Market Profiles

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Vienna Stock Exchange (Wiener Börse)
Founded in 1771, Wiener Börse AG, the company that operates the Vienna Stock Exchange, is one of the oldest stock exchanges in the world. Today, it is a modern, customer and market-oriented financial service company that plays a key role in the Austrian capital market. It is its driving force that contributes substantially to its further development.

Vienna Stock Exchange operates the only securities exchange in Austria as well as the Energy Exchange Austria, EXAA, and the CEGH Gas Exchange of Vienna Stock Exchange. It provides state-of-the-art infrastructure, market data and information to ensure the smooth and efficient execution of stock exchange transactions and facilitate the interaction among all market participants.

The core business of the exchange is the operation of a cash market (equity market, bond market), a futures market as well as a market for trading in structured products. Additional services include data vending, index development and management and specialised financial market seminars and training courses.

Vienna Stock Exchange is the initiator for the creation and a subsidiary of the CEE Stock Exchange Group, the largest exchange group in Central and Eastern Europe, with participation in the exchanges of Budapest, Ljubljana and Prague. Shareholders in Vienna Stock Exchange are the Austrian central securities depository (OeKB GmbH), banks, insurance companies and other publicly traded companies.

Since its introduction at the beginning of November 1999, cash securities trading has been carried out through Xetra®, the trading system of Deutsche Börse. VSE market model includes continuous trading with several auctions, trading with only one auction per trading session and continuous auction.

Derivative market was closed by end of March 2014.

ISIN (International Securities Identification Numbering): Yes

Other: Not applicable

Austrian Financial Market Authority (FMA):
As an integrated supervisory institution, FMA, which was founded in 2002, brings together the responsibility for supervising all significant providers and functions under one roof - banks, insurance undertakings, pension companies, corporate provision funds, investment firms and investment service providers, investment funds, financial conglomerates and exchange operating companies. It also monitors all activities necessary to ensure that trading in listed securities complies with the legal requirements and the principles of fairness and transparency. It ensures that the prospectuses connected with the public offering of securities appropriately explain to investors the opportunities and risks of investment. It acts to ensure that the principles of sound company management and advice are upheld, that the unauthorised trading and offering of financial services is prevented and punished, and that all financial institutions have the necessary systems in place to take preventive action against money laundering and terrorism financing.

Austrian National Bank (OeNB):
OeNB is the central bank of Austria and, as such, an integral part of both the European System of Central Banks (ESCB) and the Eurosystem. In the public interest, OeNB contributes to monetary and economic policy decision making in Austria and in the euro area.
The main tasks of OeNB center on contributing to a stability-oriented monetary policy within the Eurosystem, safeguarding financial stability in Austria and supplying the general public and the business community in Austria with high-quality, i.e. counterfeit-proof, cash. In addition, OeNB manages reserve assets, i.e. gold and foreign exchange holdings, with a view to backing the euro in times of crisis, draws up economic analyses, compiles statistical data, is active in international organizations and is responsible for payment systems oversight. Furthermore, OeNB operates a payment system for the euro, promotes knowledge and understanding among the general public and decision makers owing to its comprehensive communication policy, and supports research in Austria.

Austrian Federal Ministry of Finance (BMF)
The Austrian Ministry of Finance is the country's highest financial authority. The Ministry's responsibilities stretch from budgetary planning and surveillance, economic policy and financial services to customs and taxation.

Austria is a bearer market and the vast majority of securities are held in the form of global certificates deposited with OeKB GmbH which then reflects them via book-entry records.Additionally, following a legal change in 2011, all non-listed companies will have to change the form of their shares from bearer to registered, by the end of 2013 at the latest.

The trading system XETRA includes two important safety mechanisms - volatility interruption (during auctions and during continuous trading) and market order interruption (during auctions) - which contribute significantly to the prevention of price jumps and help to maintain price continuity as well as improve the probability of unlimited order execution

The volatility interruption can be triggered in two different ways: if the indicative execution price is outside the dynamic price corridor on either side of the reference price or is outside the additionally defined static price corridor. The market order interruption represents a one-time prolongation 
of the call phase of an auction in a situation where the market orders in the book at the end of the call phase cannot be executed or can be executed only partially.

Each of the safety mechanisms can be triggered only once per price determination phase and if both occur at the same time, the market order interruption has priority. If after an interruption the indicative auction price remains outside one of the two price corridors, price determination is still carried out, respectively market orders are executed in part or not at all.

EUR, USD, CHF & GBP

OTC's transactions may be entered into with all tradable securities on the Austrian Market. Such transactions are settled through  the T2S system used by OeKB CSD GmbH as of 6 February 2017. T2S Members can input their instructions manually into the system via a direct link or submit them via SWIFT to enable STP. Trades must be submitted to the system by both sides prior to 15:50 on SD. Instructions sent to DS.A can be cancelled and resent, if not already matched prior to the market deadline, which is 16:00 on SD for against payment transactions (keeping in mind though that custodian deadlines, which are earlier than these market deadlines have to be taken into consideration as well) and only prior to the settlement. Amendments to matched instructions are not possible, such matched instructions will have to be bilaterally cancelled and resubmitted. OeKB CSD GmbH matches the instructions and initiates the cash and securities movements through the appropriate depository accounts to complete the settlement. Cash and securities are exchanged simultaneously.

Trading hours: Monday to Friday: No specific trading hours with any universally established timeframes, trading is possible during "regular" business hours.

Book-Entry: Central Counter Party Austria (CCP.A) is responsible for the clearing and settlement on all market segments of Vienna Stock Exchange. On the cash market CCP.A settles and clears all exchange transactions concluded with CCP eligible securities on Vienna Stock Exchange. In its function as central counterparty it assumes the risks of non-performance and default for all trades. All securities that have not been included in the clearing system are considered non-CCP eligible and trades in such must be settled directly between the counterparties. Exchange transactions in CCP eligible securities must be finalised on the third clearing day after the conclusion of the trade. Settlement is done fully electronically through the NewClear (Millenium) system, which records all trades in a clearing and settlement day and only those balances that result from the netting are settled. This process helps minimise the number of clearing and settlement transactions and ensures efficient clearing in line with international standards.

Transactions that result in a short position or the increase of a short position (so-called short selling) in shares are not permitted. The market makers, specialists and liquidity providers in auction trading are exempted from this prohibition if these transactions are necessary in order for them to fulfil their contractual obligations. Short selling that serves to secure already existing positions is exempt from this prohibition.

The relevant authority must be notified by investors of the short position of shares and government debt when the position reaches or falls below the levels specified in the regulation. The relevant authorities are the local Financial Supervisory Authorities (FSAs). 

The short positions of shares must also be disclosed to the public by posting information on the local FSA's website when a position reaches or falls below the specified levels. 

For full information of the new regulation and reporting requirements please visit the European Securities and Markets Authority website at http://www.esma.europa.eu/.

Turnaround trades are possible - both for stock exchange and OTC transactions.

Central Counterparty Austria (CCP.A) - The clearing of security trades is the process of sending, netting and recording payments and securities instructions, for the purpose of calculating the final positions and sending these to the clearing bank, the function of which has been vested in OeKB CSD GmbH. The clearing bank is responsible for the settlement of the instructions.

CCP.A launched its operations at the end of January 2005 (though established in August 2004). Its shareholders with equal participation of 50% each are Wiener Börse AG and Oesterreichische Kontrollbank AG.

Austrian Central Securities Depository (OeKB) - OeKB CSD GmbH
Established in 1946, OeKB is a stock corporation with registered ordinary shares that may be transferred only with the consent of the Supervisory Board. It acts as the Central Securities Depository and provides among others, the following services:

• securities custody
• clearing and order routing to foreign securities exchanges
• provision of descriptive and analytical financial data
• process support and IT solutions for the funds industry
• access to the SWIFT network via the SWIFT Service Bureau
• auction agent for Austrian government bonds
• advice and processing services for issuers

As of September 14, 2015, the Austrian capital market has a new service provider: The OeKB CSD GmbH.

The 100% owned subsidiary of the Oesterreichische Kontrollbank AG (OeKB) successfully assumed the role of the domestic central securities depository (CSD) by taking over the responsibilities from its parent company. OeKB will still be in charge of the national ISIN allocation and remain the registration office in accordance with the Austrian capital market laws. OeKB CSD GmbH took over all CSD functions that OeKB has maintained during the last five decades

OeKB CSD GmbH opens settlement securities custody accounts and exchange cash accounts for stock exchange members and section member banks as well as settlement securities accounts for custodians. Issuers are only allowed to open a securities custody account and keep their own securities directly at OeKB CSD GmbH.

BIS is an international organisation which fosters cooperation among central banks and other agencies in pursuit of monetary and financial stability. The Committee on Payments and Market Infrastructures (CPMI) uses three common structural approaches, or models, to categorise the links between delivery and payment in a securities settlement system.

None of the three BIS settlement models is applicable to the Austrian market.

OeKB GmbH can execute transfers between accounts on a true delivery versus payment basis, i.e. it guarantees the seller that the securities to be sold will be debited from its account only against the simultaneous credit of the payment of the proceeds taken by the buyer.

Book-Entry: Austria is a bearer market and the vast majority of the securities are held in bearer form via the use of global certificates deposited at OeKB, which eliminates the need for physical securities. Custodians maintain custody accounts at OeKB which are updated automatically upon settlement.

Non-listed Austrian companies

For securities kept in bearer form, global certificates are kept at OeKB, which also keeps the book-entry records for such securities. In case of physical securities, each involved issuer of these remaining few maintains its own registration records.

For securities kept in bearer form, global certificates are kept at OeKB, which also keeps the book-entry records for such securities. In case of physical securities, each involved issuer of these remaining few maintains its own registration records.

Share holdings may be required to be disclosed by the beneficial owner, particularly when holdings reach or exceed prescribed disclosure limits. Investors must ensure that they comply in full by reporting such holdings to the appropriate organisations for this market, within the timeframe required. If you have any questions regarding this issue we encourage you to consult your legal counsel. 

Failure to comply with reporting requirements may lead to penalties of up to EUR 2 million for private individuals or twice the amount of the benefit gained from the violation committed and/or other sanctions. The fines for legal entities may amount up to EUR 10 million, 5% of the total annual net revenues or twice the benefit gained from the violation. In the case of repeated non-disclosure, the relevant party can be banned from trading for 10 consecutive days. Also all voting rights shall be suspended to the extent of the difference between the new percentage of voting rights and the last percentage of voting rights reported by the person in breach of the regulations. The voting rights may only be exercised again after a period of six months after the reporting obligation has been complied with.

The Austrian Financial Market Authority, Vienna Stock Exchange and the issuer must benotified immediately but no later than two days of the trade date when ownership of voting rights or share capital crosses the thresholds of 3% (only if required by the Issuers' Articles of Association) 4%, 5%, 10%, 15%, 20%, 25%, 30%, 35%, 40%, 45%, 50%, 75% or 90%. FMA must be notified in advance of any transaction involving a credit institution or an insurance company which will result in ownership crossing the thresholds of 20%, 30% or 50% of the equity capital or voting rights - upon receipt, FMA has sixty days to object that.

A clearing member is deemed to have defaulted if its securities account at OeKB GmbH is insufficiently covered on SD+1 at 14.00 CET (second SICS cycle), thus not being able to ensure delivery. For the duration of the delay in delivery, from SD+1 to SD+3, a penalty interest of 0.3% per day will apply (with a minimum of EUR 250).

A buy-in will be initiated if the short position is still not covered on SD+3 after the second SICS cycle (14:00 CET), for which a flat fee of EUR 250 will be charged (per buy-in).

If the shortfall can still not be covered until 14:00 CET on SD+4, the trade will be settled in cash on SD+5, based on the original trade price or the closing price on S+4, whichever is higher.

Securities lending is available, however it is practiced on bilateral basis only - it is not offered as service by OeKB GmbH and there is no pool on the market.

In order to ensure the fulfilment of all transactions CCP.A applies modern risk management methods, which include credit quality assessment, clearing collateral and clearing fund. When calculating the collateral to be deposited, a clearing member's default risk is assessed. Should a clearing member fall into default with its trades (except technical default), the default procedure and the realisation of collateral shall apply. The risk management controls are fully integrated into the clearing system.

Each participating clearing member is obligated to deposit the clearing collateral and, in addition, to contribute a specific amount to the clearing fund maintained by CCPA. The amount must be supplied to CCP.A in the form of euro cash deposit or bank guarantee, and shall serve exclusively to cover open liabilities in the event of default that cannot be covered fully by their own clearing collateral or the amount contributed to the clearing fund by the defaulting party.

Every Austrian credit institutions must comply with a number of due diligence requirements of the Austrian Federal Banking Act (BWG) including such related to the identification of clients and the implementation of measures against money laundering and terrorism financing. Originally accepted in 1993, BWG has been amended to incorporate the special recommendations of FATF in 2003 and Directive 2005/60/EC in 2007.

Austria is also a member of FATF and therefore applies all FATF rules.

None

None

Capital, profit and income can be repatriated freely.

EUR is freely convertible and FX services are available.

With the implementation of TARGET2 in November 2007, Austria was one of the countries to take part from the start. The previous Austrian TARGET component ARTIS has been renamed to hoam.at (Home Accounting Module Austria) and started working under the new name along with the start of TARGET2, forming part of the pan-European payment system. Participation in hoam.at is permitted under the conditions stipulated in the TARGET2 guidelines and the domestic general terms and conditions of business of hoam.at.

OeKB GmbH has established a direct link to OeNB, which enables all participants to settle the cash side of their securities transactions directly via hoam.at, thereby taking advantage of the higher liquidity at OeNB.

Overdrafts are permitted on the market under special agreement.

Austrian companies pay dividend on an annual basis usually after general meetings held mostly around April - May each year. Dates and any special procedures are set at the shareholder meeting of the issuer. Dividend payments are then announced in the official legal gazette (Amtsblatt zur Wiener Zeitung).

The record date rule was adopted by the Austrian CSD. The record date is defined as the date on which settled positions are struck in the books of the Issuer CSD at close of business to determine the entitlement to proceeds of a Corporate Action. It will be introduced for the following categories of Corporate Actions:

• Distributions: Cash Distributions, Securities Distributions and Distributions with Options
• Reorganisations: Mandatory Reorganisations with Options, Mandatory Reorganisations and Voluntary Reorganisations

The timeline for Distributions will be as follows:

• Announcement by Issuer
• Ex-Date (unless issued in nominal) – minimum 2 days after the Announcement
• Record Date – settlement cycle minus 1 business day (i.e. 1 business day) after Ex-Date
• Payment Date – preferably 1 business day after Record Date

Dividend amounts are credited to the shareholder accounts only after actual receipt of funds from the paying agent.

For tax purposes the entitlement to a withholding tax reclaim in Austria is based on beneficial ownership as of end of day on AGM Date -1.

Annually

Interest on most Austrian bonds is payable on an annual basis, with the exception of some fixed-interest securities, which would pay interest on a quarterly or a semi-annual basis (e.g., floating rate notes). Dates and any special procedures are determined by the issue's prospectus or terms and conditions.

Securities holders are entitled to receive interest (maturity) payments according to the settled position on record date. Ex and record dates are, respectively, usually four and three working days before the pay date.

Payment is not done on contractual basis but accounts are credited with the income amount only after actual receipt from the paying agent. In most cases, OeKB GmbH is acting as paying agent, which receives the full payment amount from the issuer and distributes it to its members.

Money Market: ACT/360
Bonds: ACT/ACT

All corporate events have to be announced in the Official Legal Gazette, Amtsblatt zur Wiener Zeitung. There are no fixed rules for their announcement but usually such are of the ex date of the event.

Dividend entitlements are protected based on traded positions. For fixed income, entitlements are protected based on settled positions.

The Austrian Government approved a change in the companies' law in 2009, which had a major impact on shareholder meetings held for companies organised under Austrian law. According to the amended legislation, the following major changes were implemented:

• record date was established
• declaration of beneficial owner to the issuer was required
• proxy voting had to be declared
• announcement periods were extended
• televoting, voting by mail or other technical means was allowed

In order to attend the meeting or have the votes presented by a proxy holder, the first depository bank of the beneficial owner, which has to be located in EEA/OECD country, has to issue a Confirmation of Holding (CoH), which has to contain certain mandatory data (e.g., issuer of CoH, ISIN, number of shares, beneficial owner details, record date). This document has to be issued after the record date (10 calendar days prior to the meeting) and has to be forwarded to the Austrian issuer three business days prior to the meeting at the latest. 

In addition to the CoH, a Power of Attorney (PoA) is required, which is valid for this specific meeting only. Such PoA is needed when the beneficial owner forwards his voting rights to either UniCredit Bank Austria AG as proxy holder or to any other individual person and usually has to be presented directly at the entrance of the meeting.

Within a chain of depositories it is allowed to provide a combined CoH/PoA. Only if UniCredit Bank Austria AG is named as proxy, this combined CoH/PoA can be used, in any other case a separate PoA is required (also valid for a specific meeting only).

It is possible to provide partial and/or split voting instructions. Split voting has however been reduced due to the fact that each beneficial owner has to be declared, so usually voting is attributed to one single beneficial owner.

During a shareholder meeting, the physical presence of a shareholder or a proxy acting on its behalf is required, as Austrian issuers have so far not adopted in practice the possibility for televoting, voting by mail or other technical means.

No.

Invitations to shareholder meetings are subject to public notice. As shares listed in Austria are bearer shares, shareholders cannot be addressed individually and therefore, according to the Austrian Stock Corporation Act, invitations must be published in the official legal gazette (Amtsblatt zur Wiener Zeitung) at least 28 days prior to the meeting.

Available within 24 hours of the meeting.

On request, if available in English

Required, as explained above.

All corporate actions entitlements are based on the traded position as per ex date-1. Only shareholder meeting participation / voting is based on the settled position as of the record date. In case of shareholder meetings, the issuer can determine the record date in its announcement.

On the Austrian market corporate bond holders are not entitled to participate in any shareholder meeting as these securities do not bear voting rights. Preferred shares usually do not bear voting rights either but may receive such in certain cases (e.g., no dividend payment for a certain period of time) - this is advised when the meeting is announced.

27.5%

0%, non-resident investors are exempt.

A non-resident company or a non-resident individual is taxable with regards to business income, if they do business through permanent establishment in Austria or participate in such business (i.e. the income is from Austrian sources). Capital gains from Austrian situs immovable property are taxable for a non-resident company or individual as business income, regardless of whether or not the immovable property is attributable to a permanent establishment.

Tax Treaties not in force yet: Chile, Libya, Syria

Tax Treaties on inheritance (I) and gift (G) taxes: Czech Republic (I/G), France (I/G), Germany (I), Hungary (I), Liechtenstein (I), Netherlands (I/G), Sweden (I), Switzerland (I), USA (I/G), Poland (I)

Tax Information Exchange Agreements: Andorra, Gibraltar, Monaco, St. Vincent and the Grenadines, Guernsey, Jersey, Mauritius

None

None

AUSTRIA Holiday Calendar

• Vienna Stock Exchange wienerborse.at
• Austrian Financial Market Authority fma.gv.at
• Austrian National Bank oenb.at
• Austrian Central Securities Depository oekb.at
• Austrian Federal Ministry of Finance english.bmf.gv.at
• Central Counterparty Austria ccp.at/cms/12/