Reviving risk capital: The proposal to amend EuVECA and EuSEF

08-09-2017

The European Venture Capital Funds (EuVECA) and European Social Entrepreneurship Funds (EuSEF) are collective investment schemes, harmonised at EU level by means of two Regulations: (EU) No 345/2013 (EuVECA) and (EU) No 346/2013 (EuSEF). In its 2016 review, the Commission noted that these funds remain small and concentrated in a few Member States and that, while the take-up of EuVECA could be considered successful, the EuSEF results have been disappointing. To overcome the obstacles identified, it has proposed some measures that − by removing limitations on larger managers managing EuVECA and EuSEF funds, decreasing costs for EuVECA and EuSEF funds, and broadening the range of eligible assets EuVECA funds may invest in − should increase investment into these funds. The Commission’s proposal was extensively amended by the European Parliament and the Council, with regard to – among other things – initial capital requirements for those funds, minimum own funds for the funds’ managers, investor-protection provisions, as well as the powers of the European Securities and Markets Authority (ESMA). The provisional agreement struck in trilogue is due to be voted during the European Parliament’s September plenary session. Third edition The ‘EU Legislation in Progress’ briefings are updated at key stages throughout the legislative procedure. Please note this document has been designed for on-line viewing.

The European Venture Capital Funds (EuVECA) and European Social Entrepreneurship Funds (EuSEF) are collective investment schemes, harmonised at EU level by means of two Regulations: (EU) No 345/2013 (EuVECA) and (EU) No 346/2013 (EuSEF). In its 2016 review, the Commission noted that these funds remain small and concentrated in a few Member States and that, while the take-up of EuVECA could be considered successful, the EuSEF results have been disappointing. To overcome the obstacles identified, it has proposed some measures that − by removing limitations on larger managers managing EuVECA and EuSEF funds, decreasing costs for EuVECA and EuSEF funds, and broadening the range of eligible assets EuVECA funds may invest in − should increase investment into these funds. The Commission’s proposal was extensively amended by the European Parliament and the Council, with regard to – among other things – initial capital requirements for those funds, minimum own funds for the funds’ managers, investor-protection provisions, as well as the powers of the European Securities and Markets Authority (ESMA). The provisional agreement struck in trilogue is due to be voted during the European Parliament’s September plenary session. Third edition The ‘EU Legislation in Progress’ briefings are updated at key stages throughout the legislative procedure. Please note this document has been designed for on-line viewing.