisa - tion and control. The FMA and ESMA emphasise a “substance over form” approach, meaning regulatory obligations may still apply even if no clear legal entity is involved. Regulatory gaps remain due to the cross- border, anonymous nature of DeFi. Misclassification can result in non-compliance with licensing and conduct rules, especially given that national supervisory authorities like the FMA are closely aligned with EU-wide enforcement trends. 2.3 Compensation Models Industry participants in Austria may use various com - pensation models (direct fees, commissions, spreads or bundled pricing) depending on their regulatory sta - tus. Under MiFID II, firms must ensure all costs are transparent and fair, and disclosed in advance. This includes providing a clear cost and charges disclo - sure, especially for investment services. Inducements (eg, third-party commissions) are only allowed if they enhance service quality and are fully disclosed.
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