Austria: Bank´s Duty of Confidentiality

Part 2
Last Updated: 8 March 2005
This article is part of a series: Click Bank´s Duty of Confidentiality for the previous article.

Article by Michael Kutschera, Thomas Schirmer and Alexander Kramer

Assessment of the banks’ taxes

There is no bank secrecy to the extent that a disclosure of bank secrets is necessary for the assessment of taxes to be paid by the banks themselves: BWG, s 38(3). Certainly, bank secrets obtained by the (fiscal) authorities in such manner are subject to official secrecy and must not be passed on to other public authorities or used in whatever manner in regard to third parties to which such bank secrets relate.

Exchange control, income tax, FMA, deposit protection facilities, bank auditors, Ombudsman, Audit Office, trustee in bankruptcy

There is further no bank secrecy with respect to the Austrian National Bank’s right to certain information in matters of exchange control,57 with respect to certain notice requirements under the Income Tax Act or other revenue laws, further, in regard to the right to information of, and the duty of disclosure to, the FMA in its function as bank regulatory authority (BWG, s 69ff) and as securities supervisory authority (BWG, s 38(2), no 9),58 the deposit protection facilities (BWG, s 38(2), no 2 in connection with ss 93 and 93a), the bank auditors (BWG, s 38(2), no 2 in connection with s 61(1)), the Audit Office (Rechnungshof) and the Ombudsman (Volksanwalt), and towards the trustee in bankruptcy in bankruptcy or reorganisation proceedings.

Foreign bank regulatory authorities

Pursuant to s 77 of the BWG, the FMA may give official information to foreign bank regulatory authorities provided:

  1. the ordre public, other essential interests of the Republic of Austria, bank secrecy and the revenues law duty of confidentiality are not violated thereby;

  2. there is reciprocity; and

  3. a similar request for information made by the FMA would be in accordance with the purposes of the BWG.

The FMA may provide official information only if s 77(5) to (7) of the BWG (specifying the countries to whose authorities official information may be transferred and the tasks under which such transfer is permissible) or applicable treaties do not provide to the contrary. At present there is no such treaty; in particular, Austria has not ratified the Convention on International Assistance in Administrative Matters. Section 77 of the BWG does not grant to foreign bank regulatory authorities a specific right to request information, but specifies definitely the limits of the FMA upon granting international legal assistance.

Furthermore, the FMA may give information on large borrowings in the sense of s 75(3) of the BWG to the relevant authorities of any member state of the EU upon its request (BWG, s 75(5)) provided:

  1. the requesting member state maintains a similar register on large borrowings;

  2. there is reciprocity;

  3. the data will be used for bank regulatory purposes only; and

  4. the given information is subject to the professional secrecy pursuant to art 30 of Council Directive 2000/12/EC.

Conflicts of interest and fiduciary duties Conflicts of interest might occur both between the interests of the bank and its client and between the interests of two or more clients of the same bank. As a matter of general contract law, the contractual relationship between the bank and its client entails certain mutual fiduciary duties and duties of care (Schutz- und Sorgfaltspflichten).59 Particularly with respect to securities transactions, the bank’s contractual duties also entail the duty to inform and advise the client (Aufklärungs- und Beratungspflichten) properly.60

From this follows, first, that the client’s interests shall always prevail over the interests of the bank. For example, a bank clearly must not recommend a transaction in which it may gain financial benefit by giving incomplete, biased or one-sided information or objectively detrimental advice to the client. In addition, the bank is prohibited from obtaining advantage from any kind of ‘frontrunning’, ie the advantageous conclusion of (adverse or similar) nostro transactions by the bank itself, for example, on the occasion of large client orders. On the other hand, there seems to be the prevailing view that a bank shall not be obliged to take into account its client’s interests in the course of conducting nostro transactions. If, for example, the bank intends to buy a large stake in a certain company which makes a price increase foreseeable, it shall not be obligated to inform a selling client; however, the bank must refrain from any recommendation as to the selling of these shares by its clients.61

Secondly, from the contractual (in particular, the fiduciary) duties set out above it follows that the banks are under an obligation towards their clients to avoid, as far as possible, any situations which would expose them to a conflict of interests between clients. Often, for example, a bank represents a client whom it assists with the borrowing of money and at the same time it tries to place the shares among other clients, for example, private investors who are interested in buying shares in such company. The borrowing client may expect that its financial and economic situation will not be disclosed by the bank; the private investor, on the other hand, may expect to be informed about the risks of this investment. With respect to situations where the bank’s role is limited to the financing of a risky undertaking (as opposed to the role as an investment adviser), the OGH held that the duty to inform an investor should not be interpreted too broadly, since a reasonable investor may be expected to know of the principle that the higher the profit opportunities, the higher is the risk. A duty to inform would only exist in exceptional instances, if the bank actually was aware of, for example, atypical risks of the participation.62 No general duty of the bank exists to inform the client of all circumstances that may influence the client’s investment decision.63

The duty of confidence pursuant to bank secrecy might also conflict with the bank’s duty to inform and advise its clients. There is the prevailing view that the interest of another client of the bank in being informed and advised properly does not constitute an exception to bank secrecy. Consequently, the bank may – without the client’s express and written consent – only provide general information on the economic situation of such a client, even if the other client seems to need further information with regard to a proper investment decision.64 This view was confirmed by the OGH, which held that a financing bank, if under a duty to inform the private investor about the undertaking to be financed, must either refrain from the contemplated transaction or, prior to the information of the client about its concerns, obtain the undertaking’s consent (provided that general information on the undertaking’s economic situation would not have been sufficient) in order to comply with bank secrecy.65

The conflict of interest problems may gain particular relevance in situations where a bank gains access to insider information, for example, because it assists an issuer of securities or because an executive board member of the bank or a bank employee serves as a member of the supervisory board of another company at the same time.66 Such conflict might arise both in nostro transactions of the bank itself and in transactions of other clients to whom the bank gives advice (for example, with regard to the sale or purchase of securities or the granting of credits or loans to other bank clients). According to the rules on insider trading (which are dealt with in detail below), both the trading in and the recommendation of securities by a bank having insider information as to these securities as well as the disclosure of insider information constitutes a criminal offence. Thus, a bank is not only prohibited from exploiting information obtained from one of its clients in its own transactions, but also is neither entitled nor obliged to pass on insider information to any other of its clients.67

Insider trading and Chinese Walls

Until 1989, Austrian law did not contain any statutory provisions on insider trading at all.68 In order to address the problem of insider trading, the Vienna Stock Exchange issued Guidelines for the Prevention of Insider Trading in 1987.69 As of 1 December 1989, a new Stock Exchange Act (BörseG) came into effect, ss 26 and 82 of which dealt with the problems of insider trading for the first time in Austrian law.70 In accordance with these provisions, ‘Insider Rules of the Chamber of the Vienna Stock Exchange’ were issued as of 6 July 1990.

With effect from 1 October 1993, the law on insider trading has been changed fundamentally by the introduction of two new provisions of the BörseG – ss 48a and 48b – and by an amendment of s 82. In particular, the provisions on liquidated damages as a compulsory sanction for insider violations were abolished and replaced by criminal punishment and administrative penal punishment, complemented by supporting measures for the prevention of insider trading. Thus, the Austrian law on insider trading does not contain an explicit provision that creates a statutory basis for claims under civil law in situations involving insider trading.71 Since 1993, these have been consolidated by further amendments and, concomitantly, the FMA has been made the responsible supervising authority with respect to insider trading situations.

Criminal offence

The core72 of the provisions on insider trading is s 48a of the BörseG, a provision of criminal law which covers both primary insiders (insiders) and secondary insiders (tippees).73

According to s 82(1) of the BörseG, it shall constitute a criminal offence (imprisonment for up to two years or fines) if a person who qualifies to be an insider exploits insider information in the course of trading with securities with the malicious intent to obtain an economic advantage for himself or a third person, provided such person (the insider) (i) either buys or sells, or recommends to a third party the sale or purchase of such securities or (ii) or discloses such information to a third party without being obliged thereto.

In addition, a person who does not qualify to be an insider (a tippee) is subject to criminal punishment (imprisonment for up to one year or fines) if he knowingly exploits insider information that was communicated to it or which it learned otherwise with the same malicious intent as set out above, provided such person (the tippee) buys or sells such securities: BörseG, s 48a(2).

The elements contained in these two provisions, are partly defined in s 48a of the BörseG itself. They can be described as follows:

  1. ‘Insider’ is deemed to be any person having access to insider information due to his profession, occupation, task or participation in the share capital of the issuer. This definition does not only cover the issuer of securities (including its organ members, employees and shareholders who hold any direct or indirect participation in the issuer that enables them to have access to insider information of the issuer, and the organ members of such shareholders), but also persons receiving insider information due to a temporary contractual relationship with the issuer (for example, the issuer’s attorneys, accountants, public relations advisers and other consultants), further institutional investors, market makers, brokers, journalists and, in particular, banks.74

  2. The qualification as a ‘secondary insider’ does not necessarily require that the secondary insider was aware of whether or not the received information was – directly or indirectly – communicated to it by a (primary) insider. Thus, a secondary insider is any person who learns or knows of any insider information, irrespective of the source of the information and the means of how it learned of the insider information, provided only it does not qualify as a primary insider.

  3. ‘Insider information’ is any information about a certain confidential (ie not known to the broad public) fact (as opposed to rumours, opinions) which is connected either to securities or to the issuer of securities and which could have a material impact on the price development of the securities if the fact became known to the public.75

  4. ‘Securities’ are defined as certain specified instruments (particularly shares, debt obligations, bonds, bills and other negotiable securities, subscription rights, options, futures and other financial and derivative instruments) provided they are admitted for trading on a market (i) which is regimented and supervised by officially approved authorities, (ii) directly or indirectly accessible by the public and (iii) on which trade occurs on a regular basis.

Ancillary measures, Standard Compliance Code and disclosure of insider information

In addition to the criminal sanctions set out above, Austrian law requires the establishment of organisational measures in order to prevent the abuse and the passing-on of insider information. Section 82(5) of the BörseG imposes on any issuer for the purpose of preventing insider transactions the duty:

  1. to notify its employees and any other persons becoming otherwise active for the issuer of the prohibition of abuse of insider information;

  2. to establish, and supervise the compliance with, internal guidelines for the passing-on of information within the enterprise; and

  3. to adopt appropriate organisational measures to prevent any abuse or passing-on of insider information.

In addition to the issuer, these duties are also imposed on banks and institutional investors (contractual insurance companies and pension funds) (BörseG, s 48b), on all members to the stock exchange (BörseG, s 18, no 5) and stock exchange dealers (BörseG, s 36(6)). Violation of these duties is subject to administrative penalties (fines of up to **€20,000) and disciplinary sanctions (elimination or suspension from participation in the stock exchange). In addition, ss 13 no 2, 14 and 16 to 18 of the Act on the Supervision of Investment Services in the Securities-Field (Wertpapieraufsichtsgesetz) contain further compliance provisions for banks engaged in investment services relating to securities which also aim at the prevention and tracking of insider transactions.76

Section 82(5a) of the BörseG authorises the FMA to issue a regulation setting out principles for the passing-on of information within the enterprise pursuant to 1 above, as well as for the establishment of organisational measures pursuant to 3 above. These principles shall, in particular, preclude the possible creation, and assist in tracing, of situations involving insider trading. Based thereon, the FMA has issued, with effect as of 1 April 2002, a Compliance Code (Emmittenten-Compliance-Verordnung) for issuers of securities admitted on an Austrian stock exchange for official listing or regulated over-the-counter trading. However, the Compliance Code does not apply to banks, pension funds, insurance companies and as certain investment firms: s 2(2) of the Compliance Code.

Consequently, with regard to banks, pension funds and insurance companies, the rules of compliance which have been formulated by these businesses themselves since 1993 on the basis of s 82(5) of the BörseG in the form of guidelines setting forth certain minimum standards remain in existence and applicable.77

The Standard Compliance Code of Austrian Banks of 1999 (SCC), sets fort certain minimum standards to which all of the Austrian banks agreed to adhere. According to the SCC, every bank has to appoint at least one person responsible for the compliance with the SCC (the compliance officer).The SCC further recommends the creation of separate ‘areas of confidentiality’ within the bank’s internal structure by adopting appropriate internal organisational measures order to prevent an exchange of confidential information. Any compliance-relevant information held in one area may in general not leave that area. Every employee of an area of confidentiality needs to agree in writing to refrain from transmitting confidential information – both inside the bank and to third parties – by way of the ordinary bank information channels. The creation of such Chinese Walls is not regarded as a mandatory minimum standard, but shall depend on the size of the bank. Disclosure of information to another area of confidentiality is permitted only if it is limited to cases of absolute necessity and if the confidentiality of the compliance relevant information is preserved. A communication may thus occur only with the knowledge of the area manager and the compliance officer. The contents, source and the dates of disclosure and receipt of information shall be documented. Employees that permanently or temporarily switch from one area of confidentiality to another shall not disclose or exploit in the new area confidential knowledge they have acquired in the old area of confidentiality.

The compliance officer shall further keep a (strictly confidential, internal) ‘watch list’ of securities and derivatives with respect to which the bank holds material investment and price-relevant information which is not yet publicly available. The placing on this list itself has no immediate legal consequences. It will, however, facilitate the monitoring of nostro trading or employee transactions that could raise the suspicion that confidential information has been exploited in an unfair manner. In this context, reporting duties of the bank’s departments and employees to the compliance officer in cases of large orders (combined with the prohibition against ‘frontrunning’) and any other compliance relevant information are established. In addition to the watch list, the compliance officer must keep and distribute throughout the bank78 a ‘restricted list’ (Sperrliste), which includes securities and derivatives with respect to which information is received that might have an immediate material impact on the price development. These titles shall be removed from the official list of recommendations. Employee and nostro transactions in these titles, as well as active advice and recommendations by the bank, are substantially restricted.

Finally, s 82(6) of the BörseG79 principally requires any issuer of securities which are admitted for official listing or regulated over-the-counter trade to disclose without undue delay any new fact that occurred in the issuer’s field of activity, provided it qualifies as materially affecting the price development of the security because of its impact on the course of the issuer’s business, its economic position or earnings. Prior to such notification to the public, the issuer must file a notification of these facts to the FMA and to the Stock Exchange.

Footnotes

1 With regard to the predecessor provision of s 38(5) BWG, s 23a KWG, see the critics by Jabornegg ‘Neues zum Bankgeheimnis’ (1990) WBl at 30 and 61.

2 For the wording, see the first edition of this book, p 33ff and Economy (1989) at 34 and 36.

3 See Klippl Geldwäscherei (1994) p 56.

4 Following these amendments, the European Commission has abandoned its complaint of 28 July 1998 against the Republic of Austria as to the compatibility of Austrian law with the provisions of Council Directive 91/308/EEC on the prevention of the use of the financial system for the purpose of money laundering.

5 Section 75 of the BWG (like its predecessor provision in the KWG, s 16) provides that credit institutions and finance institutions, as well as contract insurance businesses, have to provide certain data (name and address of the borrower and the amount borrowed) on large borrowings (more than **€350,000) to the Austrian National Bank, which collects them and has to pass them on to other credit and finance institutions, to contract insurance businesses and deposit protection facilities (et al) upon request. BWG, s 38(1) to (3) apply also to finance institutions and to contract insurance businesses in respect of BWG, s 75(3): see BWG, s 38(4). BWG, s 38(4) was last amended as per 1 May 1999, extending the application of the provisions on bank secrecy and the exceptions thereto also to guarantee schemes except for the cooperation required by BWG , ss 93 to 93b with other guarantee schemes, to deposit guarantee schemes and to investor compensation schemes

6 See Arnold ‘Das Bankgeheimnis’ ZGV Service 1/1981, p 20; Avancini, Iro and Koziol Österreichisches Bankvertragsrecht (1987) vol I, p 103ff; Frotz ‘Die Bankauskunft nach österreichischem Recht’ in Hadding and Schneider (ed) Bankgeheimnis und Bankauskunft in der Bundesrepublik Deutschland und in ausländischen Rechtsordnungen (1986) p 257; Jabornegg, Strasser and Floretta Das Bankgeheimnis (1985) p 31ff; Laurer ‘Das Bankgeheimnis in der Entwicklung von Lehre und Rechtsprechung’ (1986) ÖJZ at 385.

7 See Arnold, n 6 above, p 20; Arnold ‘Zum Bankgeheimnis, Anmerkungen zu einer kontroversiell diskutierten Rechtsthematik – zugleich eine Buchbesprechung’ (1986) ÖBA 359 at 360; Avancini, Iro and Koziol, n 6 above, vol I, p 104; for a mandatory nature, Jabornegg, Strasser and Floretta, n 6 above, p 34ff.

8 Avancini, Iro and Koziol, n 6 above, vol I, p 106; Jabornegg, Strasser and Floretta, n 6 above, p 55; for banks with concession only, Arnold, n 6 above, p 4; Frotz, n 6 above, p 257.

9 An exception contained in BWG, s 38(4) with regard to the information passed on according to BWG, s 75(3); see n 5 above. In respect of finance institutions, however, the statutory language is not very clear as to the question bank secrecy applies even beyond BWG, s 75(3); for a broader application, see Laurer in Fremuth, Laurer, Linc, Pötzelberger and Strobl Kommentar zum Bankwesengesetz (1999) p 476; compare with Klippl, n 3 above, p 31.

10 Arnold, n 6 above, p 5; Avancini, Iro and Koziol, n 6 above, vol I, p 108; Jabornegg, Strasser and Floretta, n 6 above, p 56ff; Kastner ‘Kreditwesengesetz und Gesellschaftsrecht’ (1980) JBl 62 at 70.

11 Avancini, Iro and Koziol, n 6 above, vol I, p 110ff; Jabornegg, Strasser and Floretta, n 6 above, p 65ff.

12 Arnold, n 6 above, p 8; Burgstaller ‘Der strafrechtliche Schutz wirtschaltlicher Geheimnisse’ in Ruppe (Hrsg) Geheimnisschutz im Wirtschaftsleben (1980) p 13; Frotz, n 6 above, p 237; Jabornegg, Strasser and Floretta, n 6 above, p 37; the required interest might become very weak after decades of time – see Laurer, n 9 above, p 458.

13 Laurer, n 9 above, p 458.

14 Exception: BWG, s 75(3), see n 5 above.

15 Arnold, n 6 above, p 8; Avancini, Iro and Koziol, n 6 above, vol I, p 114ff; Haushofer, Schinnerer and Ulrich Die österreichischen Kreditwesengesetze (1980) s 23/16; Jabornegg, Strasser and Floretta, n 6 above, p

16 Avancini, Iro and Koziol, n 6 above, vol I, p 125; Jabornegg, Strasser and Floretta, n 6 above, p 137ff; Bzoch and Bittner Bankwesengesetz 1993 (1995) s 38-5, by referring to a decision of the Austrian Supreme Court (OGH) in 1991 (OGH 4 Ob 114/91) according to which bank secrecy was violated since secrets were disclosed to other bank employees within the same bank who themselves were obliged by the bank’s duty of confidentiality, even though they had no dealings with the client’s affairs. Note, however, that the decisive ground for the holding of this decision was the abuse of information for reasons of unfair competition.

17 Laurer, n 6 above, at 389 and n 9 above, p 456.

18 See Greiter ‘Das Auskunftsrecht des Aktionärs und des Partizipanten gemäß § 112 AktG’ (1989) ÖJZ 524 at 526 and 528.

19 Avancini, Iro and Koziol, n 6 above, vol I, p 125ff; Haushofer, Schinnerer and Ulrich, n 15 above, s 23/7; Jabornegg, Strasser and Floretta, n 6 above, p 86; Schinnerer ‘Zur Problematik einer gesetzlichen Regelung des börslichen Insider-Geschäftes in Österreich’ (1985) ÖBA at 271.

20 Avancini, Iro and Koziol, n 6 above, vol I, p 126.

21 A release from the duty of non-disclosure of official secrets shall be limited to the grounds of BWG, s 1(2); according to Laurer, n 9 above, p 458 this shall also be applied to the information duties under the Act on Information Duties (against, however, the Austrian Administrative Court (VwGH) 89/17/0028 (1992) ÖBA at 89).

22 Avancini, Iro and Koziol, n 6 above, vol I, p 127; Jabornegg, Strasser and Floretta, n 6 above, pp 69ff, 124ff.

23 Avancini, Iro and Koziol, n 6 above, vol I, p 127; Liebscher ‘Das Bankgeheimnis im In- und Ausland’ (1984) ÖJZ 253 at 255.

24 Avancini, Iro and Koziol, n 6 above, vol I, p 163ff; Jabornegg, Strasser and Floretta, n 6 above, p 160ff.

25 Arnold, n 6 above, p 20; Avancini, Iro and Koziol, n 6 above, vol I, p 164ff; Jabornegg, Strasser and Floretta, n 6 above, p 162ff.

26 Avancini, Iro and Koziol, n 6 above, vol I, p 165ff; Frotz, n 6 above, p 267ff; compare with Jabornegg, Strasser and Floretta, n 6 above, p 163.

27 Avancini, Iro and Koziol, n 6 above, vol I, p 165ff.

28 OGH 27.2.2002 (2002) ecolex at 194.

29 Avancini, Iro and Koziol, n 6 above, vol I, p 168; Jabornegg, Strasser and Floretta, n 6 above, p 164.

30 With effect as of 1 April 2002, the FMA was established as new supervisory authority for banks, securities and capital markets, insurance companies and pension funds.

31 Avancini, Iro and Koziol, n 6 above, vol I, p 170ff; Jabornegg, Strasser and Floretta, n 6 above, p 165ff.

32 Arnold, n 6 above, pp 12, 18ff; Avancini, Iro and Koziol, n 6 above, vol I, p 129; Jabornegg, Strasser and Floretta, n 6 above, p 93; restrictively, Laurer, n 9 above, p 454, according to whom additional exceptions (ie information duties, eg under the General Civil Code (ABGB) or the Act on Foreign Exchange Control (DevG)) could prevail over bank secrecy only if enacted as a provision of constitutional law or as an exception based upon a provision of judicial criminal law.

33 OGH 29.1.1997 (1997) ecolex at 498; this decision was criticised by Wilhelm ‘Formularmäßige Entbindung vom Bankgeheimnis’ (1997) ecolex at 490.

34 Laurer, n 9 above, p 464; Arnold, n 6 above, p 17; Avancini, Iro and Koziol, n 6 above, vol I, p 131ff; Frotz, n 6 above, p 244ff; Jabornegg, Strasser and Floretta, n 6 above, p 99ff.

35 Against a revocation at any time: Laurer ‘Bankgeheimnis’ 386 FN 19; and Laurer, n 9 above, p 465. For a revocation at any time: Arnold, n 6 above, p 17; Avancini, Iro and Koziol, n 6 above, vol I, p 139; Frotz, n 6 above, p 245; Jabornegg, Strasser and Floretta, n 6 above, p 103.

36 See Arnold, n 6 above, p 19; Avancini ‘Der Auskunftsanspruch des Bürgen gegenüber dem Gläubiger – Zugleich ein Beitrag zum Bankgeheimnis’ (1985) JBl 193 at 204ff; Avancini, Iro and Koziol, n 6 above, vol I, p 161ff; Frotz, n 6 above, p 254ff; Jabornegg, Strasser and Floretta, n 6 above, p 142ff; Steiner ‘Zur Aufklärungspflicht der Kreditunternehmung bei Wechseldiskontgeschäften’ (1983) JBl 189.

37 OGH 29.1.1997 (1997) ecolex at 491.

38 See Avancini, n 36 above, at 193ff; Steiner, n 36 above, at 189ff; against: Laurer, n 9 above, p 454.

39 OGH 2.2.1984 (1984) SZ 57/29; OGH 29.4.1986 (1986) JBI at 511; Avancini, Iro and Koziol, n 6 above, vol I, p 157; Frotz, n 6 above, p 252ff; Jabornegg, Strasser and Floretta, n 6 above, p 151ff.

40 OGH 7.11.1991 (1992) ÖBA at 654, which is, however, disputed by two major commentators (Jabornegg (1997) ÖBA at 655ff; Laurer, n 9 above, p 454).

41 Arnold ‘Entscheidungsanmerkung’ (1986) AnwBl at 417; Avancini, Iro and Koziol, n 6 above, vol I, p 141; see also Jabornegg, Strasser and Floretta, n 6 above, p 110ff.

42 OGH 18.1.1989 (1989) JBI at 454; see also Weber ‘Das Bankgeheimnis bei eingeleiteten gerichtlichen Strafverfahren’ (1990) RdW 435.

43 See eg OGH 11 Os 171/86; VWGH 15.4.1997, 93/14/0080.

44 Avancini, Iro and Koziol, n 6 above, vol I, pp 141, 144; Jabornegg, Strasser and Floretta, n 6 above, p 108ff; Liebscher, n 23 above, at 254. Against a lifting of bank secrecy: Arnold, n 6 above, p 13.

45 Arnold ‘Die Finanzstrafgesetznovelle 1985’ (1986) ZGV at 7; Avancini, Iro and Koziol, n 6 above, vol I, p 146.

46 Arnold, n 45 above, at 9; Avancini ‘Neueste gesetzliche Regelungen zum Bankgeheimnis’(1986) RdW at 299; Avancini, Iro and Koziol, n 6 above, vol I, p 146.

47 Avancini, n 46 above, at 299; Avancini, Iro and Koziol, n 6 above, vol I, p 147.

48 OGH 16.12.1993 (1994) ÖBA at 728; OGH 9.3.1995 (1996) JBI at 532; Avancini, Iro and Koziol, n 6 above, vol I, p 149; Jabornegg, Strasser and Floretta, n 6 above, p 156; Laurer, n 6 above, at 393.

49 For a detailed description of the above, see Laurer, n 6 above, at 391ff; Schütz ‘Die Anfechtung des Bankgeheimnisses aufgrund eines ausländischen Amtshilfeersuchens in Strafsachen’ (1996) JBl at 502ff and OGH 9.3.1995 (1996) JBI at 532.

50 Avancini, Iro and Koziol, n 6 above, vol I, p 149.

51 On 8 November 2001, the Council of Europe passed a Second Additional Protocol to the European Convention on Mutual Assistance in Criminal Matters. Under the new art 1(3) of the European Convention on Mutual Assistance in Criminal Matters, ‘mutual assistance may also be afforded in proceedings brought by the administrative authorities in respect of acts which are punishable under the national law of the requesting or the requested Party by virtue of being infringements of the rules of law, where the decision may give rise to proceedings before a court having jurisdiction in particular criminal matters’. The Second Additional Protocol has not yet entered into force.

52 VwGH 2l.l0.1983 (1984) ÖStZB at 189; OGH 16.12.1993 (1994) ÖBA at 728.

53 Beiser ‘Entscheidungsanmerkung’ (1984) RdW at 192; Beiser ‘Das österreichische Bankgeheimnis (§ 23 KWG) im Verhältnis zum Ausland, insbesondere zur Bundesrepublik Deutschland’ (1985) ÖJZ at 178; see also Arnold ‘Entscheidungsanmerkung’ (1984) AnwBl at 172.

54 Avancini, Iro and Koziol, n 6 above, vol I, p 150; Jabornegg, Strasser and Floretta, n 6 above, p 156; Laurer, n 6 above, at 393.

55 Laurer, n 9 above, p 454; Arnold, n 6 above, p 22; Avancini, Iro and Koziol, n 6 above, vol I, p 158; Jabornegg, Strasser and Floretta, n 6 above, p 153ff.

56 Laurer, n 9 above, p 475ff ; OGH 1.12.1998 (1999) EvBl at 100.

57 VwGH 28.10.1994 (1995) WBl at 256.

58 It should be noted that upon the establishment of the FMA, BWG, s 38(2)9 has not been amended accordingly. Therefore, it still mentions its predecessor, the Federal Securities Supervisory Authority (Bundes-Wertpapieraufsicht, BWA) as the authority towards which bank secrecy shall be lifted. It is disputed whether this non-amendment has the consequence that no exception to the duty of bank confidentiality shall exist towards the new FMA in its function as securities supervisory authority. See Brandl and Wolfbauer (2002) ecolex at 294ff, according to whom bank secrecy shall not be lifted towards the FMA as securities supervisory authority. Against: Painz and Tauböck (2002) ecolex at 132ff.

59 Avancini, Iro and Koziol, n 6 above, vol I, p 42ff.

60 Avancini, Iro and Koziol, n 6 above, vol II, p 588ff.

61 Avancini, Iro and Koziol, n 6 above, vol II, p 605ff.

62 OGH (1995) ÖBA at 146ff and 627ff.

63 OGH (2002) RdW at 341.

64 Avancini, Iro and Koziol, n 6 above, vol II, p 614ff.

65 OGH (1995) ÖBA at 627ff; OGH (1998) ÖBA at 733.

66 For details see Koziol ‘Pflichtenkollisionen im Wertpapiergeschäft bei Übernahme von Aufsichtsratsmandaten durch Mitarbeiter der Bank’ in Enzinger, Hügel and Dillenz Aktuelle Probleme des Unternehmensrechts (1993) p 351ff.

67 See eg OGH (2002) RdW at 341.

68 Only a minority view held that ss 23 and 34 of the KWG covered insider trading: cf Roth ‘Der Wall Street- Skandal und das österreichische Kapitalmarktrecht’ (1987) RdW pp 221, 222). In addition, ss 121 and 122 of the Austrian Penal Code which sanction certain offences involving the disclosure of professional, trade and business secrets were considered to cover insider trading.

69 For the wording and details of these Guidelines, see the first edition of this book, p 48ff; see further Schinnerer ‘Zur Problematik einer gesetzlichen Regelung des börslichen Insider-Geschäftes in Österreich’ (1985) ÖBA 271 at 273.

70 The sanctions of a violation of insider trading contained in these provisions were limited to contractual consequences, ie liquidated damages, which, however, turned out to be inefficient and were thus applied in a single instance only (Decision of the Chamber of the Vienna Stock Exchange of 7 February 1992). In a number of other instances, there was suspicion about insider trading only, which could not be proven: see Hausmanninger Insider Trading (1997) p 354ff. For the wording of these provisions, see the first edition of this book, p 51.

71 Of course, it might be possible to have recourse to statutory provisions of a more general nature to find a legal basis for such claims: see Hausmanninger, n 70 above, p 408ff.

72 Sceptical, however, Hausmanninger ‘‘Organisatorische Maßnahmen zur Verhinderung mißbräuchlicher Verwendung oder Weitergabe von Insiderinformation nach der BörseGNov 1993’ (1993) ÖBA at 848, because of its inefficiency in practice.

73 See Hausmanninger, n 70 above, p 371ff.

74 See Hausmanninger, n 70 above, p 372ff.

75 See Hausmanninger, n 70 above, p 376ff.

76 For a summary see eg Hausmaninger ‘Anpassungs- oder Ergänzungsbedarf des Standard Copliance Code der österreichischen Kreditinstitute (‘SCC’)? Eine Analyse im Lichte der neuen Compliance-Bestimmungen des BörseG und WAG’ (1998) ÖBA at 678ff.

77 Standard Compliance Code of Austrian Banks (1999); Directive According to Sec 48a in Connection with Sec 82 subs 5 BörseG for Pension Funds (1995); and Compliance Guidelines for the Avoidance of Insider Trading for Insurance Companies (1994).

78 This list is otherwise, however, subject to bank secrecy pursuant to BWG, s 38.

79 Besides this general duty, special disclosure provisions applicable exist, eg in connection with share buybacks or a change in the issuer’s ownership structure. 

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