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Austria's FMA levies fine of €135,000 on Bank Winter & Co

Chris Hamblin, Editor, London, 23 July 2020

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Bank Winter of Austria, which offers custom-tailored services in all areas to private individuals and others, has had to pay a fine to the regulator by means of a penal order for breaking the Financial Markets Anti-Money Laundering Act.

Bank Winter & Co AG has had to pay its penalty to the Financial Market Authority (FMA) by means of a penal order for failing to send off a suspicious activity report and to determine and check all beneficial owners of a customer. The penal order is final.

On the same day the FMA imposed a fine of €600 against a private HNW investor for breaking the European Union's Market Abuse Regulation by conducting several fictitious transactions or 'crossings.'

The FMA also recently imposed a fine of €1,600 on LLB Invest Kapitalanlagegesellschaft MBH for breaking the investment provisions in Article 71 para 2 no 2 Investment Funds Act 2011 (InvFG 2011) in relation to a jointly owned fund.

The FMA recently published its annual Market Study on Fund Fees charged by Austrian Retail Funds in which it said that fund fees that are charged for investors in Austrian retail funds have not changed significantly (as at the reporting date of 31 December) since the end of 2018. The average maximum management fees stand at 1.23%, the continuing annual costs at 1.14% and the maximum entry charges for people who purchase units in funds at 3.60%. The information came from the legally prescribed information contained in Key Investor Information Documents (KIIDs) as well as the fund regulations for 1,035 funds with a total volume of more than €101 billion as at 31 December.

There are significant differences between investment strategies and risk classes. The greater the risk, the higher the fund fees. Short-term bond funds have the lowest charges on average by investment strategy, followed by bond funds, real estate funds, mixed funds and equity funds. Funds with that concentrate on "sustainability" display marginally lower fees than in the market as a whole. The fund fees in Austria, of 1.2%, are somewhat lower than the European average of 1.5%.

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