Regulation, licensing and registration

Principal regulatory bodies

What are the principal regulatory bodies that would have authority over a private equity fund and its manager in your jurisdiction, and what are the regulators’ audit and inspection rights and managers’ regulatory reporting requirements to investors or regulators?

Private equity funds established as AIFs and their managers are subject to the ongoing supervision by the FMA. The FMA has a wide range of inspection and audit rights both with respect to the AIFM and the respective AIF.

Private equity funds that are not AIFs are not subject to designated ongoing regulatory supervision (except by the competent tax office). For such private equity funds, investors only benefit from the information rights set forth in the articles of association or partnership agreement of the fund vehicle and the reporting obligations under accounting and corporate law (mainly, the disclosure of the annual financial statements).

Governmental requirements

What are the governmental approval, licensing or registration requirements applicable to a private equity fund in your jurisdiction? Does it make a difference whether there are significant investment activities in your jurisdiction?

Private equity funds established as AIFs and managed by a registered AIFM (see question 12) need to be registered with the FMA. Private equity funds established as AIFs and managed by a licensed AIFM (see question 12) need to be approved by the FMA. Special registration requirements apply to AIFs designated as EuVECAs or ELTIFs (see question 2).

Private equity funds not established as AIFs require no special registration, except for the registration with the Companies Register upon incorporation (see question 1).

Registration of investment adviser

Is a private equity fund’s manager, or any of its officers, directors or control persons, required to register as an investment adviser in your jurisdiction?

Private equity funds established as AIFs need to be managed by an AIFM. Austrian law distinguishes between AIFMs, which require licensing by the FMA, and AIFMs, which only have to register with the FMA. Licensed AIFMs do not need any additional licences for their management activities for the fund. Registered AIFMs may require a trade permit for asset managers. Special registration requirements apply for managers of ELTIFs (see question 2).

Different licensing requirements apply for the promotion of interests in the funds (see question 24).

Fund manager requirements

Are there any specific qualifications or other requirements imposed on a private equity fund’s manager, or any of its officers, directors or control persons, in your jurisdiction?

Austria-based AIFMs generally require a licence of the FMA. There is a de minimis exception for managers of small AIFs with assets of less than €100 million (where leverage is used) or less than €500 million (where no leverage is used). Managers of such small AIFs are only subject to a few regulations of the AIFMG. They do not require a licence and only need to register with the FMA.

A licensed AIFM needs to have a minimum capital of €125,000, if it is an external manager of AIFs. If the AIFM is the internal manager of an AIF, the minimum capital requirement is €300,000.

In addition, the AIFM needs to have sufficient equity to cover 25 per cent of its annual running costs.

Increased equity requirements apply for licensed AIFMs, if the assets under management exceed €250 million; in any case, the minimum capital is capped at €10 million.

The persons tasked with the management of the AIFM need to be sufficiently experienced and have to pass a ‘fit and proper’ test by the FMA, if so requested. At least two persons must be appointed by the AIFM as its managers.

In the application, the AIFM needs to provide information on shareholders holding qualified participations in the AIFM (ie, shareholdings exceeding 10 per cent), on any closely related entities (ie, a third party that holds a stake of more than 20 per cent of the AIFM or that controls the AIFM, or is controlled by the AIFM or in which the AIFM holds a stake of more than 20 per cent), its business plan, its remuneration policy, its investment strategies, a description of any competencies delegated to third parties and information on the contractual basis pursuant to which it manages its AIFs.

The decision of the FMA regarding the licensing of an AIFM has to be passed within three months upon submission of the required documentation. If the AIFM intends to register an AIF as an ELTIF, he or she must apply to the FMA for prior approval.

Political contributions

Describe any rules - or policies of public pension plans or other governmental entities - in your jurisdiction that restrict, or require disclosure of, political contributions by a private equity fund’s manager or investment adviser or their employees.

There are no such rules applying to managers or investment advisers (or their respective employees) in Austria. However, political parties are required to report any donation exceeding €50,000 to the Court of Audit, which will publish this information on its website. Additionally, Austrian political parties are barred from accepting donations over €2,500 from foreign entities or nationals. Of course, anti-bribery laws apply as well.

Use of intermediaries and lobbyist registration

Describe any rules - or policies of public pension plans or other governmental entities - in your jurisdiction that restrict, or require disclosure by a private equity fund’s manager or investment adviser of, the engagement of placement agents, lobbyists or other intermediaries in the marketing of the fund to public pension plans and other governmental entities. Describe any rules that require a fund’s investment adviser or its employees and agents to register as lobbyists in the marketing of the fund to public pension plans and governmental entities.

Austria introduced special legislation concerning the registration of lobbyists in 2012, which also requires companies utilising the services of lobbyists to register in a publicly accessible register maintained by the Federal Ministry of Justice. However, this legislation does not cover activities such as the marketing of a private equity fund.

Bank participation

Describe any legal or regulatory developments emerging from the recent global financial crisis that specifically affect banks with respect to investing in or sponsoring private equity funds.

There are no such rules in Austria.