European Parliament legislative resolution of 13 September 2012 on the draft Council Decision concerning the renewal of the Agreement for scientific and technological cooperation between the European Community and the Federative Republic of Brazil (10475/2012 – C7-0181/2012 – 2012/0059(NLE))

P7_TA(2012)0337 A7-0268/2012

(Consent)

The European Parliament,

–  having regard to the draft Council Decision (10475/2012),

–  having regard to Council Decision 2005/781/EC of 6 June 2005 on the conclusion of the Agreement for scientific and technological cooperation between the European Community and the Federative Republic of Brazil(1),

–  having regard to the request for consent submitted by the Council in accordance with Article 186 and Article 218(6), second subparagraph, point (a), point (v) of the Treaty on the Functioning of the European Union (C7-0181/2012),

–  having regard to Rules 81 and 90(7) and 46(1) of its Rules of Procedure,

–  having regard to the recommendation of the Committee on Industry, Research and Energy (A7-0268/2012),

1.  Consents to the renewal of the Agreement;

2.  Instructs its President to forward its position to the Council, the Commission and the governments and parliaments of the Member States and of the Federative Republic of Brazil.

(1) OJ L 295, 11.11.2005, p. 37.

European Parliament legislative resolution of 13 September 2012 on the draft Council decision on the conclusion of the Agreement between the European Union and the People's Democratic Republic of Algeria on scientific and technological cooperation (08283/2012 – C7-0122/2012 – 2011/0175(NLE))

P7_TA(2012)0338 A7-0267/2012

(Consent)

The European Parliament,

–  having regard to the draft Council decision (08283/2012),

–  having regard to the draft agreement signed on 19 March 2012 (17318/2011),

–  having regard to the request for consent submitted by the Council in accordance with Article 186, Article 218(6), second subparagraph, point (a), and Article 218(7) of the Treaty on the Functioning of the European Union (C7-0122/2012),

–  having regard to Rules 81, 90(7) and 46(1) of its Rules of Procedure,

–  having regard to the recommendation of the Committee on Industry, Research and Energy (A7-0267/2012),

1.  Consents to the conclusion of the Agreement;

2.  Instructs its President to forward its position to the Council, the Commission and the governments and parliaments of the Member States and of the People's Democratic Republic of Algeria.

European Parliament decision of 13 September 2012 on the conclusion of an interinstitutional agreement between the European Parliament and the Council concerning the forwarding to and handling by the European Parliament of classified information held by the Council on matters other than those in the area of the common foreign and security policy (2012/2069(ACI))

P7_TA(2012)0339 A7-0245/2012

The European Parliament,

–  having regard to the letter from its President of 10 April 2012,

–  having regard to the draft interinstitutional agreement between the European Parliament and the Council concerning the forwarding to and handling by the European Parliament of classified information held by the Council on matters other than those in the area of the common foreign and security policy,

–  having regard to the second paragraph of Article 1, Articles 2, 6, 10 and 11 of the Treaty on European Union (TEU) and Articles 15 and 295 of the Treaty on the Functioning of the European Union (TFEU),

–  having regard to Regulation (EC) No 1049/2001 of the European Parliament and of the Council of 30 May 2001 regarding public access to European Parliament, Council and Commission documents(1) and in particular Articles 2(5) and 9 thereof,

–  having regard to its resolution of 14 September 2011 on public access to documents (Rule 104(7)) for the years 2009-2010(2) and in particular paragraph 12 thereof,

–  having regard to Rule 23(12) and Rule 127(1) of, and Annex VIII to, its Rules of Procedure,

–  having regard to the report of the Committee on Constitutional Affairs (A7-0245/2012),

A.  whereas transparency and access to all relevant documents and information form the basis of, and are a compulsory precondition for, democracy and, in particular, enable the European Parliament to do its work for the people as provided for in the Treaties,

B.  whereas the Lisbon Treaty reinforces the requirements of transparency and the rights of citizens to participate in the decision-making of the Union; whereas limits on the right of Parliament and its Members to share relevant information with the public must constitute clearly framed and justified exceptions,

C.  whereas the principle of sincere cooperation between the European institutions is enshrined in the Treaties, specifically in Article 13(2) TEU,

D.  whereas Article 14(1) TEU states that the European Parliament shall, jointly with the Council, exercise legislative and budgetary functions and that it shall exercise functions of political control and consultation as laid down in the Treaties, and whereas, in order to exercise effectively the functions assigned to it by the Treaty, Parliament must have access to relevant Council documents,

E.  whereas the Treaties provide that the Council must consult Parliament and obtain its consent before certain legal acts can be adopted,

  F whereas Article 218(10) TFEU requires that Parliament be immediately and fully informed at all stages of the procedure relating to international agreements,

G.  whereas rules on classification and declassification of Union documents should be laid down by means of regulations adopted by the European Parliament and the Council on the basis of Article 15(3) TFEU(3),

H.  whereas the Framework Agreement on relations between the European Parliament and the European Commission(4) already lays down the rules concerning the forwarding of confidential information from the Commission to Parliament,

I.  whereas the decision of the Bureau of the European Parliament of 6 June 2011(5) lays down the rules governing the treatment of confidential information by the European Parliament,

J.  whereas the Conference of Presidents nominated a negotiating team to conduct talks with the Council of Ministers on three specific issues: the inclusion of correlation tables in Union directives, rules on Parliament's participation in international conferences and access to classified documents held by the Council; whereas the issues of correlation tables and of Parliament's participation in international conferences have meanwhile been settled(6),

1.  Considers the agreement concerning the forwarding to and handling by Parliament of classified information held by the Council on matters other than those in the area of the common foreign and security policy (‘the agreement’) to be an indispensable instrument enabling Parliament to fully exercise its powers and functions; points out that the agreement is without prejudice to the regulations on access to documents adopted in accordance with Article 15(3) TFEU;

2.  Points out that, while the scope of the agreement concerns classified information on matters other than those in the area of the common foreign and security policy, international agreements under Article 218(6) TFEU which do not relate exclusively to the common foreign and security policy ('mixed' agreements) are covered by the agreement, including any part thereof that falls under the common foreign and security policy; underlines, moreover, that access by Parliament to any classified information which relates exclusively to the common foreign and security policy will continue to be governed by arrangements under an ad hoc Council decision or under the Interinstitutional Agreement of 20 November 2002 concerning access by the European Parliament to sensitive information of the Council in the field of security and defence policy(7) (‘the 2002 Interinstitutional Agreement’) until other arrangements are agreed;

3.  Draws attention in that context to the statement by the European Parliament and the Council attached to the agreement, which states that a review of the 2002 Interinstitutional Agreement should begin in the course of 2012 and should take account of the experience gained in implementing both the agreement and the 2002 Interinstitutional Agreement;

4.  Deplores the fact that the 2002 Interinstitutional Agreement did not set out more clear-cut arrangements on access to classified information concerning the common foreign and security policy than the adoption of ad hoc decisions; stresses, therefore, that it is of the utmost importance that Parliament and the Council begin negotiations with a view to amending the 2002 Interinstitutional Agreement to reflect both the reforms carried out since it was concluded and the current situation;

5.  Welcomes the statement attached to the agreement concerning the classification of documents; regrets however that, unlike the Framework Agreement between the Commission and Parliament, the agreement does not lay down a detailed procedure to be followed in cases of doubt regarding the confidential nature of an item of information or its appropriate level of classification;

6.  Welcomes, in particular, the following aspects contained in the agreement:

7.  Invites the Bureau, in accordance with Rule 23(12) of Parliament's Rules of Procedure, to adapt its abovementioned decision of 6 June 2011 to take account of the agreement;

8.  Approves conclusion of the agreement in the form annexed hereto and decides to annex it to its Rules of Procedure;

9.  Instructs its President to sign the agreement with the President of the Council;

10.  Instructs its President to forward this decision, including its annex, to the Council and the Commission, for information.

ANNEX

INTERINSTITUTIONAL AGREEMENT between the European Parliament and the Council concerning the forwarding to and handling by the European Parliament of classified information held by the Council on matters other than those in the area of the Common Foreign and Security Policy

THE EUROPEAN PARLIAMENT AND THE COUNCIL,

Whereas:

(1)  Article 14(1) of the Treaty on European Union (TEU) provides that the European Parliament jointly with the Council, is to exercise legislative and budgetary functions and that it is to exercise functions of political control and consultation as laid down in the Treaties.

(2)  Article 13(2) TEU provides that each institution is to act within the limits of the powers conferred on it in the Treaties, and in conformity with the procedures, conditions and objectives set out in them. That provision also stipulates that the institutions are to practice mutual sincere cooperation. Article 295 of the Treaty on the Functioning of the European Union (TFEU) provides that the European Parliament and the Council, inter alia, are to make arrangements for their cooperation and that, to that end, they may, in compliance with the Treaties, conclude interinstitutional agreements which may be of a binding nature.

(3)  The Treaties and, as appropriate, other relevant provisions provide that either in the context of a special legislative procedure or under other decision-making procedures, the Council is to consult or obtain the consent of the European Parliament before adopting a legal act. The Treaties also provide that, in certain cases, the European Parliament is to be informed about the progress or the results of a given procedure or be involved in the evaluation or the scrutiny of certain Union agencies.

(4)  In particular, Article 218(6) TFEU provides that, except where an international agreement relates exclusively to the common foreign and security policy, the Council is to adopt the decision concluding the agreement in question after obtaining the consent of or consulting the European Parliament; all such international agreements which do not relate exclusively to the common foreign and security policy are therefore covered by this Interinstitutional Agreement.

(5)  Article 218(10) of the TFEU provides that the European Parliament is to be immediately and fully informed at all stages of the procedure; that provision also applies to agreements relating to the common foreign and security policy.

(6)  In cases where implementation of the Treaties and, as appropriate, other relevant provisions would require access by the European Parliament to classified information held by the Council, appropriate arrangements governing such access should be agreed upon between the European Parliament and the Council.

(7)  Where the Council decides to grant the European Parliament access to classified information held by the Council in the area of the common foreign and security policy, it either takes ad hoc decisions to that effect or uses the Interinstitutional Agreement of 20 November 2002 between the European Parliament and the Council concerning access by the European Parliament to sensitive information of the Council in the field of security and defence policy(8) (hereinafter ‘the Interinstitutional Agreement of 20 November 2002’), as appropriate.

(8)  The Declaration by the High Representative on political accountability(9), made upon the adoption of Council Decision 2010/427/EU of 26 July 2010 establishing the organisation and functioning of the European External Action Service(10), states that the High Representative will review and where necessary propose to adjust the existing provisions on access for Members of the European Parliament to classified documents and information in the field of security and defence policy (i.e. the Interinstitutional Agreement of 20 November 2002).

(9)  It is important that the European Parliament be associated with the principles, standards and rules for protecting classified information which are necessary in order to protect the interests of the European Union and of the Member States. Moreover, the European Parliament will be in a position to provide classified information to the Council.

(10)  On 31 March 2011 the Council adopted Decision 2011/292/EU on the security rules for protecting EU classified information(11) (hereinafter ‘the Council's security rules’).

(11)  On 6 June 2011, the Bureau of the European Parliament adopted a Decision concerning the rules governing the treatment of confidential information by the European Parliament(12) (hereinafter ‘the European Parliament's security rules’).

(12)  The security rules of Union institutions, bodies, offices or agencies should together constitute a comprehensive and coherent general framework within the European Union for protecting classified information, and should ensure equivalence of basic principles and minimum standards. The basic principles and minimum standards laid down in the European Parliament's security rules and in the Council's security rules should accordingly be equivalent.

(13)  The level of protection afforded to classified information under the European Parliament's security rules should be equivalent to that afforded to classified information under the Council's security rules.

(14)  The relevant services of the European Parliament's Secretariat and of the General Secretariat of the Council will cooperate closely to ensure that equivalent levels of protection are applied to classified information in both institutions.

(15)  This Agreement is without prejudice to existing and future rules on access to documents adopted in accordance with Article 15(3) TFEU; rules on the protection of personal data adopted in accordance with Article 16(2) TFEU; rules on the European Parliament's right of inquiry adopted in accordance with third paragraph of Article 226 TFEU; and relevant provisions relating to the European Anti-Fraud Office (OLAF),

HAVE AGREED AS FOLLOWS:

Article 1

Purpose and scope

Article 2

Definition of ‘classified information’

Article 3

Protection of classified information

1.  The European Parliament shall protect, in accordance with its security rules and with this Agreement, any classified information provided to it by the Council.

2.  As equivalence is to be maintained between the basic principles and minimum standards for protecting classified information laid down by the European Parliament and by the Council in their respective security rules, the European Parliament shall ensure that the security measures in place in its premises afford a level of protection to classified information equivalent to that afforded to such information on Council premises. The relevant services of the European Parliament and the Council shall cooperate closely to that effect.

3.  The European Parliament shall take the appropriate measures to ensure that classified information provided to it by the Council shall not:

4.  The Council may grant the European Parliament access to classified information which originates in other Union institutions, bodies, offices or agencies, or in Member States, third States or international organisations only with the prior written consent of the originator.

Article 4

Personnel security

1.  Access to classified information shall be granted to Members of the European Parliament in accordance with Article 5(4).

2.  Where the information concerned is classified at the level CONFIDENTIEL UE/EU CONFIDENTIAL, SECRET UE/EU SECRET or TRÈS SECRET UE/EU TOP SECRET or its equivalent, access may be granted only to Members of the European Parliament authorised by the President of the European Parliament:

Notwithstanding the first subparagraph, where the information concerned is classified at the level CONFIDENTIEL UE/EU CONFIDENTIAL or its equivalent, access may also be granted to those Members of the European Parliament determined in accordance with Article 5(4) who have signed a solemn declaration of non-disclosure in accordance with the European Parliament's security rules. The Council shall be informed of the names of the Members of the European Parliament granted access under this subparagraph.

3.  Before being granted access to classified information, Members of the European Parliament shall be briefed on and acknowledge their responsibilities to protect such information in accordance with the European Parliament's security rules, and briefed on the means of ensuring such protection.

4.  Access to classified information shall be granted only to those officials of the European Parliament and other Parliament employees working for political groups who:

Article 5

Procedure for accessing classified information

1.  The Council shall provide classified information as referred to in Article 1 to the European Parliament where it is under a legal obligation to do so pursuant to the Treaties or to legal acts adopted on the basis of the Treaties. The parliamentary bodies or office-holders referred to in paragraph 3 may also present a written request for such information.

2.  In other cases, the Council may provide classified information as referred to in Article 1 to the European Parliament either at its own initiative or on written request from one of the parliamentary bodies or office-holders referred to in paragraph 3.

3.  The following parliamentary bodies or office-holders may present written requests to the Council:

Requests from other Members of the European Parliament shall be made via one of the parliamentary bodies or office-holders referred to in the first subparagraph.

The Council shall respond to such requests without delay.

4.  Where the Council is under a legal obligation to, or has decided to, grant the European Parliament access to classified information, it shall determine the following in writing before that information is forwarded, together with the relevant body or office-holder as listed in paragraph 3:

Article 6

Registration, storage, consultation and discussion of classified information in the European Parliament

1.  Classified information provided by the Council to the European Parliament, where it is classified at the level CONFIDENTIEL UE/EU CONFIDENTIAL, SECRET UE/EU SECRET or TRÈS SECRET UE/EU TOP SECRET or its equivalent:

2.  Classified information provided by the Council to the European Parliament, where it is classified at the level RESTREINT UE/EU RESTRICTED or its equivalent, shall be handled and stored in accordance with the European Parliament's security rules which shall afford a level of protection for such classified information equivalent to that of the Council.

Notwithstanding the first subparagraph, for a period of 12 months following the entry into force of this Agreement, information classified at the level RESTREINT UE/EU RESTRICTED or its equivalent shall be handled and stored in accordance with paragraph 1. Access to such classified information shall be governed by points (a) and (c) of Article 4(4) and by Article 5(4).

3.  Classified information may be handled only on communication and information systems which have been duly accredited or approved in accordance with standards equivalent to those laid down in the Council's security rules.

4.  Classified information provided orally to recipients in the European Parliament shall be subject to the equivalent level of protection as that afforded to classified information in written form.

5.  Notwithstanding point (c) of paragraph 1 of this Article, information classified up to the level of CONFIDENTIEL UE/EU CONFIDENTIAL or its equivalent provided by the Council to the European Parliament may be discussed at meetings held in camera and attended only by Members of the European Parliament and those officials of the European Parliament and other Parliament employees working for political groups who have been granted access to the information in accordance with Article 4(4) and Article 5(4). The following conditions shall apply:

6.  Where meetings are necessary to discuss information classified at the level SECRET UE/EU SECRET or TRÈS SECRET UE/EU TOP SECRET or its equivalent, specific arrangements shall be agreed on a case-by-case basis between the European Parliament and the Council.

Article 7

Breach of security, loss or compromise of classified information

1.  In the case of a proven or suspected loss or compromise of classified information provided by the Council, the Secretary-General of the European Parliament shall immediately inform the Secretary-General of the Council thereof. The Secretary-General of the European Parliament shall conduct an investigation and shall inform the Secretary-General of the Council of the results of the investigation and of measures taken to prevent a recurrence. Where a Member of the European Parliament is concerned, the President of the European Parliament shall act together with the Secretary-General of the European Parliament.

2.  Any Member of the European Parliament who is responsible for a breach of the provisions laid down in the European Parliament's security rules or in this Agreement may be liable to measures and penalties in accordance with Rules 9(2) and 152 to 154 of the European Parliament's Rules of Procedure.

3.  Any official of the European Parliament or other Parliament employee working for a political group who is responsible for a breach of the provisions laid down in the European Parliament's security rules or in this Agreement may be liable to the penalties set out in the Staff Regulations of Officials and the Conditions of Employment of Other Servants of the European Union, laid down in Council Regulation (EEC, Euratom, ECSC) No 259/68(13).

4.  Persons responsible for losing or compromising classified information may be liable to disciplinary and/or legal action in accordance with the applicable laws, rules and regulations.

Article 8

Final provisions

1.  The European Parliament and the Council, each for its own part, shall take all necessary measures to ensure implementation of this Agreement. They shall cooperate to that effect, in particular by organising visits to monitor the implementation of the security-technical aspects of this Agreement.

2.  The relevant services of the European Parliament's Secretariat and of the General Secretariat of the Council shall consult each other before either institution modifies its respective security rules, in order to ensure that equivalence of basic principles and minimum standards for protecting classified information is maintained.

3.  Classified information shall be provided to the European Parliament under this Agreement once the Council, together with the European Parliament, has determined that equivalence has been achieved between the basic principles and minimum standards for protecting classified information in the European Parliament's and in the Council's security rules, on the one hand, and between the level of protection afforded to classified information in the premises of the European Parliament and of the Council, on the other.

4.  This Agreement may be reviewed at the request of either institution in the light of experience in implementing it.

5.  This Agreement shall enter into force on the date of its publication in the Official Journal of the European Union.

Done at … on …

For the European Parliament For the Council

The President The President

STATEMENTS

(a)  Statement by the European Parliament and the Council on Article 8(3)

The European Parliament and the Council will cooperate so that the determination referred to in Article 8(3) of the Interinstitutional Agreement of ...(14) between the European Parliament and the Council concerning the forwarding to and handling by the European Parliament of classified information held by the Council on matters other than those in the area of the common foreign and security policy can be made by the date of entry into force of that Agreement.

(b)  Statement by the European Parliament and the Council on the classification of documents

The European Parliament and the Council recall that the underclassification or overclassification of documents undermines the credibility of security rules.

The Council will continue to ensure that the correct level of classification is applied to information originating within the Council in accordance with its security rules. The Council will review the level of classification of any document before forwarding it to the European Parliament, in particular to verify whether such level of classification is still appropriate.

The European Parliament will protect any classified information provided to it in a manner commensurate with its level of classification. In the event of it requesting whether a classified document provided by the Council may be downgraded or declassified, such downgrading or declassification may occur only with the prior written consent of the Council.

(c)  Statement by the European Parliament and the Council on access to classified information in the area of the common foreign and security policy

Recalling the Declaration by the High Representative on political accountability(15), the European Parliament and the Council consider that a review of the Interinstitutional Agreement of 20 November 2002 between the European Parliament and the Council concerning access by the European Parliament to sensitive information of the Council in the field of security and defence policy(16) should begin in the course of 2012.

This review will be undertaken respecting the specific role of the European Parliament in the area of the common foreign and security policy and taking account of experience gained in implementing both the Interinstitutional Agreement of ...(17) between the European Parliament and the Council concerning the forwarding to and handling by the European Parliament of classified information held by the Council on matters other than those in the area of the common foreign and security policy and the above-mentioned Interinstitutional Agreement of 20 November 2002.

Pending completion of this review, where the Council decides to grant the European Parliament access to classified information held by the Council in the area of the common foreign and security policy, it proceeds as described in recital 7 of the Interinstitutional Agreement of ...(18) between the European Parliament and the Council concerning the forwarding to and handling by the European Parliament of classified information held by the Council on matters other than those in the area of the common foreign and security policy and in accordance with paragraph 2 of the Declaration by the High Representative referred to above.

The European Parliament and the Council agree that the implementation of this statement will take duly into account the specific nature and the especially sensitive content of information in the area of the common foreign and security policy.

(d)  Statement by the Council on unclassified Council documents

The Council confirms that the Interinstitutional Agreement of ...(19) between the European Parliament and the Council concerning the forwarding to and handling by the European Parliament of classified information held by the Council on matters other than those in the area of the common foreign and security policy does not apply to unclassified documents internal to the Council (i.e. those marked ‘LIMITÉ’).

(e)  Statement by the European Parliament on classified information held by the Commission

The European Parliament underlines that classified information of which the European Commission is the originator and/or which is forwarded to the European Parliament by the European Commission shall be forwarded and handled in accordance with the provisions set out in the Framework Agreement of 20 October 2010 on relations between the European Parliament and the European Commission(20).

(1) OJ L 145, 31.5.2001, p. 43. (2) Texts adopted, P7_TA(2011)0378. (3) See also in this context Parliament's position of 15 December 2011 on the proposal for a regulation of the European Parliament and of the Council regarding public access to European Parliament, Council and Commission documents (recast) (P7_TA(2011)0580) and its above-mentioned resolution of 14 September 2011 on public access to documents (Rule 104(7)) for the years 2009-2010. (4) OJ L 304, 20.11.2010, p. 47. (5) OJ C 190, 30.6.2011, p. 2. (6) For correlation tables, see the Joint Political Declaration of the European Parliament, the Council and the Commission on explanatory documents annexed to Parliament's legislative resolution of 27 October 2011 on the proposal for a directive of the European Parliament and of the Council on minimum standards for the qualification and status of third country nationals or stateless persons as beneficiaries of international protection and the content of the protection granted (recast) (P7_TA(2011)0469); as regards Parliament's participation, the matter was concluded by way of an exchange of letters. (7) OJ C 298, 30.11.2002, p. 1. (8) OJ C 298, 30.11.2002, p. 1. (9) OJ C 210, 3.8.2010, p. 1. (10) OJ L 201, 3.8.2010, p. 30. (11) OJ L 141, 27.5.2011, p. 17. (12) OJ C 190, 30.6.2011, p. 2. (13) OJ L 56, 4.3.1968, p. 1. (14) * Date of signature of the Interinstitutional Agreement. (15) OJ C 210, 3.8.2010, p. 1. (16) OJ C 298, 30.11.2002, p. 1. (17) * Date of signature of the Interinstitutional Agreement. (18) * Date of signature of the Interinstitutional Agreement. (19) * Date of signature of the Interinstitutional Agreement. (20) OJ L 304, 20.11.2010, p. 47.

European Parliament resolution of 13 September 2012 on the 18th report on Better legislation - Application of the principles of subsidiarity and proportionality (2010) (2011/2276(INI))

P7_TA(2012)0340 A7-0251/2012

The European Parliament,

–  having regard to the Interinstitutional Agreement on better law-making(1),

–  having regard to the Joint Political Declaration of the Member States and the Commission of 28 September 2011 on explanatory documents(2),

–  having regard to the Joint Political Declaration of the European Parliament, the Council and the Commission of 27 October 2011 on explanatory documents(3),

–  having regard to the practical arrangements agreed on 22 July 2011 between the competent services of the European Parliament and the Council for the implementation of Article 294(4) TFEU in the event of agreements at first reading,

–  having regard to its resolution of 14 September 2011 on better legislation, subsidiarity and proportionality and smart regulation(4),

–  having regard to its resolution of 14 September 2011 on the twenty-seventh annual report on monitoring the application of European Union law(5),

–  having regard to its resolution of 8 June 2011 on guaranteeing independent impact assessments(6),

–  having regard to the Commission report on subsidiarity and proportionality (18th report on Better Lawmaking covering the year 2010) (COM(2011)0344),

–  having regard to the Commission report on minimising regulatory burdens for SMEs - Adapting EU regulation to the needs of micro-enterprises (COM(2011)0803),

–  having regard to the Commission communication on the 28th annual report on monitoring the application of EU law (2010) (COM(2011)0588),

–  having regard to the Commission communication on Smart Regulation in the European Union (COM(2010)0543),

–  having regard to the conclusions of the Competitiveness Council of 5 December 2011 on impact assessment,

–  having regard to the conclusions of the Competitiveness Council of 30 May 2011 on smart regulation,

–  having regard to the report of 15 November 2011 of the High Level Group of Independent Stakeholders on Administrative Burdens, entitled ’Europe can do better: Report on the best practices in the Member States to implement EU legislation in the least burdensome way’,

–  having regard to Rule 48 of its Rules of Procedure,

–  having regard to the report of the Committee on Legal Affairs and the opinion of the Committee on Constitutional Affairs (A7-0251/2012),

A.  whereas in 2010 the European Parliament received more than seven times as many contributions as reasoned opinions from national parliaments;

B.  whereas the smart regulation agenda constitutes an attempt to consolidate efforts in terms of better lawmaking, simplification of EU law and the reduction of administrative and regulatory burdens, and to embark on a path towards good governance based on evidence-based policymaking in which impact assessments and ex post controls play an essential role;

C.  whereas the Interinstitutional Agreement on better lawmaking of 2003 has become ill-suited to the current legislative environment as created by the Treaty of Lisbon, not least in view of the piecemeal approach taken by the EU institutions in terms of adopting joint political declarations on explanatory documents and secretariat-level practical arrangements for the implementation of Article 294 TFEU;

D.  whereas an incorrect choice between using delegated acts under Article 290 TFEU or implementing acts under Article 291 TFEU in a legislative act subjects it to the risk of being annulled by the Court of Justice;

General comments

1.  Underlines the overarching need for legislation to be clear, simple, easy to understand and accessible to all;

2.  Stresses that the principles of subsidiarity and proportionality must be respected by the European institutions when legislating;

3.  Expresses its deep concern regarding the Impact Assessment Board's view that the Commission's consideration of these principles in its impact assessments are is often unsatisfactory in nature; considers it of the utmost importance that the Commission address any deficiencies in this area in order to ensure that these principles are respected;

4.  Reiterates its repeated calls for the 2003 Interinstitutional Agreement on Better Lawmaking to be renegotiated in order to take account of the new legislative environment created by the Treaty of Lisbon, consolidate current best practice and bring the agreement up to date in line with the smart regulation agenda; suggests that arrangements concerning the demarcation between delegated and implementing acts be agreed in that context; asks its President to take the necessary steps to open negotiations with the other institutions;

Subsidiarity control by national parliaments

5.  Welcomes the closer involvement of the national parliaments in the European legislative process, particularly with regard to scrutinising legislative proposals in the light of the principles of subsidiarity and proportionality;

6.  Notes that in 2010 211 opinions were received from national parliaments but that only a small number of them – 34 in all – raised subsidiarity concerns; points out that the conditions of Article 2, first sentence, of the Protocol on the application of the principles of subsidiarity and proportionality were fulfilled for the first time in May 2012 in connection with the proposal for a Council regulation on the exercise of the right to take collective action within the context of the freedom of establishment and the freedom to provide services (COM(2012)0130); calls on the Commission, in this connection, to carry out the necessary review of the draft with the utmost regard for the express will of the national parliaments, as the new scrutinising procedure is intended to ensure that decisions are taken as closely to the citizens as possible;

7.  Calls for an independent analysis to be carried out on behalf of the Commission to examine the role of regional or local parliaments in the area of subsidiarity controls; points, in this context, to the IPEX internet platform, financed by the European Parliament and national parliaments, which is particularly helpful for exchanging information in connection with the scrutinising procedures;

8.  Suggests that the institutions involved in lawmaking should be reminded of the need to ensure that the principles of subsidiarity and proportionality are correctly applied under the terms of Protocol No 2 annexed to the Treaty on the Functioning of the European Union;

9.  Notes that the criticism made by the Impact Assessment Board concerning consideration of subsidiarity was also made by a number of national parliaments in their submissions under the subsidiarity control mechanism introduced in the Treaty of Lisbon; further notes, however, that on no occasion in 2010 was the threshold for activating the formal procedures under Protocol No 2, as annexed to the Treaties, reached;

10.  Notes, however, that on 22 May 2012, for the first time since the entry into force of the Lisbon Treaty, national parliaments triggered the ’yellow card’ procedure by adopting reasoned opinions opposing the Commission proposal for a Council regulation on the exercise of the right to take collective action within the context of the freedom of establishment and the freedom to provide services (COM(2012)0130);

11.  Notes with concern that some opinions from national parliaments highlight the fact that in a number of Commission proposals the subsidiarity justification is insufficient or non-existent;

12.  Highlights the need for the European institutions to make it possible for national parliaments to scrutinise legislative proposals by ensuring that the Commission provides detailed and comprehensive grounds for its decisions on subsidiarity and proportionality, in accordance with Article 5 of Protocol No 2 to the Treaty on the Functioning of the European Union (TFEU);

13.  Suggests that an assessment be made to determine whether appropriate criteria should be laid down at EU level for evaluating compliance with the principles of subsidiarity and proportionality;

14.  Considers that the current timescales laid down in the Treaties for national parliaments to carry out subsidiarity checks should be reviewed to determine whether they are sufficient; suggests that the EP, the Commission and representatives of the national parliaments investigate how any impediments to national parliaments’ participation in the subsidiarity control mechanism might be alleviated;

15.  Recalls that, in accordance with the principle of subsidiarity, the EU shall take action outside its areas of exclusive competence only and insofar as the objectives of a planned measure can be better achieved at Union level than at national, regional or local level; subsidiarity may, therefore, lead both to an extension of the activities of the Union within the framework of its powers when circumstances so require and, conversely, to the action concerned being restricted or curtailed where it is no longer justified; emphasises that subsidiarity, in this context, not only applies to the relationship between the EU and its Member States but also encompasses the regional and local levels;

16.  Urges the Commission to improve and regularise the statements which justify its legislative initiatives on the grounds of subsidiarity; recalls that EU administrative law should be adjusted and simplified in order to reduce administrative and regulatory costs; considers that, in this context, the principles of subsidiarity and proportionality should be applied accordingly;

17.  Regrets that the Commission has not properly reported on the application of the principle of proportionality, especially with regard to the use of Articles 290 and 291 TFEU on delegated and implementing acts; warns the Council not to blur the clear distinction between delegated and implementing acts; urges the Commission to ensure the proper application of these two articles;

18.  Recognises that there has been only one judgment by the European Court of Justice on proportionality and subsidiarity in the reporting period (on ’roaming’ in mobile telephony), noting that the Court found that there was no breach of either of those two principles in that case, since it was necessary to limit prices for final consumers in order to protect their interests, and as this objective was best achieved at Union level;

19.  Welcomes, in this regard, the introduction of the above-mentioned revised IPEX website, which can act as a catalyst for further improvements and engagement in the operation of the subsidiarity control mechanism, and stresses the need to promote this site further;

20.  Emphasises that it is essential for scrutiny of the principle of subsidiarity to extend to the regional and local levels in the Member States; welcomes, in this regard, the Subsidiarity Annual Report published by the Committee of the Regions and the REGPEX website set up by the Committee, both of which assist the exchange of information and will make for further improvements in the monitoring of subsidiarity;

21.  Calls on the national parliaments, in accordance with the Subsidiarity Protocol, to consult the regional parliaments with legislative powers; calls on the Commission, in the scrutiny of subsidiarity and particularly in its annual reports on subsidiarity and proportionality, to pay attention to the role of the regional parliaments with legislative powers;

Evidence-based policymaking

22.  Stresses the importance of the smart regulation agenda and of developing new regulatory approaches in order to ensure that EU legislation is fit for its purpose and can effectively contribute to facing future challenges of competitiveness and growth;

23.  Notes the crucial importance of impact assessments as tools for aiding decision-making in the legislative process, and stresses the need, in this context, for proper consideration to be given to issues relating to subsidiarity and proportionality;

24.  Emphasises Parliament's commitment to its obligations under the smart regulation agenda, and encourages use of Parliament's Impact Assessment Directorate by committees engaging in legislative work as a matter of routine; recalls the commitment made by Parliament and Council in the 2005 Interinstitutional Common Approach to Impact Assessment to carry out impact assessments prior to the adoption of substantive amendments, and calls on the committees to make use of the new Impact Assessment Directorate in implementing this commitment;

25.  Suggests that as part of a more systematic approach to the consideration of impact assessments within Parliament, the Impact Assessment Directorate should be asked by committees to prepare a short summary of each impact assessment for consideration when an initial exchange of views is held; suggests that this summary could include a brief conclusion as to the quality of the impact assessment, together with a short note on the key findings and any areas of analysis omitted by the Commission; is of the view that this would greatly enhance the scrutiny of draft legislation by Parliament;

26.  Considers it essential that the methodologies applied by the Impact Assessment Directorate are compatible and comparable with the approach adopted by the Commission, and calls on Parliament and the Commission to cooperate fully in this regard;

27.  Recalls the 2003 Interinstitutional Agreement on Better Lawmaking, and encourages the Council to complete work on establishing its own mechanism for undertaking impact assessments without undue delay, in compliance with its obligations under the 2003 agreement;

28.  Encourages the Commission to continue improving its own approach to impact assessments, and calls on it to strengthen the role of the Impact Assessment Board and, in particular, only to finalise and present legislative proposals where they have been approved with a favourable opinion from the Board;

Minimising regulatory burdens

29.  Welcomes the Commission's communication on minimising regulatory burdens for SMEs; considers it essential that the Commission respects the ’think small first’ principle when preparing legislation, and is encouraged by the commitment shown by the Commission and its desire to go beyond present approaches and introduce lighter regimes and exemptions for smaller businesses;

30.  Recalls Parliament's position on the issue of regulatory exemptions, and urges the Commission to extend exemption to SMEs where regulatory provisions would disproportionately affect them and there is no sound reason for including them in the scope of the legislation; welcomes the renewed focus on a robust application of the SME test, and sees the micro-dimension as an inherent part of that test in which all available options are systematically assessed; in this regard welcomes the Commission's position regarding inclusion of micro-entities, which should only be included to the full extent in the scope of draft legislation if they satisfy the strengthened SME test;

31.  Reminds the Commission, however, that the reversal of the burden of proof should not automatically lead to more complex legislation which has been developed without SMEs in mind; calls on the Commission to strive for the simplification of legislation wherever possible, and to continue to prepare and present proposals with accessibility and ease of implementation for SMEs as guiding principles in the drafting of legislation, even where an exemption may apply;

32.  Stresses the need for the Commission to ensure consistent application of the enhanced SME test across its directorates, and calls on Member States to include similar considerations in their national decision-making processes;

33.  Welcomes the ’tailor-made’ approach to legislation proposed by the Commission; calls for consideration to be given to possible future application of ’tailor-made’ approaches when existing legislation is reviewed;

Follow-up, ex post controls and feedback into the policymaking cycle

34.  Welcomes the Commission's adoption of Parliament's recommendation on publication of information concerning implementation, thus addressing the problem of ’gold-plating’; reminds the Commission and the Council that in order to ensure that existing and future programmes to reduce burdens are successful, active cooperation between the Commission and the Member States is necessary, so as to avoid discrepancies in the interpretation and implementation of legislation; urges Member States to reduce their administrative burden by a further 25% by 2015;

35.  Considers the proposals to ’name and shame’ European institutions which backtrack on simplification to be well-intentioned; believes, however, that a more constructive engagement in the pre-legislative process with relevant stakeholders and the institutions, together with adherence to the general commitments to simplification and the smart regulation agenda, would render such publicity unnecessary; suggests, nonetheless, that those Member States which engage the most in the ’gold-plating’ of directives should be named, alongside those which are the biggest offenders when it comes to late, imprecise or incomplete transposition of EU law;

36.  Recalls its previous statements concerning the need for a comprehensive review of the consultation process undertaken by the Commission, and looks forward to the Commission adopting Parliament's recommendations in this area before the end of 2012;

Ensuring continuity and vigilance

37.  Underlines the importance of these measures as a key element for renewed economic growth in the EU; recalls, in this regard, its resolution on smart regulation, and invites the Commission to put forward proposals implementing regulatory offsetting, which would require equivalent cost offsets to be identified in advance of new legislation that would introduce costs being imposed; recalls, furthermore, its position in favour of extending and expanding the scope of the Administrative Burden Reduction Programme, and urges the Commission to introduce, in its 2013 Work Programme, a programme which addresses the need to reduce the overall regulatory burden;

o
o   o

38.  Instructs its President to forward this resolution to the Council, the Commission and the national parliaments.

(1) OJ C 321, 31.12.2003, p. 1. (2) OJ C 369, 17.12.2011, p. 14. (3) OJ C 369, 17.12.2011, p. 15. (4) Texts adopted, P7_TA(2011)0381. (5) Texts adopted, P7_TA(2011)0377. (6) Texts adopted, P7_TA(2011)0259.

European Parliament resolution of 13 September 2012 on the EU Cohesion Policy Strategy for the Atlantic Area (2011/2310(INI))

P7_TA(2012)0341 A7-0222/2012

The European Parliament,

–  having regard to Article 225 of the Treaty on the Functioning of the European Union,

–  having regard to the communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions entitled ’Developing a Maritime Strategy for the Atlantic Ocean Area’ (COM(2011)0782),

–  having regard to the conclusions adopted by the Council on 14 June 2010 concerning the European Union strategy for the Atlantic area,

–  having regard to the European Union Strategies for the Baltic Sea Region and the Danube Region,

–  having regard to its resolution of 9 March 2011 on the European Strategy for the Atlantic Region(1),

–  having regard to the opinion of the European Economic and Social Committee on the Commission communication entitled ’Developing a Maritime Strategy for the Atlantic Ocean Area’ (ECO/306),

–  having regard to the opinion of the Committee of the Regions on the Commission communication entitled ’Developing a Maritime Strategy for the Atlantic Ocean Area’,

–   having regard to its resolution of 23 June 2011 on Objective 3: future agenda for cross-border, transnational and interregional cooperation(2),

–  having regard to Rule 48 of its Rules of Procedure,

–  having regard to the report of the Committee on Regional Development and the opinion of the Committee on Transport and Tourism (A7-0222/2012),

A.  whereas the Atlantic area has a number of defining characteristics that require political answers at European level:

B.  whereas the situation has become worse as a result of the European crisis and many regions in the Atlantic area have suffered setbacks in their levels of development;

C.  whereas the Atlantic area is composed of a rather disparate collection of regions, many of which have still not reached the EU's average income level and thus remain under the convergence objective for the purposes of European cohesion policy;

D.  whereas a macroregional strategy is essential in order to revitalise the Atlantic area by offering a common approach, for the purposes of:

E.  whereas the strategy should cover all the EU's Atlantic regions, including the coastal regions of the English Channel and the Irish Sea, the outermost regions and the overseas countries and territories, and should take into account the interactions between Atlantic regions and North Sea regions;

F.  whereas we must secure environmentally, socially and economically sustainable development for the above regions;

A spatial planning policy for the Atlantic

1.  Hopes that the strategy will adopt a broad approach by setting out an agreed strategic vision for the future development of the Atlantic area, incorporating the territorial dimension, developing linkages between land and sea, and establishing a framework to better manage maritime and terrestrial planning policy in the Atlantic regions;

2.  Requests that the valuable lessons learned from the development of existing macroregional and other transnational strategies be taken fully on board in the Atlantic Strategy process, particularly on issues such as governance, policy development, communication and ownership, targets and evaluation;

3.  Believes that cohesion policy is a key instrument for tackling the challenges of the EU's territorial policy and boosting endogenous development in the regions within the macroregion;

4.  Calls for the Strategy and its Action Plan to place a strong emphasis on jobs, growth and investment in regions, both maritime and inland;

5.  Calls for the creation of a permanent maritime spatial planning structure for the Atlantic area, comprising the regions and Member States concerned and the Commission, for the purposes of coordinating the strategy laid down and monitoring the implementation of the action plan from an intersectoral and transnational perspective;

6.  Considers an EU-wide integrated marine and maritime data management system to be of crucial importance with a view to taking advantage of maritime opportunities; calls on the Commission to continue its efforts to improve data management and accessibility;

7.  Considers that vigorous action is needed to safeguard the ecological balance and biodiversity of the Atlantic and reduce the carbon footprint in that area;

8.  Believes that sea-fishing, in particular small-scale and coastal fisheries, and aquaculture activities must play a key role in maritime planning policies, since they could make a decisive contribution to more vigorous economic growth and to wealth and job creation; takes the view that the regionalisation of the common fisheries policy should result in the introduction of an ecosystem-based management approach tailored to the needs of the Atlantic area, and in this connection asks the Commission to engage in prior consultations with the Regional Advisory Councils (RACs) in the context of the implementation of the common fisheries policy and the management plans;

9.  Calls for local, regional and crossborder partnerships to be set up with the aim of improving risk prevention and risk management capacities in the Atlantic in connection with maritime and land-based accidents, natural disasters and criminal activities (piracy, trafficking, illegal fishing, etc), and for sufficient and flexible mechanisms to be created to cover replacement and compensation for damage incurred; calls for a European coastguard service to be established;

10.  Calls for the improvement of the existing vessel monitoring systems, immediate application of EMSA's strengthened powers, and the conclusion of data-sharing agreements between the competent authorities, in order to permit the identification and tracking of ships and fight threats such as crossborder crime, smuggling, illegal fishing and trafficking; stresses the importance of promoting the deployment and implementation of the European satellite navigation programmes (EGNOS and Galileo), in order to cover search and rescue support systems in the Atlantic; recalls the need to ensure long-term financing by the Union of the Global Monitoring for Environment and Security (GMES) programme, which contributes in particular to the prevention and management of maritime risks;

11.  Considers that the territorial dimension of the strategy is essential for purposes of making the Atlantic regions more accessible, and that it should focus on linking the Atlantic area with the European mainland, connecting the transport, energy and information networks, developing the rural and urban parts of the hinterland, and improving the land-sea links, including the outermost and island regions;

12.  Believes that the motorways of the sea help to provide access to the Atlantic regions, increase trade, stimulate port-based economic activity, encourage tourism and reduce CO2 emissions; considers it important that CO2 emission reduction measures should allow for Atlantic seaborne trade and the specific features of the outermost regions, where the carriage of goods and passengers by sea is vital for territorial, social, and economic cohesion in the true sense; calls for the motorways of the sea to be eligible for support under the Connecting Europe Facility;

13.  Encourages, for the sake of the sustainability of the motorways of the sea and in line with the Europe 2020 Strategy, the establishment of specific recommendations concerning vessels, with a view to promoting the inclusion of propulsion systems with low carbon emissions and the use of building criteria that are demanding in terms of efficiency, comfort, capacity, safety, location and telecommunications; stresses that such recommendations should focus on increasing the efficiency of this mode of transport, ensuring environmental preservation and facilitating this mode's integration with other transport networks and modes;

14.  Considers it essential to improve the connections between the Atlantic regions and the rest of Europe through investment in multimodal transport infrastructures;

15.  Stresses the need for effective crossborder coordination and cooperation for the construction and use of road and rail infrastructures, including high-speed train lines, airports, seaports, inland ports, hinterland terminals and logistics, with a view to developing a more sustainable and multimodal transport system;

16.  Emphasises the economic and territorial importance of ports and believes that the existence of rail and inland waterway connections with their hinterlands is crucial for their ability to compete;

17.  Regrets that there is no corridor covering the whole of the Atlantic area in the Commission proposals on the core network of trans-European transport networks, and that too few Atlantic ports are proposed in this core network; considers it necessary to include other Atlantic ports as hub ports and intends to put forward proposals to this effect;

18.  Recalls the benefits of creating a Single European Sky, with a view to strengthening territorial cohesion via increased traffic between regional airports within the Union, and therefore calls on the Commission to ensure the use of functional airspace blocks within the deadlines set for achieving this objective;

An industrial policy for the Atlantic

19.  Hopes that the strategy will support the competitiveness of the dynamic economic sectors in the Atlantic regions, through an appropriate industrial policy; believes, in this regard, that private-sector investment should be supported by the public authorities in the areas of research and development, innovation, cluster development and SME support;

20.  Calls for particular attention to be paid to regions affected by the restructuring of enterprises and sectors, and by the closure or relocation of enterprises, with the aim of promoting their reindustrialisation by generating synergies between port activity, logistics and the development of ancillary industries offering greater added value; also calls for a mechanism to be created for exchanging successful industrial practices among Atlantic Arc regions;

21.  Considers that the strategy should encourage marine and maritime research and give businesses easier access to the findings of that research, with a view to improving scientific knowledge of the marine environment, encouraging innovation in maritime industries and allowing the sustainable exploitation of marine resources;

22.  Is of the opinion that the strategy should contain an ambitious social dimension in order to promote training and access for young people to maritime professions, by consolidating employment structures currently linked to the sea and their role in enabling the population to remain in coastal areas, and also by creating new specialisations that can contribute to the sustainable development of fishing areas and help improve the quality of life in these areas;

23.  Stresses that renewable marine energies comprise an industrial sector for the future that can combat climate change and EU energy dependence, achieve greater energy sustainability within the Atlantic regions, and meet the Europe 2020 targets; notes that the Atlantic area is particularly suitable for the promotion of such energies, and considers that public support is necessary to accompany private investment in the technologies concerned, especially offshore wind energy and wave and tidal energy;

24.  Underlines the strategic importance of maritime transport along the Atlantic seaboard and the links between the outermost regions and mainland areas; calls on the Commission to propose measures to simplify the administrative formalities in ports, without losing the ability to control and verify the correctness of operations and cargoes;

25.  Emphasises the economic importance of the maritime industries in the Atlantic regions, especially the shipbuilding industry, which is experiencing an extremely difficult situation in some Atlantic of those regions, and for which the Commission needs to facilitate solutions; calls on the Commission to relaunch the LeaderSHIP 2015 initiative in order to strengthen this sector's ability to compete on the global market;

26.  Emphasises the importance of sea-fishing activities and aquaculture in the Atlantic regions, and is in favour of public support for the renewal and modernisation of fishing vessels and of special differentiation as regards the characteristics and potential of artisanal coastal fishing and shellfishing;

27.  Emphasises the importance of promoting socially, economically and environmentally sustainable forms of tourism that can constitute a significant source of added value for the Atlantic regions while protecting their ecosystem and biodiversity; points out that support for nautical tourism is a way to develop sports activities and boost cruise tourism;

28.  Underlines that the Atlantic seabed is home to a wealth of resources, and believes that the strategy should facilitate their sustainable exploration and exploitation;

An action plan for 2014-2020

29.  Calls for an external dimension to the strategy, with a view to advancing certain objectives and attracting international investment so as to capitalise on the opportunities that exist, and suggests that the marketing of the Atlantic area as a place to invest in, visit and do business must be a key element of the Action Plan;

30.  Calls on the Commission to establish the Atlantic macroregion and propose an action plan to implement the strategy in the period 2014-2020;

31.  Calls for a multi-level governance approach to be applied to the elaboration, implementation, evaluation and review of the action plan, in which regional and local public authorities, Atlantic Member States, private sector stakeholders and civil society organisations are closely involved;

32.  Stresses that the action plan should use existing European funding, rather than creating any new budgetary instruments;

33.  Calls for the action plan to be linked to the EU's regional policy, the Integrated Maritime Policy, research and innovation policy (Horizon 2020), and the Connecting Europe Facility; is of the opinion that it is essential to create synergies with other European policies in the areas of research and innovation, transport, the environment, energy, technology, tourism, fisheries and aquaculture, and international cooperation;

34.  Draws attention to the important role which the European Investment Bank, project bonds and public-private partnerships could play in providing funding for the investment required under the strategy;

35.  Insists that the future Atlantic strategy must be based on the thematic pillars of the Europe 2020 Strategy, since this will make it possible to link the thematic contents with sectoral policies in an integrated way; takes the view, in this context, that the objectives and thematic concentration proposed for the five funds included in the common strategic framework for European cohesion policy for the next programming period should form the framework of the action plan; underlines the objectives of ’strengthening research, technological development and innovation’, ’enhancing the competitiveness of SMEs’, ’supporting the shift towards a low-carbon economy’ and ’promoting sustainable transport and removing bottlenecks in key network infrastructures’;

36.  Calls for the partnership contracts and operational programmes to be bindingly geared to the corresponding priorities of the macroregional strategies in which they participate, in order to ensure that measures under the operational programmes and the priorities of macroregional strategies are closely aligned, resulting in the Structural Funds being used much more efficiently and added value being created at regional level; points out that this binding gearing must cover not only operational programmes falling under the cohesion policy's territorial cooperation objective (INTERREG), but also the operational programmes for each region in the Atlantic area;

37.  Supports the recognition and incorporation of preexisting territorial cooperation strategies, projects and experiences, which may offer lines of action and political and operational priorities to the action plan; calls for due account to be taken of the action plan during the design and implementation of future territorial cooperation programmes concerned by the strategy; believes, in addition, that technical support should be provided under the transnational strand of the European territorial cooperation objective for implementation of the action plan, inter alia so as to facilitate the pooling of best practice and networking;

38.  Considers multiregional, multi-fund operational programmes and integrated territorial investment (ITI) to be particularly useful means of facilitating implementation of the action plan;

39.  Proposes that the annual implementation reports for the relevant programmes should include an assessment of how programmes are contributing to the objectives of the Atlantic Strategy and the implementation of the Action Plan;

40.  Points out that the outermost regions could serve as natural laboratories for research and development activities related to renewable energies and the maritime economy; draws attention to the importance of the tourism sector for these regions and to the possibility of setting up logistics platforms to facilitate the transport of goods between Europe and the other global economies;

41.  Invites the national, regional and local authorities to look for synergies between their policies and the priorities of the action plan;

42.  Points out that the involvement in the strategy of European funds under direct and shared management will make it necessary to devise a suitable management and control system, and therefore calls for the establishment of a management platform for the action plan, offering an information and communication module for beneficiaries and facilitating coordination among the various authorities responsible for managing the funds;

43.  Recommends that the Atlantic Strategy must firstly agree on a Strategic Vision for the Atlantic Area, which will provide the reference for the Action Plan 2014-2020; further proposes that this Action Plan should:

44.  Points out that an Atlantic Forum has been set up for 2012 and 2013 under a preparatory action proposed by Parliament, in order to involve all stakeholders in the drafting of the action plan; stresses that, as the instigator of the forum, Parliament has a leading role therein;

45.  Proposes that the Action Plan be adopted by the Atlantic Forum, and calls on the forthcoming Irish presidency to prioritise European Council endorsement of the Action Plan during its term of office, with a focus on delivery, a credible process for monitoring and ongoing evaluation, and scheduling a mid-term review;

46.  Calls on the Commission to study the possibility of also drawing up similar macroregional strategies in other regions where such a measure would lead to lasting and sustainable economic growth;

o
o   o

47.  Instructs its President to forward this resolution to the Commission, the Council, the Committee of the Regions and the European Economic and Social Committee.

(1) OJ C 199 E, 7.7.2012, p. 95 (2) Texts adopted, P7_TA(2011)0285.

European Parliament legislative resolution of 13 September 2012 on the proposal for a regulation of the European Parliament and of the Council amending Annex I to Council Regulation (EC) No 1528/2007 as regards the exclusion of a number of countries from the list of regions or states which have concluded negotiations (COM(2011)0598 – C7-0305/2011 – 2011/0260(COD))

P7_TA(2012)0342 A7-0207/2012

(Ordinary legislative procedure: first reading)

The European Parliament,

–  having regard to the Commission proposal to Parliament and the Council (COM(2011)0598),

–  having regard to Article 294(2) and Article 207(2) of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C7-0305/2011),

–  having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

–  having regard to Rule 55 of its Rules of Procedure,

–  having regard to the report of the Committee on International Trade and the opinion of the Committee on Development (A7-0207/2012),

1.  Adopts its position at first reading hereinafter set out;

2.  Calls on the Commission to refer the matter to Parliament again if it intends to amend its proposal substantially or replace it with another text;

3.  Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Position of the European parliament adopted at first reading on 13 September 2012 with a view to the adoption of Regulation (EU) No .../2012 of the European Parliament and of the Council amending Annex I to Council Regulation (EC) No 1528/2007 as regards the exclusion of a number of countries from the list of regions or states which have concluded negotiations

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 207(2) thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national Parliaments,

Acting in accordance with the ordinary legislative procedure(1),

Whereas:

(1)  Negotiations on the Economic Partnership Agreements (’the Agreements’) between:

(2)  The conclusion of negotiations on the Agreements by Antigua and Barbuda, the Commonwealth of the Bahamas, Barbados, Belize, the Republic of Botswana, the Republic of Burundi, the Republic of Cameroon, Union of the Comoros, the Republic of Côte d'Ivoire, the Commonwealth of Dominica, the Dominican Republic, the Republic of the Fiji Islands, the Republic of Ghana, Grenada, the Cooperative Republic of Guyana, the Republic of Haiti, Jamaica, the Republic of Kenya, the Kingdom of Lesotho, the Republic of Madagascar, the Republic of Mauritius, the Republic of Mozambique, the Republic of Namibia, the Independent State of Papua New Guinea, the Republic of Rwanda, Federation of Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, the Republic of Seychelles, the Republic of Suriname, the Kingdom of Swaziland, the United Republic of Tanzania, the Republic of Trinidad and Tobago, the Republic of Uganda, the Republic of Zambia(2) and the Republic of Zimbabwe permitted their inclusion in Annex I to Council Regulation (EC) No 1528/2007 of 20 December 2007 applying the arrangements for products originating in certain states which are part of the African, Caribbean and Pacific (ACP) Group of States provided for in agreements establishing, or leading to the establishment of, Economic Partnership Agreements(3).

(3)  The Republic of Botswana, the Republic of Burundi, the Republic of Cameroon, Union of the Comoros, the Republic of Côte d'Ivoire, the Republic of the Fiji Islands, the Republic of Ghana, the Republic of Haiti, the Republic of Kenya, the Kingdom of Lesotho, the Republic of Mozambique, the Republic of Namibia, the Republic of Rwanda, the Kingdom of Swaziland, the United Republic of Tanzania, the Republic of Uganda, the Republic of Zambia, and the Republic of Zimbabwe have not taken the necessary steps towards ratification of their respective Agreements.

(4)  Consequently, in the light of Article 2(3) of Regulation (EC) No 1528/2007, and in particular point (b) thereof, Annex I to that Regulation should be amended to remove those countries.

(5)  In order to ensure that partners can swiftly be reinstated in Annex I to that Regulation as soon as they have taken the necessary steps towards ratification of their respective Agreements, and pending their entry into force, the power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of the European Union should be delegated to the European Commission in respect of reinstating the countries removed from Annex I through this Regulation. It is of particular importance that the European Commission carry out appropriate consultations during its preparatory work, including at expert level. The European Commission, when preparing and drawing up delegated acts, should ensure a simultaneous, timely and appropriate transmission of relevant documents to the European Parliament and the Council. The Commission should provide full information and documentation on its meetings with national experts within the framework of its work on the preparation and implementation of delegated acts. The Commission should invite Parliament's experts to attend those meetings,[Am. 1]

HAVE ADOPTED THIS REGULATION:

Article 1

Regulation (EC) No 1528/2007 is amended as follows:

(1)  The following Articles are inserted:"

Article 2a

The Commission shall be empowered to adopt delegated acts in accordance with Article 2b to amend Annex I by reinstating those regions or states from the ACP Group of States which were removed from that Annex by virtue of [Regulation (EU) No …/…(4) of the European Parliament and of the Council*], and which have since taken the necessary steps towards ratification of their respective Agreements after removal from Annex I.

Article 2b

Exercise of the delegation

1.  The power to adopt delegated acts is conferred on the Commission subject to the conditions laid down in this Article.

2.  The delegation of power referred to in Article 2a shall be conferred on the Commission for an indeterminate period of time from the entry into force of this Regulation.for a period of five years from ...(5). The Commission shall draw up a report in respect of the delegation of power not later than nine months before the end of the five- year period. The delegation of power shall be tacitly extended for periods of an identical duration, unless the European Parliament or the Council opposes such extension not later than three months before the end of each period.[Am. 2]

3.  The delegation of power referred to in Article 2a may be revoked at any time by the European Parliament or by the Council. A decision of revocation shall put an end to the delegation of the powers specified in that decision. It shall take effect the day following the publication of the decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of the delegated acts already in force.

4.  As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the Council.

5.  A delegated act adopted pursuant to Article 2a shall enter into force only if no objection has been expressed either by the European Parliament or the Council within a period of 2 months of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by 2 monthsfour months at the initiative of the European Parliament or the Council. [Am. 3]

* OJ L ...

(2)  Annex I is replaced by the the text set out in the Annex to this Regulation.

Article 2

This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Union.

It shall apply on 1 January 2014from 1 January 2016. [Am. 4]

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels,

For the European Parliament

The President

For the Council

The President

ANNEX

’ANNEX I

List of regions or states which have concluded negotiations within the meaning of Article 2(2):

ANTIGUA AND BARBUDA

THE COMMONWEALTH OF THE BAHAMAS

BARBADOS

BELIZE

THE COMMONWEALTH OF DOMINICA

THE DOMINICAN REPUBLIC

GRENADA

THE COOPERATIVE REPUBLIC OF GUYANA

JAMAICA

THE REPUBLIC OF MADAGASCAR

THE REPUBLIC OF MAURITIUS

THE INDEPENDENT STATE OF PAPUA NEW GUINEA

FEDERATION OF SAINT KITTS AND NEVIS

SAINT LUCIA

SAINT VINCENT AND THE GRENADINES

THE REPUBLIC OF SEYCHELLES

THE REPUBLIC OF SURINAME

THE REPUBLIC OF TRINIDAD AND TOBAGO.’

(1) Position of the European Parliament of 13 September 2012. (2) OJ L 330, 9.12.2008, p.1 (3) OJ L 348, 31.12.2007, p. 1 (4) + Number of this Regulation. (5) + Date of entry into force of this Regulation.

European Parliament legislative resolution of 13 September 2012 on the proposal for a decision of the European Parliament and of the Council setting up an information exchange mechanism with regard to intergovernmental agreements between Member States and third countries in the field of energy (COM(2011)0540 – C7-0235/2011 – 2011/0238(COD))

P7_TA(2012)0343 A7-0264/2012

(Ordinary legislative procedure: first reading)

The European Parliament,

–  having regard to the Commission proposal to Parliament and the Council (COM(2011)0540),

–  having regard to Article 294(2) and Article 194 of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C7-0235/2011),

–  having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

–  having regard to the reasoned opinion submitted, within the framework of Protocol No 2 on the application of the principles of subsidiarity and proportionality, by the Luxembourg Chamber of Deputies, asserting that the draft legislative act does not comply with the principle of subsidiarity,

–  having regard to the opinion of the European Economic and Social Committee of 18 January 2012(1),

–  after consulting the Committee of the Regions,

–  having regard to the undertaking given by the Council representative by letter of 5 June 2012 to approve Parliament's position, in accordance with Article 294(4) of the Treaty on the Functioning of the European Union,

–  having regard to Rule 55 of its Rules of Procedure,

–  having regard to the report of the Committee on Industry, Research and Energy and the opinions of the Committee on Foreign Affairs and the Committee on International Trade (A7-0264/2012),

1.  Adopts its position at first reading hereinafter set out;

2.  Calls on the Commission to refer the matter to Parliament again if it intends to amend its proposal substantially or replace it with another text;

3.  Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Position of the European Parliament adopted at first reading on 13 September 2012 with a view to the adoption of Decision No .../2012/EU of the European Parliament and of the Council establishing an information exchange mechanism with regard to intergovernmental agreements between Member States and third countries in the field of energy

(As an agreement was reached between Parliament and Council, Parliament's position corresponds to the final legislative act, Decision No 994/2012/EU.)

(1) OJ C 68, 6.3.2012, p. 65.

European Parliament legislative resolution of 13 September 2012 on the proposal for a regulation of the European Parliament and of the Council on agricultural product quality schemes (COM(2010)0733 – C7-0423/2010 – 2010/0353(COD))

P7_TA(2012)0344 A7-0266/2011

(Ordinary legislative procedure: first reading)

The European Parliament,

–  having regard to the Commission proposal to Parliament and the Council (COM(2010)0733),

–  having regard to Article 294(2) and Articles 43(2) and 118(1) of the Treaty on the Functioning of the European Union, pursuant to which the Commission submitted the proposal to Parliament (C7-0423/2010),

–  having regard to Article 294(3) of the Treaty on the Functioning of the European Union,

–  having regard to the opinion of the European Economic and Social Committee of 5 May 2011(1),

–  having regard to the opinion of the Committee of the Regions of 12 May 2011(2),

–  having regard to the undertaking given by the Council representative by letter of 25 June 2012 to approve Parliament's position, in accordance with Article 294(4) of the Treaty on the Functioning of the European Union,

–  having regard to Rule 55 of its Rules of Procedure,

–  having regard to the report of the Committee on Agriculture and Rural Development (A7-0266/2011),

1.  Adopts its position at first reading hereinafter set out;

2.  Takes note of the Council Statement annexed to this resolution;

3.  Calls on the Commission to refer the matter to Parliament again if it intends to amend its proposal substantially or replace it with another text;

4.  Instructs its President to forward its position to the Council, the Commission and the national parliaments.

Position of the European Parliament adopted at first reading on 13 September 2012 with a view to the adoption of Regulation (EU) No .../2012 of the European Parliament and of the Council on quality schemes for agricultural products and foodstuffs

(As an agreement was reached between Parliament and Council, Parliament's position corresponds to the final legislative act, Regulation (EU) No 1151/2012.)

Annex to the legislative resolution

Council Statement

The Council has noted the importance the European Parliament attaches to the extension of the system for management of production of PDO and PGI cheese to other PDO and PGI products.

The Council commits itself to discuss the issue of the management of the supply of PDO and PGI products in the context of its negotiations with the European Parliament on the Commission CAP reform proposal on the Single CMO which includes provision for instruments to regulate supply on agricultural markets.

(1) OJ C 218, 23.7.2011, p. 114. (2) OJ C 192, 1.7.2011, p. 28.

Amendments adopted by the European Parliament on 13 September 2012 on the proposal for a regulation of the European Parliament and of the Council on European Social Entrepreneurship Funds (COM(2011)0862 – C7-0489/2011 – 2011/0418(COD))(1)

P7_TA(2012)0345 A7-0194/2012

(Ordinary legislative procedure: first reading)

[Amendment No 2]

AMENDMENTS BY THE EUROPEAN PARLIAMENT(2)

P7_TA(2012)0345 A7-0194/2012

to the Commission proposal

P7_TA(2012)0345 A7-0194/2012

REGULATION (EU) No …/2012
OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
on European Social Entrepreneurship Funds
(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 114 thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Having regard to the opinion of the European Central Bank(3),

Having regard to the opinion of the European Economic and Social Committee(4),

Acting in accordance with the ordinary legislative procedure(5),

Whereas:

(1)  Increasingly, as investors also pursue social goals and are not only seeking financial returns, a social investment market has been emerging in the Union, comprised in part by investment funds targeting social undertakings. Such investment funds provide funding to social undertakings which are acting as drivers of social change by offering innovative solutions to social problems, for example helping to tackle the social consequences of the financial crisis, and making a valuable contribution to meeting the objectives of the Europe 2020 Strategy.

(1a)  This Regulation is part of the Social Business Initiative set out by the Commission in its Communication of 25 October 2011 entitled ’Social Business Initiative - Creating a favourable climate for social enterprises, key stakeholders in the social economy and innovation’.

(2)  It is necessary to lay down a common framework of rules regarding the use of the designation for European Social Entrepreneurship Funds, ’(EuSEF)’, in particular on the composition of the portfolio of funds that operate under this designation, their eligible investment targets, the investment tools they may employ and the categories of investors that are eligible to invest in such funds by uniform rules in the Union. In the absence of such a common framework, there is a risk that Member States take diverging measures at national level having a direct negative impact on, and creating obstacles to, the good functioning of the internal market, since funds that wish to operate across the Union would be subject to different rules in different Member States. Moreover, diverging quality requirements on portfolio composition, investment targets and eligible investors could lead to different levels of investor protection and generate confusion as to the investment proposition associated with a European Social Entrepreneurship Fund (EuSEF). Investors should, furthermore, be able to compare the investment propositions of different EuSEFs. It is necessary to remove significant obstacles to cross-border fundraising by EuSEFs and to avoid distortions of competition between those funds, and to prevent any further likely obstacles to trade and significant distortions of competition from arising in the future. Consequently, the appropriate legal basis is Article 114 of the Treaty on the Functioning of the European Union, as interpreted in accordance with the consistent case law of the Court of Justice of the European Union.

(3)  It is necessary to adopt a Regulation establishing uniform rules applicable to EuSEFs and imposing corresponding obligations on their managers in all Member States that wish to raise capital across the Union using the designation ’EuSEF’. These requirements should ensure the confidence of investors that wish to invest in such funds.

(3a)  This Regulation does not apply to existing national schemes that allow investment in social businesses and that do not use the designation ’EuSEF’.

(4)  Defining the quality requirements for the use of the designation ’EuSEF’ in the form of a Regulation should ensure that those requirements will be directly applicable to the managers of collective investment undertakings that raise funds using this designation. This would ensure uniform conditions for the use of this designation by preventing diverging national requirements as a result of the transposition of a Directive. This Regulation would entail that managers of collective investment undertakings that use this designation would need to follow the same rules in all of the Union, which would also boost confidence of investors that wish to invest in funds that focus on social undertakings. A Regulation would also reduce regulatory complexity and the manager's cost of compliance with often divergent national rules governing such funds, especially for those managers that want to raise capital on a cross-border basis. A Regulation should also contribute to eliminating competitive distortions.

(4a)  It should be possible for a EuSEF to be either externally or internally managed. Where the EuSEF is internally managed, the EuSEF is also the manager and should therefore comply with all requirements for managers of EuSEFs under this Regulation and be registered as such. A EuSEF which is internally managed should however not be permitted to be the external manager of other collective investment undertakings or UCITS.

(5)  In order to clarify the relationship between this Regulation and other rules on collective investment undertakings and their managers, it is necessary to establish that this Regulation should only apply to managers of collective investment undertakings other than UCITS in accordance with Article 1 of Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations, and administrative provisions, relating to undertakings for collective investment in transferable securities (UCITS)(6) and who are established in the Union and are registered with the competent authority in their home Member State in accordance with Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers(7), provided that those managers manage portfolios of EuSEFs. However, EuSEF managers who are registered under this Regulation and who are external managers should be allowed to additionally manage UCITS subject to authorisation under Directive 2009/65/EC.

(5a)  Furthermore, this Regulation applies only ▌to managers of those collective investment undertakings whose assets under management in total do not exceed the threshold referred to in point (b) of Article 3(2)(b) of Directive 2011/61/EU. This means that the calculation of the threshold for the purposes of this Regulation follows the calculation of the threshold of point (b) of Article 3(2) of Directive 2011/61/EU. However, EuSEF managers who are registered under this Regulation and whose assets in total subsequently grow to exceed the threshold referred to in point (b) of Article 3(2) of Directive 2011/61/EU, and who therefore become subject to authorisation with the competent authorities of their home Member State in accordance with Article 6 of that Directive, may continue to use the designation ’EuSEF’ in relation to the marketing of EuSEFs in the Union, provided that they comply with the requirements laid down in that Directive and that they continue to comply with certain requirements for the use of the designation ’EuSEF’ specified in this Regulation at all times in relation to the EuSEF. This applies to both existing EuSEFs and EuSEFs established after exceeding the threshold.

(6)  Where managers of collective investment undertakings do not wish to use the designation ’EuSEF’ then this Regulation does not apply. In those cases, existing national rules and general Union rules should continue to apply.

(7)  This Regulation should establish uniform rules on the nature of EuSEFs, notably on the portfolio undertakings into which the EuSEFs are to be permitted to invest, and the investment instruments to be used. This is necessary so that a clear demarcation line can be drawn between a EuSEF and other alternative investment funds that engage in other, less specialised, investment strategies, for example buyouts, which this Regulation is not seeking to promote.

(7a)  In line with the aim of precisely circumscribing the collective investment undertakings which will be covered by this Regulation and in order to ensure a focus on providing capital to social undertakings, EuSEFs should be deemed to be those funds that intend to invest at least 70 % of their aggregate capital contributions and uncalled committed capital in such undertakings. The EuSEF should not be permitted to invest more than 30 % of its aggregate capital contributions and uncalled committed capital in assets other than qualifying investments. This means that whereas the 30 % should be the maximum limit for non-qualifying investments at all times, the 70 % should be reserved for qualifying investments during the life time of the EuSEF. The above mentioned limits should be calculated on the basis of amounts investible after deduction of all relevant costs and holdings of cash and cash equivalents. This Regulation should set out the details necessary for the calculation of the referred investment limits.

(7b)  In order to ensure the necessary clarity and certainty this Regulation should also lay down uniform criteria to identify social undertakings as eligible qualifying portfolio undertakings. A social undertaking is an operator in the social economy whose main objective is to have a social impact rather than make a profit for their owners or shareholders. It operates by providing goods and services for the market and uses its profits primarily to achieve social objectives. It is managed in an accountable and transparent way and, in particular, by involving employees, consumers and stakeholders affected by its commercial activities.

(7c)  As social undertakings have the achievement of positive social impact as their principle objective rather than maximising their profits ▌, this Regulation should only promote support to qualifying portfolio undertakings that have the achievement of a measurable and positive social impact as their focus. A measurable and positive social impact could include the provision of services to immigrants who are otherwise excluded, or by reintegrating marginalised groups in the labour market by providing employment, support or training. These undertakings use their profits to achieve their primary social objective and are managed in an accountable and transparent way. For the, in general, exceptional cases, in which a qualifying portfolio undertaking wishes to distribute profits to shareholders and owners, the qualifying portfolio undertaking should have predefined procedures and rules on how profits are distributed to shareholders and owners. Those rules should specify that distribution of profits does not undermine the primary social objective.

(8)  Social undertakings include a large range of undertakings, taking various legal forms, that provide social services or goods to vulnerable, marginalised, disadvantaged or excluded persons. Such services include access to housing, healthcare, assistance for elderly or disabled persons, child care, access to employment and training as well as dependency management. Social undertakings also include undertakings that employ a method of production of goods or services that embodies their social objective, but whose activities may be outside the realm of the provision of social goods or services. Those activities include social and professional integration by means of access to employment for people disadvantaged in particular by insufficient qualifications or social or professional problems leading to exclusion and marginalisation. Those activities may also concern environmental protection with a societal impact, such as anti-pollution, recycling and renewable energy.

(8a)  The purpose of this Regulation is to support growth of social undertakings in the Union. Investments in qualifying portfolio undertakings established in third countries can bring more capital to EuSEFs and thereby benefit social undertakings in the Union. However, under no circumstances should investments be made into third country portfolio undertakings that are located in tax havens or uncooperative jurisdictions.

(8b)  A EuSEF should not be established in tax havens or uncooperative jurisdictions, such as third countries characterised in particular by no or nominal taxes, a lack of appropriate cooperation arrangements between the competent authorities of the home Member State of the EuSEF manager and the supervisory authorities of the third country where the social entrepreneurship fund is established, or a lack of effective exchange of information in tax matters. A EuSEF should also not invest in jurisdictions displaying any of the above criteria.

(8c)  EuSEF managers should be able to attract additional capital commitments during the lifetime of a fund. Such additional capital commitments in the lifetime of the EuSEF should be taken into account when the next investment in assets other than qualifying assets is contemplated. Additional capital commitments should be permitted in accordance with the criteria and subject to conditions set out in the EuSEF's rules or instruments of incorporation.

(9)  Taking into account the specific funding needs of social undertakings, it is necessary to achieve clarity regarding the types of instruments a EuSEF should use for such funding. Therefore, this Regulation lays down uniform rules on the eligible instruments to be used by a EuSEF when making investments, which include equity and quasi equity instruments, debt instruments, such as promissory notes and certificates of deposit, investments into other EuSEFs, secured or unsecured loans, and grants. However, to prevent dilution of the investments into qualifying portfolio undertakings, EuSEFs should only be permitted to invest into other EuSEFs where those other EuSEFs have not themselves invested more than 10 % of their aggregate capital contributions and uncalled committed capital into other EuSEFs.

(9a)  The core activities of EuSEFs are providing finance to social undertakings through primary investments. EuSEFs should not participate in systemically important banking activities outside of the usual prudential regulatory framework (so-called ’shadow banking’). Neither should they follow typical private equity strategies, such as leveraged buyouts.

(10)  To maintain the necessary flexibility in its investment portfolio, EuSEFs may ▌invest in other assets than qualifying investments to the extent that these investments do not exceed the 30 % limit for non-qualifying investments. Holdings of cash and cash equivalents should not be taken into account for the calculation of this limit as cash and cash equivalents are not to be considered as investments. EuSEFs should engage in investments throughout their portfolio that are consistent with their ethical investment strategy, for instance they should not undertake investments such as in the weapons industry, that risk breaches of human rights or that entail electronic waste-dumping.

(11)  In order to ensure that the designation ’EuSEF’ is reliable and easily recognisable for investors across the Union this Regulation should establish that only EuSEF managers which comply with the uniform quality criteria as set out in this Regulation should be eligible to use this designation when marketing EuSEFs across the Union.

(12)  In order to ensure that EuSEFs have a distinct and identifiable profile which is suited to their purpose, there should be uniform rules on the composition of the portfolio and on the investment techniques which are permitted for such funds.

(13)  In order to ensure that EuSEFs do not contribute to the development of systemic risks, and ▌that such funds concentrate, in their investment activities, on supporting qualifying portfolio undertakings, the use of leverage at the level of the fund should not be permitted. The EuSEF manager should only be permitted to borrow, issue debt obligations or provide guarantees, at the level of the EuSEFs, provided that such borrowings, debt obligations or guarantees are covered by uncalled commitments and thus do not increase the exposure of the fund beyond the level of its committed capital. Under this approach cash advances from investors of the EuSEF that are fully covered by capital commitments from those investors do not increase the exposure of the EuSEF and should therefore be allowed. Also, in order to permit the fund to cover extraordinary liquidity needs that might arise between a call of committed capital from investors and the actual reception of the capital in its accounts, short-term borrowing should be allowed provided that it does not exceed uncalled committed capital.

(14)  In order to ensure that EuSEFs are only marketed to investors who have the ▌experience, knowledge and expertise to make their own investment decisions and properly assess the risks these funds carry, and in order to maintain investor confidence and trust in EuSEF, certain specific safeguards should be laid down. Therefore, EuSEFs should ▌only be marketed to investors who are professional clients or who can be treated as professional clients under Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments(8). However, in order to have a sufficiently broad investor base for investments into EuSEFs it is also desirable that certain other investors have access to these funds, including high net worth individuals. For those other investors, specific safeguards should be laid down in order to ensure that EuSEFs are only marketed to investors that have the appropriate profile for making such investments. These safeguards exclude marketing through the use of periodic savings plans. Furthermore, investments made by executives, directors or employees involved in the management of a EuSEF manager should be possible when investing in the EuSEF they manage, as such individuals are knowledgeable enough to participate in such investments.

(15)  To ensure that only EuSEF managers who fulfil uniform quality criteria as regards their behaviour in the market use the designation ’EuSEF’, this Regulation should establish rules on the conduct of business and the relationship of the EuSEF manager to its investors. For the same reason, this Regulation should also lay down uniform conditions concerning the handling of conflicts of interest by such managers. These rules should also require the manager to have the necessary organisational and administrative arrangements in place to ensure a proper handling of conflicts of interest.

(15a)  Where an EuSEF manager intends to delegate functions to third parties, the manager's liability towards the EuSEF and its investors should not be affected by the delegation of functions by the EuSEF manager to a third party. Moreover, the EuSEF manager should not delegate functions to the extent that, in essence, it can no longer be considered to be the EuSEF manager and has become a letter-box entity. The EuSEF manager should remain responsible for the proper performance of delegated functions and compliance with this Regulation at all time. The delegation of functions should not undermine the effectiveness of supervision of the EuSEF manager, and, in particular, should not prevent the EuSEF manager from acting, or the EuSEF from being managed, in the best interests of its investors.

(16)  The creation of positive social impacts in addition to the generation of financial returns for investors is a key characteristic of investment funds targeting social undertakings, one which distinguishes them from other types of investment funds. This Regulation should therefore require that the EuSEF managers put in place procedures for ▌measuring the positive social impacts which are to be achieved by investment into qualifying portfolio undertakings.

(16a)  Currently funds that are targeting social outcomes or impacts typically assess and collate information on the extent to which social undertakings are achieving the outcomes they are targeting. There are a wide range of different kinds of social outcomes or impacts that a social undertaking might target. Different ways of identifying the social impacts and measuring them have thereby developed. For instance, a firm that is seeking to aid disadvantaged persons may report on the numbers of such persons aided, for instance employed who otherwise would not be employed. Or, a firm that is seeking to improve the rehabilitation into society of prisoners on release may assess its performance in terms of recidivism rates. The funds aid the undertakings in preparing and providing information on their goals and achievements, and gathering it for investors. While information about social impacts is very important for investors, it is difficult to compare between different social undertakings and different funds both because of the differences in social outcomes being targeted and because of the variety of current approaches. In order to encourage the greatest consistency and comparability in the longer term in such information and the greatest efficiency in the procedures for obtaining the information, it is desirable to develop delegated acts in this area. Such delegated acts should also ensure greater clarity for supervisors, EuSEFs and social undertakings.

(17)  In order to ensure the integrity of the designation ’EuSEF’, this Regulation should also contain quality criteria as regards the organisation of a EuSEF manager. Therefore, this Regulation should lay down uniform, proportionate requirements for the need to maintain adequate technical and human resources ▌.

(17a)  In order to ensure the proper management of the EuSEF and the ability of the manager to cover potential risks arising from its activities this Regulation should lay down uniform, proportionate requirements for EuSEF manager to maintain sufficient own funds. The amount of such own funds should be sufficient to ensure the continuity and proper management of the EuSEF.

(18)  It is necessary for the purpose of investor protection to ensure that EuSEFs assets are properly evaluated. Therefore the rules or instruments of incorporation of the EuSEF should contain rules on the valuation of assets. This should ensure the integrity and the transparency of the valuation.

(19)  In order to ensure that EuSEF managers which make use of the designation ’EuSEF’ give sufficient account of their activities, uniform rules on annual reports should be established.

(20)  To ensure the integrity of the designation ’EuSEF’ in the eyes of investors, it is necessary that the designation only be used by fund managers who are fully transparent as to their investment policy and their investment targets. This Regulation should therefore set out uniform rules on disclosure requirements that are incumbent on a EuSEF manager in relation to his investors. These requirements include those elements that are specific to investments into social undertakings, so that greater consistency and comparability of such information may be achieved. This includes information about the criteria and the procedures which are used to select particular qualifying portfolio undertakings as investment targets. This also includes information about the positive social impact to be achieved by the investment policy and how this should be monitored and assessed. To ensure the necessary confidence and the trust of investors in such investments, this further includes information about the assets of the EuSEF which are not invested into qualifying portfolio undertakings and how these are selected.

(21)  In order to ensure effective supervision of the uniform requirements contained in this Regulation, the competent authority of the home Member State should supervise compliance of the EuSEF manager with the uniform requirements set out in this Regulation. To this effect, the EuSEF manager who wishes to market his funds under the designation ’EuSEF’ should inform the competent authority of his home Member State of this intention. The competent authority should register the fund manager if all necessary information has been provided and if ▌ suitable arrangements to comply with the requirements of this Regulation are in place. That registration should be valid across the entire Union.

(21a)  In order to facilitate the efficient cross-border marketing of EuSEF, registration of the manager should be as quick as possible.

(21b)  While safeguards are included in this Regulation to ascertain that funds are properly used, supervisory authorities should be vigilant in ensuring that those safeguards are complied with.

(22)  In order to ensure effective supervision of compliance with the uniform criteria set out, this Regulation should contain rules on the circumstances under which information supplied to the competent authority in the home Member State needs to be updated.

(23)  For the effective supervision of the requirements laid down, this Regulation should also establish a process for cross-border notifications between the competent supervisory authorities, to be triggered by the registration of the EuSEF manager in its home Member State.

(24)  In order to maintain transparent conditions for the marketing of EuSEF managers across the Union, the European Supervisory Authority (European Securities and Markets Authority) (’ESMA’) established by Regulation (EU) No 1095/2010 of the European Parliament and of the Council(9) should be entrusted with maintaining a central database listing all EuSEF managers and the EuSEFs they manage that are registered in accordance with this Regulation.

(24a)  Where the competent authority of the host Member State has clear and demonstrable grounds for believing that the EuSEF manager acts in breach of this Regulation within its territory, it should promptly inform the competent authority of the home Member State, which should take appropriate measures.

(24b)  If, despite the measures taken by the competent authority of the home Member State or because the competent authority of the home Member State fails to act within a reasonable timeframe, or the EuSEF manager persists in acting in a manner that is clearly in conflict with this Regulation, the competent authority of the host Member State may, after informing the competent authority of the home Member State, take all the appropriate measures needed in order to protect investors, including the possibility of preventing the manager concerned from carrying out any further marketing of its EuSEFs within the territory of the host Member State.

(25)  In order to ensure the effective supervision of the uniform criteria established, this Regulation should contain a list of supervisory powers that competent authorities shall have at their disposal.

(26)  In order to ensure proper enforcement, this Regulation should contain administrative sanctions and measures for the breach of its key provisions, namely the rules on portfolio composition, on safeguards relating to the identity of eligible investors, and on the use of the designation ’EuSEF’ only by registered EuSEF managers. It should be established that a breach of these key provisions entails the prohibition of the use of the designation and the removal of the fund manager from the register.

(27)  Supervisory information should be exchanged between the competent authorities in the home and host Member States and ESMA.

(28)  Effective regulatory cooperation among the entities tasked with supervising compliance with the uniform criteria set out in this Regulation requires that a high level of professional secrecy should apply to all relevant national authorities and to ESMA.

(28a)  The contribution of EuSEFs to the growth of a European market for social investments will depend on take up of the designation by fund managers, the recognition of the designation by investors and the development of a strong eco-system for social enterprises across the Union that aids those enterprises in availing themselves of the financing options provided. To this end, all stakeholders, including market operators, competent authorities in Member States, the Commission and other relevant entities within the Union, should endeavour to ensure a high level of awareness of the possibilities presented by this Regulation.

(29)  Technical standards in financial services should ensure consistent harmonisation and a high level of supervision across the Union. As a body with highly specialised expertise, it would be efficient and appropriate to entrust ESMA with the elaboration of draft implementing technical standards where these do not involve policy choices, for submission to the Commission.

(30)  The Commission should be empowered to adopt implementing technical standards by means of implementing acts pursuant to Article 291 of the Treaty on the Functioning of the European Union and in accordance with Article 15 of Regulation (EU) No 1095/2010. ESMA should be entrusted with drafting implementing technical standards for the format ▌of the notification referred to in this Regulation.

(31)  In order to specify the requirements set out in this Regulation, the power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of the European Union should be delegated to the Commission in respect of specifying the types of goods and services or methods of production for goods and services embodying a social objective and the circumstances in which profits may be distributed to owners and investors, the types of conflicts of interest EuSEF managers need to avoid and the steps to be taken in that respect, the details of the procedures to measure the social impacts to be achieved by the qualifying portfolio undertakings, and the content and procedure for provision of information for investors. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level, taking into account self-regulatory initiatives and codes of conduct. The consultations carried out by the Commission during its preparatory work regarding delegated acts on the details of the procedures to measure the social impacts to be achieved by the qualifying portfolio undertakings should involve relevant stakeholders and ESMA. The Commission, when preparing and drawing up delegated acts, should ensure a simultaneous, timely and appropriate transmission of relevant documents to the European Parliament and Council.

▌

(33)  At the latest four years after the date on which this Regulation becomes applicable a review of this Regulation should be carried out in order to take account of the development of the market of EuSEFs. The review should include a general survey of the functioning of the rules in this Regulation and the experience acquired in applying them. On the basis of the review, the Commission should submit a report to the European Parliament and the Council accompanied, if appropriate, by legislative proposals.

(33a)  Furthermore, by 22 July 2017, the Commission should start a review of the interaction between this Regulation and other rules on collective investment undertakings and their managers, especially those of Directive 2011/61/EU. In particular, this review should address the scope of this Regulation assessing whether it is necessary to extend the scope to allow for larger alternative investment funds managers to use the designation EuSEF. On the basis of the review, the Commission should submit a report to the European Parliament and the Council accompanied, if appropriate, by legislative proposals.

(33b)  In the context of this review, the Commission should evaluate any barriers that may have impeded the uptake of the funds by investors, including the impact on institutional investors of other regulation as may apply to them of a prudential nature. In addition, the Commission should gather data for assessing the contribution of EuSEFs to other Union programs such as Horizon 2020 that seek also to support innovation in the Union.

(33c)  In relation to the Commission examination of tax obstacles to cross-border venture capital investments as foreseen in the Commission Communication of 7 December 2011 entitled ’An action plan to improve access to finance for SMEs’ and in the context of the review of this Regulation, the Commission should consider undertaking an equivalent examination of possible tax obstacles for social entrepreneurship funds and assess possible tax incentives aimed at encouraging social entrepreneurship in the Union.

(33d)  ESMA should assess its staffing and resources needs arising from the assumption of its powers and duties in accordance with this Regulation and submit a report to the European Parliament, the Council and the Commission.

(34)  This Regulation respects fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union, including the right to respect for private and family life and the freedom to conduct a business.

(35)  Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data(10) governs the processing of personal data carried out in the Member States in the context of this Regulation and under the supervision of the Member States competent authorities, in particular the public independent authorities designated by the Member States. Regulation (EC) No 45/2001 of the European Parliament and of the Council of 18 December 2000 on the protection of individuals with regard to the processing of personal data(11) by the Union institutions and bodies and on the free movement of such data, governs the processing of personal data carried out by ESMA within the framework of this Regulation and under the supervision of the European Data Protection Supervisor.

(36)  Since the objective of this Regulation, namely to develop an internal market for EuSEFs by laying down a framework for the registration of EuSEF managers facilitating the marketing of EuSEFs throughout the Union, cannot be sufficiently achieved by the Member States and can therefore, by reason of its scale and effects, be better achieved at Union level, the Union may adopt measures in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on the European Union. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve that objective,

HAVE ADOPTED THIS REGULATION:

CHAPTER I

SUBJECT MATTER, SCOPE AND DEFINITIONS

Article 1

This Regulation lays down uniform requirements and conditions for those managers of collective investment undertakings who wish to use the designation ’EuSEF’ in relation to the marketing of EuSEF in the Union, and thereby contributing to the smooth functioning of the internal market.

This Regulation also lays down uniform rules for the marketing of EuSEF ▌to eligible investors across the Union, for the portfolio composition of EuSEFs, for the eligible investment instruments and techniques, as well as on the organisation, transparency and conduct of EuSEF managers that market EuSEFs across the Union.

Article 2

1.  This Regulation applies to managers of collective investment undertakings as defined in point (b) of Article 3(1), whose assets under management in total do not exceed the threshold referred to in Article 3(2)(b) of Directive 2011/61/EU, who are established in the Union and who are subject to registration with the competent authorities of their home Member State in accordance with point (a) of Article 3(3) of Directive 2011/61/EU, provided that those managers manage portfolios of EuSEFs ▌.

1a.  EuSEF managers registered under this Regulation in accordance with Article 14, and whose assets in total subsequently grow to exceed the threshold referred to in Article 3(2)(b) of Directive 2011/61/EU, and who therefore become subject to authorisation with the competent authorities of their home Member State in accordance with Article 6 of that Directive, may continue to use the designation ’EuSEF’ in relation to the marketing of EuSEFs in the Union, provided that they comply with the requirements laid down in Directive 2011/61/EU and that they continue to comply with Articles 3, 5, 9, 12(2), 13(1) (c), (d) and (e) of this Regulation at all times in relation to the EuSEFs.

▌

3a.  EuSEF managers that are registered in accordance with this Regulation may additionally manage UCITS subject to authorisation under Directive 2009/65/EC provided that they are external managers.

Article 3

1.  For the purposes of this Regulation, the following definitions shall apply:

The limits referred to in points (i) and (ii) shall be calculated on the basis of amounts investible after the deduction of all relevant costs and holdings in cash and cash equivalents;

In regard to point (h) of the first subparagraph, where the legal form of a EuSEF permits internal management and where the governing body of the fund chooses not to appoint an external manager, the EuSEF itself shall be registered as the EuSEF manager. A EuSEF who is registered as internal EuSEF manager can not be registered as external EuSEF manager of other collective investment undertakings.

2.  The Commission shall be empowered to adopt delegated acts in accordance with Article 24 specifying the types of services or goods and the methods of production of services or goods that embody a social objective referred to in point (i) of paragraph 1(d) of this Article taking into account the different kinds of qualifying portfolio undertakings and those circumstances in which profits can be distributed to owners and investors.

CHAPTER II

CONDITIONS FOR THE USE OF THE DESIGNATION ’EuSEF’

Article 4

EuSEF managers who comply with the requirements set out in this Chapter shall be entitled to use the designation ’EuSEF’ in relation to the marketing of EuSEFs across the Union.

Article 5

1.  EuSEF managers shall ensure that, when acquiring assets other than qualifying investments no more than 30 % of the EuSEF's aggregate capital contributions and uncalled committed capital is used for the acquisition of assets other than qualifying investments; the 30 % shall be calculated on the basis of amounts investible after the deduction of all relevant costs; holdings in cash and cash equivalents shall not be taken into account for calculating this limit as cash and cash equivalents are not to be considered as investments.

2.  The EuSEF manager may not employ at the level of the EuSEF ▌any method ▌by which the exposure of the fund will be increased beyond the level of its committed capital, whether through borrowing of cash or securities, the engagement into derivative positions or by any other means.

2a.  The EuSEF manager may only borrow, issue debt obligations or provide guarantees, at the level of the EuSEF, where such borrowings, debt obligations or guarantees are covered by uncalled commitments.

▌

Article 6

1.  EuSEF managers shall market the units and shares of the EuSEFs under management exclusively to investors which are considered to be professional clients in accordance of Section I of Annex II of Directive 2004/39/EC, or may, on request, be treated as professional clients in accordance with Section II of Annex II of Directive 2004/39/EC, or to other investors where:

1a.  Paragraph 1 shall not apply to investments made by executives, directors or employees involved in the management of a EuSEF manager when investing in the EuSEFs that they manage.

Article 7

Article 7a

1.  Where a EuSEF manager intends to delegate functions to third parties, the manager's liability towards the EuSEF and its investors shall not be affected by the fact that the manager has delegated functions to a third party, nor shall the manager delegate to the extent that, in essence, it can no longer be considered to be the manager of the EuSEF and to the extent that it becomes a letter-box entity.

2.  The delegation must not undermine the effectiveness of supervision of the EuSEF manager, and, in particular, must not prevent the EuSEF manager from acting, or the EuSEF from being managed, in the best interests of its investors.

Article 8

1.  EuSEF managers shall identify and avoid conflicts of interest and, where they cannot be avoided, manage and monitor and, in accordance with paragraph 4, disclose promptly, those conflicts of interest in order to prevent them from adversely affecting the interests of the EuSEFs and their investors and to ensure that the EuSEFs they manage are fairly treated.

2.  EuSEF managers shall identify in particular those conflicts of interest that may arise between

3.  EuSEF managers shall maintain and operate effective organisational and administrative arrangements in order to comply with the requirements laid down in paragraph 1 and 2.

4.  Disclosures of conflicts of interest as referred to in paragraph 1 shall be provided, where organisational arrangements made by the EuSEF manager to identify, prevent, manage and monitor conflicts of interest are not sufficient to ensure, with reasonable confidence, that risks of damage to investors’ interests will be prevented. EuSEF managers shall clearly disclose the general nature or sources of conflicts of interest to the investors before undertaking business on their behalf.

5.  The Commission shall be empowered to adopt delegated acts in accordance with Article 24 specifying:

Article 9

1.  EuSEF managers shall employ for each EuSEF they manage procedures to measure ▌the extent to which the qualifying portfolio undertakings, in which the EuSEF invests, achieve the positive social impact that they are committed to. The managers shall ensure that these procedures are clear and transparent and include indicators that may, depending on the social objective and nature of the qualifying portfolio undertaking, include one or more of the following subjects:

2.  The Commission shall be empowered to adopt delegated acts in accordance with Article 24 specifying the details of the procedures referred to in paragraph 1 of this Article, in relation to different qualifying portfolio undertakings.

Article 10

At all times, EuSEF managers shall have sufficient own funds and use adequate and appropriate human and technical resources as are necessary for the proper management of EuSEFs.

It shall be incumbent upon the EuSEF managers, at all times, to ensure that they are able to justify the sufficiency of their own funds to maintain operational continuity and disclose their reasoning as to why these funds are sufficient as specified in Article 13.

Article 11

1.  Rules for the valuation of assets shall be laid down in the rules or instruments of incorporation of the EuSEF and shall ensure a sound and transparent valuation process.

1a.  Valuation procedures used shall ensure that the assets are valued properly and that the asset value is calculated at least once a year.

1b.  In order to ensure consistency in the valuation of qualifying portfolio undertakings, ESMA shall develop guidelines setting out common principles on the treatment of investments in such undertakings taking into account their primary objective of achieving measurable positive social impacts and their use of their profits first and foremost for the achievement of this impact.

Article 12

1.  EuSEF managers shall make available an annual report to the competent authority of the home Member State for each EuSEF under management no later than 6 months following the end of the financial year. The report shall describe the composition of the portfolio of the EuSEF and the activities of the past year. It shall also include a disclosure of the profits of the EuSEF by the end of its life time and, where applicable, a disclosure of the profits distributed during its lifetime. It shall contain the audited financial accounts for the EuSEF. The audit shall confirm that money and assets are held in the name of the fund and that the EuSEF manager has established and maintained adequate records and controls in respect of the use of any mandate or control over the money and assets of the EuSEF and its investors, and shall be conducted at least once a year. The annual report shall be produced in accordance with existing reporting standards and the terms agreed between the EuSEF manager and the investors. EuSEF managers shall provide the report to investors on request. EuSEF managers and investors may agree additional disclosures amongst themselves.

2.  The annual report shall at least include the following elements:

3.  Where the EuSEF manager is required to make public an annual financial report in accordance with Article 4 of Directive 2004/109/EC of the European Parliament and Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market(12) in relation to the EuSEF the information referred to in paragraph 1 and 2 of this Article may be provided either separately or as an additional part of the annual financial report.

Article 13

1.  EuSEF managers shall, in relation to the EuSEFs they manage, inform their investors, in a clear and understandable manner, about the following elements prior to their investment decision:

2.  All of the information referred to in paragraph 1 shall be fair, clear and not misleading. It shall be kept up-to-date and reviewed regularly where relevant.

3.  Where the EuSEF manager is required to publish a prospectus in accordance with Directive 2003/71/EC of the European Parliament and the Council of 4 November 2003 on the prospectus to be published when securities are offered to the public or admitted to trading(13) or in accordance with national law in relation to the EuSEF, the information referred to in paragraph 1 of this Article may be provided either separately or as a part of the prospectus.

4.  The Commission shall be empowered to adopt delegated acts in accordance with Article 24 specifying:

CHAPTER III

SUPERVISION AND ADMINISTRATIVE COOPERATION

Article 14

1.  EuSEF managers who intend to use of the designation ’EuSEF’ for the marketing of their EuSEF shall inform the competent authority of their home Member State of this intention and shall provide the following information:

2.  The competent authority of the home Member State shall ▌register the EuSEF manager only if it is satisfied that the following conditions are met:

3.  The registration shall be valid for the entire territory of the Union and shall allow EuSEF managers to market EuSEFs under the designation ’EuSEF’ throughout the Union.

Article 15

Article 16

1.  Immediately after the registration of a EuSEF manager, the addition of a new EuSEF, the addition of a new domicile for the establishment of a EuSEF or the addition of a new Member State where the EuSEF manager intends to market EuSEFs, the competent authority of the home Member State shall notify this to the Member States indicated in accordance with point (d) of Article 14(1) ▌and to ESMA.

2.  The host Member States indicated in accordance with point (d) of Article 14(1) of this Regulation shall not impose, on the EuSEF manager registered in accordance with Article 14, any requirements or administrative procedures in relation to the marketing of its EuSEFs, nor shall they require any approval of the marketing prior to its commencement.

3.  In order to ensure uniform application of this article, ESMA shall develop draft implementing technical standards to determine the format of the notification.

4.  ESMA shall submit those draft implementing technical standards to the Commission by ...(14).

5.  Power is conferred on the Commission to adopt the implementing technical standards referred to in paragraph 3 in accordance with the procedure laid down in Article 15 of Regulation (EU) No 1095/2010.

Article 17

ESMA shall maintain a central database, publicly accessible on the internet, listing all EuSEF managers registered in the Union in accordance with this Regulation and EuSEFs that they market as well as the countries in which they are marketed.

Article 18

1.  The competent authority of the home Member State shall supervise compliance with the requirements set out in this Regulation.

1a.  Where the competent authority of the host Member State has clear and demonstrable grounds for believing that the EuSEF manager is in breach of this Regulation within its territory, it shall promptly inform the competent authority of the home Member State accordingly, which shall take appropriate measures.

1b.  If, despite the measures taken by the competent authority of the home Member State or because the competent authority of the home Member State fails to act within a reasonable timeframe, or the EuSEF manager persists in acting in a manner that is clearly in conflict with this Regulation, the competent authority of the host Member State may, as a consequence and after informing the competent authority of the home Member State, take all the appropriate measures needed in order to protect investors, including the possibility of preventing the manager concerned from carrying out any further marketing of its EuSEFs within the territory of the host Member State.

Article 19

Article 20

1.  Member States shall lay down the rules on administrative sanctions and measures ▌applicable to breaches of the provisions of this Regulation and shall take all measures necessary to ensure that they are implemented. The administrative sanctions and measures ▌provided for shall be effective, proportionate and dissuasive.

2.  By ...(15) the Member States shall notify the rules referred to in paragraph 1 to the Commission and ESMA. They shall notify the Commission and ESMA without delay of any subsequent amendment thereto.

Article 21

1.  The competent authority of the home Member State shall, while respecting the principle of proportionality, take the appropriate measures referred to in paragraph 2 where a EuSEF manager:

2.  In the cases referred to in paragraph 1 the competent authority of the home Member State shall take the following measures, as appropriate:

3.  The competent authority of the home Member State shall inform the competent authorities of the host Member States indicated in accordance with point (d) of Article 14(1) and ESMA without delay of the removal of the EuSEF manager from the register referred to in point (a) of paragraph 2 of this Article.

4.  The right to market one or more EuSEFs under the designation ’EuSEF’ in the Union expires with immediate effect from the date of the decision of the competent authority referred to in point (a) of paragraph 2.

Article 22

1.  Competent authorities and ESMA shall cooperate with each other for the purpose of carrying out their respective duties under this Regulation in accordance with Regulation (EU) No 1095/2010.

2.  Competent authorities and ESMA shall exchange all information and documentation necessary tocarry out their respective duties under this Regulation in accordance with Regulation (EU) No 1095/2010, in particular to identify and remedy breaches of this Regulation.

Article 22a

In case of disagreement between competent authorities of Member States on an assessment, action or omission of one competent authority in areas where this Regulation requires cooperation or coordination between competent authorities from more than one Member State, competent authorities may refer the matter to ESMA, which may act in accordance with the powers conferred on it under Article 19 of Regulation (EU) No 1095/2010, in so far as the disagreement is not related to Article 3(1)(a)(iii) or Article 3(1)(d)(-i) of this Regulation.

Article 23

1.  All persons who work or who have worked for the competent authorities or ESMA, as well as auditors and experts instructed by the competent authorities and ESMA, are bound by the obligation of professional secrecy. No confidential information which those persons receive in the course of their duties shall be divulged to any person or authority whatsoever, save in summary or aggregate form such that EuSEF managers and EuSEFs cannot be individually identified, without prejudice to cases covered by criminal law and proceedings under this Regulation.

2.  The competent authorities of the Member States or ESMA shall not be prevented from exchanging information in accordance with this Regulation or other Union law applicable to EuSEF managers and EuSEFs.

3.  Where competent authorities and ESMA receive confidential information in accordance with paragraph 1, they may use it only in the course of their duties and for the purpose of administrative and judicial proceedings.

CHAPTER IV

TRANSITIONAL AND FINAL PROVISIONS

Article 24

1.  The power to adopt delegated acts is conferred on the Commission subject to the conditions set out in this Article.

2.  The delegation of power referred to in Article ▌3(2), Article 8(5), Article 9(2) and Article 13(4) shall be conferred on the Commission for a period of four years from ...(16). The Commission shall draw up a report in respect of the delegation of powers not later than nine months before the end of the four-year period. The delegation of power shall be tacitly extended for periods of an identical duration, unless the European Parliament or the Council opposes such extension not later than three months before the end of each period.

3.  The delegation of powers referred to in Article ▌3(2), Article 8(5), Article 9(2), and Article 13(4) may be revoked at any time by the European Parliament or by the Council. A decision to revoke shall put an end to the delegation of the power specified in that decision. It shall take effect the day following the publication of the decision in the Official Journal of the European Union or at a later date specified therein. It shall not affect the validity of any delegated acts already in force.

4.  As soon as it adopts a delegated act, the Commission shall notify it simultaneously to the European Parliament and to the Council.

5.  A delegated act shall enter into force only if no objection has been expressed either by the European Parliament or the Council within a period of three months of notification of that act to the European Parliament and the Council or if, before the expiry of that period, the European Parliament and the Council have both informed the Commission that they will not object. That period shall be extended by three months at the initiative of the European Parliament or the Council.

Article 25

1.  At the latest four years after the date of application of this Regulation, the Commission shall review this Regulation. The review shall include a general survey of the functioning of the rules in this Regulation and the experience acquired in applying them, including:

2.  Following the review referred to in paragraph 1 and after consulting ESMA the Commission shall submit a report to the European Parliament and the Council accompanied, if appropriate, by a legislative proposal.

Article 25a

1.  By 22 July 2017, the Commission shall start a review of the interaction between this Regulation and other rules on collective investment undertakings and their managers, especially those of Directive 2011/61/EU. This review shall address the scope of this Regulation. It shall gather data for assessing whether it is necessary to extend the scope to allow for managers who manage EuSEFs the total assets of which exceed the threshold provided for in Article 2(1) to become EuSEF managers.

2.  Following the review referred to in paragraph 1 and after consulting ESMA the Commission shall submit a report to the European Parliament and the Council accompanied, if appropriate, by a legislative proposal.

Article 26

This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

It shall apply from the 22 July 2013, except for Article 3(2), Article 8(5), Article 9(2) and Article 13(4), which shall apply from the date of entry into force of the Regulation.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at ...

For the European Parliament

The President

The President

For the Council

(1) The matter was referred back to the committee responsible for reconsideration pursuant to Rule 57(2), second subparagraph (A7-0194/2012). (2) * Amendments: new or amended text is highlighted in bold italics; deletions are indicated by the symbol ▌. (3) OJ C 175, 19.6.2012, p. 11. (4) OJ C 229, 31.7.2012, p. 55. (5) Position of the European Parliament of … (6) OJ L 302, 17.11.2009, p. 32. (7) OJ L 174, 1.7.2011, p. 1. (8) OJ L 145, 30.4.2004, p. 1. (9) OJ L 331, 15.12.2010, p. 84. (10) OJ L 281, 23.11.1995 p. 31. (11) OJ L 8, 12.1.2001, p. 1. (12) OJ L 390, 31.12.2004, p. 38. (13) OJ L 345, 31.12.2003, p. 64. (14) * Nine months after entry into force of this Regulation. (15) * 24 months after entry into force of this Regulation. (16) * Entry into force of this Regulation.

Amendments adopted by the European Parliament on 13 September 2012 on the proposal for a regulation of the European Parliament and of the Council on European Venture Capital Funds (COM(2011)0860 – C7-0490/2011 – 2011/0417(COD))(1)

P7_TA(2012)0346 A7-0193/2012

(Ordinary legislative procedure: first reading)

[Amendment No 2]

AMENDMENTS BY THE EUROPEAN PARLIAMENT(2)

P7_TA(2012)0346 A7-0193/2012

to the Commission proposal

P7_TA(2012)0346 A7-0193/2012

REGULATION (EU) No …/2012
OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL
on European Venture Capital Funds
(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 114 thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Having regard to the opinion of the European Central Bank(3),

Having regard to the opinion of the European Economic and Social Committee(4),

Acting in accordance with the ordinary legislative procedure(5),

Whereas:

(1)  Venture capital provides finance to undertakings that are generally very small, in the initial stages of their corporate existence and display a strong potential for growth and expansion. In addition, venture capital funds provide ▌ undertakings with valuable expertise and knowledge, business contacts, brand-equity and strategic advice. By providing finance and advice to these undertakings, venture capital funds stimulate economic growth, contribute to the creation of jobs and capital mobilisation, foster the establishment and expansion of innovative undertakings, increase their investment in research and development and foster entrepreneurship, innovation and competitiveness in line with the objectives of EU 2020 Strategy and in the context of the long-term challenges of the Member States, such as those identified in the European Strategy and Policy Analysis System's report, Global Trends 2030.

(2)  It is necessary to lay down a common framework of rules regarding the use of the designation for European Venture Capital Funds, ’EuVECA’, in particular the composition of the portfolio of funds that operate under this designation, their eligible investment targets, the investment tools they may employ and the categories of investors that are eligible to invest in such funds by uniform rules in the Union. In the absence of such a common framework, there is a risk that Member States take diverging measures at national level having a direct negative impact on, and creating obstacles to, the good functioning of the internal market, since venture capital funds that wish to operate across the Union would be subject to different rules in different Member States. Moreover, diverging quality requirements on portfolio composition, investment targets and eligible investors could lead to different levels of investor protection and generate confusion as to the investment proposition associated with a ’EuVECA’. Investors should, furthermore, be able to compare the investment propositions of different venture capital funds. It is necessary to remove significant obstacles to cross-border fundraising by venture capital funds and to avoid distortions of competition between those funds, and to prevent any further likely obstacles to trade and significant distortions of competition from arising in the future. Consequently, the appropriate legal basis is Article 114 of the Treaty on the Functioning of the European Union, as interpreted in accordance with the consistent case law of the Court of Justice of the European Union.

(3)  It is necessary to adopt a Regulation establishing uniform rules applicable to the European Venture Capital Funds and imposing corresponding obligations on their managers in all Member States that wish to raise capital across the Union using the designation ’EuVECA’. These requirements should ensure the confidence of investors that wish to invest in venture capital funds.

(4)  Defining the quality requirements for the use of the designation ’EuVECA’ in the form of a Regulation would ensure that those requirements will be directly applicable to the managers of collective investment undertakings that raise funds using this designation. This would ensure uniform conditions for the use of this designation by preventing diverging national requirements as a result of the transposition of a Directive. This Regulation would entail that managers of collective investment undertakings that use this designation would need to follow the same rules in all of the Union, which would also boost confidence of investors that wish to invest in venture capital funds. A Regulation would also reduce regulatory complexity and the managers’ cost of compliance with often divergent national rules governing venture capital funds, especially for those managers that want to raise capital on a cross-border basis. A Regulation should also contribute to eliminating competitive distortions.

(4a)  As stated in the Commission Communication of 7 December 2011 entitled ’An action plan to improve access to finance for SMEs’, in 2012 the Commission will complete its examination of tax obstacles to cross-border venture capital investments with a view to presenting solutions in 2013 aimed at eliminating the obstacles while at the same time preventing tax avoidance and evasion.

(4b)  It should be possible for a qualifying venture capital fund to be either externally or internally managed. Where the qualifying venture capital fund is internally managed, the qualifying venture capital fund is also the manager and should therefore comply with all requirements for managers of qualifying venture capital funds under this Regulation and be registered as such. A qualifying venture capital fund which is internally managed should however not be permitted to be the external manager of other collective investment undertakings or UCITS.

(5)  In order to clarify the relationship between this Regulation and other rules on collective investment undertakings and their managers, it is necessary to establish that this Regulation should only apply to managers of collective investment undertakings, other than UCITS in accordance with Article 1 of Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities (UCITS)(6) who are established in the Union and are registered with the competent authority in their home Member State in accordance with Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers(7), provided that those managers manage portfolios of qualifying venture capital funds. However, venture capital fund managers who are registered under this Regulation and who are external managers should be allowed to additionally manage UCITS subject to authorisation under Directive 2009/65/EC.

(5a)  Furthermore, this Regulation applies only ▌to managers of those collective investment undertakings whose assets under management in total do not exceed the threshold referred to in Article 3(2)(b) of Directive 2011/61/EU. This means that the calculation of the threshold for the purposes of this Regulation follows the calculation of the threshold of Article 3(2)(b) of Directive 2011/61/EU.

(5b)  However, venture capital fund managers who are registered under this Regulation and whose assets in total subsequently grow to exceed the threshold referred to in Article 3(2)(b) of Directive 2011/61/EU, and who therefore become subject to authorisation with the competent authorities of their home Member State in accordance with Article 6 of that Directive, may continue to use the designation ’EuVECA’ in relation to the marketing of qualifying venture capital funds in the Union, provided that they comply with the requirements laid down in that Directive and that they continue to comply with certain requirements for the use of the designation ’EuVECA’ specified in this Regulation at all times in relation to the qualifying venture capital funds. This applies to both existing qualifying venture capital funds and qualifying venture capital funds established after exceeding the threshold.

(6)  Where managers of collective investment undertakings do not wish to use the designation ’EuVECA’, this Regulation should not apply. In these cases, existing national rules and general Union rules should continue to apply.

(7)  This Regulation should establish uniform rules on the nature of qualifying venture capital funds, notably on the portfolio undertakings into which the qualifying venture capital funds are to be permitted to invest and the investment instruments to be used. This is necessary so that a clear demarcation line can be drawn between a qualifying venture capital fund and other alternative investment funds that engage in other, less specialised, investment strategies, for example buyouts or speculative real estate investments, which this Regulation is not seeking to promote.

(8)  In line with the aim of precisely circumscribing the collective investment undertakings which will be covered by this Regulation and in order to ensure a focus on providing capital to small undertakings in the initial stages of their corporate existence, qualifying venture capital funds should be deemed to be those funds that intend to invest at least 70 % of their aggregate capital contributions and uncalled committed capital ▌in such undertakings ▌. The qualifying venture capital fund should not be permitted to invest more than 30 % of its aggregate capital contributions and uncalled committed capital in assets other than qualifying investments. This means that whereas the 30 % should be the maximum limit for non-qualifying investments at all times, the 70 percent should be reserved for qualifying investments during the life time of the qualifying venture capital fund. The above mentioned limits should be calculated on the basis of amounts investible after deduction of all relevant costs and holdings of cash and cash equivalents. This Regulation should set out the details necessary for the calculation of the referred investment limits.

(8a)  The purpose of this Regulation is to support growth and innovation in small and medium-sized enterprises (SMEs) in the Union. Investments in qualifying portfolio undertakings established in third countries can bring more capital to qualifying venture capital funds and thereby benefit SMEs in the Union. However, under no circumstances should investments be made into third country portfolio undertakings that are located in tax havens or uncooperative jurisdictions.

(8b)  A qualifying venture capital fund should not be established in tax havens or uncooperative jurisdictions, such as third countries characterised in particular by no or nominal taxes, a lack of appropriate cooperation arrangements between the competent authorities of the home Member State of the venture capital fund manager and the supervisory authorities of the third country where the qualifying venture capital fund is established, or a lack of effective exchange of information in tax matters. A qualifying venture capital fund should also not invest in jurisdictions displaying any of the above criteria.

(8c)  Managers of a qualifying venture capital fund should be able to attract additional capital commitments during the lifetime of that fund. Such additional capital commitments in the lifetime of the qualifying venture capital fund should be taken into account when the next investment in assets other than qualifying assets is contemplated. Additional capital commitments should be permitted in accordance with criteria and subject to conditions set out in the qualifying venture capital fund's rules or instruments of incorporation.

(8d)  The qualifying investments should be in the form of equity or quasi equity instruments. Quasi equity instruments comprise a type of financing instrument, which is a combination of equity and debt, where the return on the instrument is linked to the profit or loss of the qualifying portfolio undertaking, and where the repayment of the instrument in the event of default is not fully secured. Such instruments include a variety of financing instruments such as subordinated loans, silent participations, participating loans, profit participating rights, convertible bonds and bonds with warrants. As a possible complement to - but not a substitute for - equity and quasi equity instruments, secured or unsecured loans, e.g. bridge financing, granted by the qualifying venture capital fund to a qualifying portfolio undertaking in which the qualifying venture capital fund already holds qualifying investments, should be permitted, provided that no more than 30 percent of the aggregate capital contributions and uncalled committed capital in the qualifying venture capital fund is used for such loans. Furthermore, to reflect existing business practises in the venture capital market, a qualifying venture capital fund should be allowed to buy existing shares of a qualifying portfolio undertaking from existing shareholders of that undertaking. Also, for the purposes of ensuring the widest possible opportunities for fundraising, investments into other qualifying venture capital funds should be permitted. To prevent dilution of the investments into qualifying portfolio undertakings, qualifying venture capital funds should only be permitted to invest into other qualifying venture capital funds, provided that those qualifying venture capital funds have not themselves invested more than 10 percent of their aggregate capital contributions and uncalled committed capital in other qualifying venture capital funds.

(8e)  The core activities of venture capital funds are providing finance to SMEs through primary investments. Venture capital funds should not participate in systemically important banking activities outside of the usual prudential regulatory framework (so-called ’shadow banking’). Neither should they follow typical private equity strategies, such as leveraged buyouts.

(8f)  In line with the Europe 2020 strategy for delivering smart, sustainable and inclusive growth, this Regulation aims to promote venture capital investments into innovative SMEs anchored in the real economy. Credit institutions, investment firms, insurance undertakings, financial holding companies and mixed-activity holding companies should therefore be excluded from the definition of qualifying portfolio undertakings under this Regulation.

(9)  In order to put in place an essential safeguard that differentiates qualifying venture capital funds under this Regulation from the broader category of alternative investment funds which trade in issued securities on secondary markets, it is necessary to lay down rules so that qualifying venture capital funds make investments primarily in directly issued instruments.

(10)  In order to allow venture capital fund managers a certain degree of flexibility in the investment and liquidity management of their qualifying venture capital funds, ▌trading, such as in shares or participations in non-qualifying portfolio undertakings or acquisitions of non-qualifying investments, should be permitted up to a maximum threshold not exceeding 30 percent of aggregate capital contributions and uncalled capital ▌. ▌

(11)  In order to ensure that the designation ’EuVECA’ is reliable and easily recognisable for investors across the Union this Regulation should establish that only venture capital fund managers which comply with the uniform quality criteria as set out in this Regulation shall be eligible to use the designation ’EuVECA’ when marketing qualifying venture capital funds across the Union.

(12)  In order to ensure that qualifying venture capital funds have a distinct and identifiable profile which is suited to their purpose, there should be uniform rules on the composition of the portfolio and on the investment techniques which are permitted for such qualifying funds.

(13)  In order to ensure that qualifying venture capital funds do not contribute to the development of systemic risks, and ▌that such funds concentrate, in their investment activities, on supporting qualifying portfolio undertakings, the use of leverage at the level of the fund should not be permitted. The venture capital fund manager should only be permitted to borrow, issue debt obligations or provide guarantees, at the level of the qualifying venture capital fund, provided that such borrowings, debt obligations or guarantees are covered by uncalled commitments and thus do not increase the exposure of the fund beyond the level of its committed capital. Under this approach cash advances from investors of the qualifying venture capital fund that are fully covered by capital commitments from those investors do not increase the exposure of the qualifying venture capital fund and should therefore be allowed. Also, in order to permit the fund to cover extraordinary liquidity needs that might arise between a call of committed capital from investors and the actual reception of the capital in its accounts, short-term borrowing should be allowed provided that it does not exceed uncalled committed capital.

(14)  In order to ensure that qualifying venture capital funds are only marketed to investors who have the ▌experience, knowledge and expertise to make their own investment decisions and properly assess the risks these funds carry, and in order to maintain investor confidence and trust in qualifying venture capital funds, certain specific safeguards should be laid down. Therefore, qualifying venture capital funds should ▌only be marketed to investors who are professional clients or who can be treated as professional clients under Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments(8). However, in order to have a sufficiently broad investor base for investment into qualifying venture capital funds it is also desirable that certain other investors have access to qualifying venture capital funds, including high net worth individuals. For those other investors, however, specific safeguards should be laid down in order to ensure that qualifying venture capital funds are only marketed to investors that have the appropriate profile for making such investments. These safeguards exclude marketing through the use of periodic savings plans. Furthermore, investments made by executives, directors or employees involved in the management of a venture capital fund manager should be possible when investing in the qualifying venture capital fund they manage, as such individuals are knowledgeable enough to participate in venture capital investments.

(15)  To ensure that only venture capital fund managers who fulfil uniform quality criteria as regards their behaviour in the market use the designation ’EuVECA’, this Regulation should establish rules on the conduct of business and the relationship of the venture capital fund manager to its investors. For the same reason this Regulation should lay down uniform conditions concerning the handling of conflicts of interest by such managers. These rules should also require the manager to have the necessary organisational and administrative arrangements in place to ensure a proper handling of conflicts of interest.

(15a)  Where a venture capital fund manager intends to delegate functions to third parties, the manager's liability towards the venture capital fund and its investors should not be affected by the delegation of functions by the venture capital fund manager to a third party. Moreover, the venture capital fund manager should not delegate functions to the extent that, in essence, it can no longer be considered to be the venture capital fund manager and has become a letter-box entity. The venture capital fund manager should remain responsible for the proper performance of delegated functions and compliance with this Regulation at all time. The delegation of functions should not undermine the effectiveness of supervision of the venture capital fund manager, and, in particular, should not prevent the venture capital fund manager from acting, or the venture capital fund from being managed, in the best interests of its investors.

(16)  In order to ensure the integrity of the designation ’EuVECA’ this Regulation should also contain quality criteria as regards the organisation of a venture capital fund manager. Therefore, this Regulation should lay down uniform, proportionate requirements for the need to maintain adequate technical and human resources ▌.

(16a)  In order to ensure the proper management of the qualifying venture capital fund and the ability of the manager to cover potential risks arising from its activities this Regulation should lay down uniform, proportionate requirement for the venture capital fund managers to maintain sufficient own funds. The amount of such own funds should be sufficient to ensure the continuity and proper management of qualifying venture capital funds.

(17)  It is necessary for the purpose of investor protection to ensure that the assets of the qualifying venture capital fund are properly evaluated. Therefore, the rules or instruments of incorporation of qualifying venture capital funds should contain rules on the valuation of assets. This should ensure the integrity and transparency of the valuation.

(18)  In order to ensure that venture capital fund managers which make use of the designation ’EuVECA’ give sufficient account of their activities, uniform rules on annual reports should be established.

(19)  It is necessary, for the purposes of ensuring the integrity of the designation ’EuVECA’ in the eyes of investors that it is only used by venture capital fund managers who are fully transparent as to their investment policy and their investment targets. This Regulation should therefore set out uniform rules on disclosure requirements that are incumbent on a venture capital fund manager in relation to its investors. In particular, there should be pre-contractual disclosure obligations related to the investment strategy and objectives of the qualifying venture capital funds, the investment instruments which are used, information on costs and associated charges, and the risk/reward profile of the investment proposed by a qualifying fund. In view of achieving a high degree of transparency, such disclosure requirements should also include information on how the remuneration of the venture capital fund manager is calculated.

(20)  In order to ensure effective supervision of the uniform requirements contained in this Regulation, the competent authority of the home Member State should supervise compliance of the venture capital fund manager with the uniform requirements set out in this Regulation. To this effect, the qualifying venture capital manager who wishes to market its qualifying funds under the designation ’EuVECA’ should inform the competent authority of his home Member State of this intention. The competent authority should register the venture capital fund manager if all necessary information has been provided and if ▌suitable arrangements to comply with the requirements of this Regulation are in place. This registration should be valid across the entire Union.

(20a)  In order to facilitate the efficient cross-border marketing of qualifying venture capital funds, registration of the manager should be as quick as possible.

(20b)  While safeguards are included in this Regulation to ascertain that funds are properly used, supervisory authorities should be vigilant in ensuring that those safeguards are complied with.

(21)  In order to ensure effective supervision of compliance with the uniform criteria set out in this Regulation, this Regulation should contain rules on the circumstances under which information supplied to the competent authority in the home Member State needs to be updated.

(22)  For the effective supervision of the requirements of this Regulation, this Regulation should also lay down a process for cross-border notifications between the competent supervisory authorities, to be triggered by the registration of the venture capital fund manager in its home Member State.

(23)  In order to maintain transparent conditions for the marketing of qualifying venture capital funds across the Union, the European Supervisory Authority (European Securities and Markets Authority) (’ESMA’), established by Regulation (EU) No 1095/2010 of the European Parliament and of the Council(9), should be entrusted with maintaining a central database listing all qualifying venture capital fund managers and the qualifying venture capital funds they manage that are registered in accordance with this Regulation.

(23a)  Where the competent authority of the host Member State has clear and demonstrable grounds for believing that the venture capital fund manager acts in breach of this Regulation within its territory, it should promptly inform the competent authority of the home Member State, which should take appropriate measures.

(23b)  If, despite the measures taken by the competent authority of the home Member State or because the competent authority of the home Member State fails to act within a reasonable timeframe, or the venture capital fund manager persists in acting in a manner that is clearly in conflict with this Regulation, the competent authority of the host Member State may, after informing the competent authority of the home Member State, take all the appropriate measures needed in order to protect investors, including the possibility of preventing the manager concerned from carrying out any further marketing of its venture capital funds within the territory of the host Member State.

(24)  In order to ensure the effective supervision of the uniform criteria established in this Regulation, this Regulation should contain a list of supervisory powers that competent authorities shall have at their disposal.

(25)  In order to ensure proper enforcement, this Regulation should contain administrative sanctions and measures for the breach of key provisions of this Regulation, which are the rules on portfolio composition, on safeguards relating to the identity of eligible investors, and on the use of the designation ’EuVECA’ only by registered venture capital fund managers. It should be established that a breach of these key provisions entails the prohibition of the use of the designation and the removal of the venture capital fund manager from the register.

(26)  Supervisory information should be exchanged between the competent authorities in the home and host Member States and ESMA.

(27)  Effective regulatory cooperation among the entities tasked with supervising compliance with the uniform criteria set out in this Regulation requires that a high level of professional secrecy should apply to all relevant national authorities and to ESMA.

(28)  Technical standards in financial services should ensure consistent harmonisation and a high level of supervision across the Union. As a body with highly specialised expertise, it would be efficient and appropriate to entrust ESMA with the elaboration of draft implementing technical standards where these do not involve policy choices, for submission to the Commission.

(29)  The Commission should be empowered to adopt implementing technical standards by means of implementing acts pursuant to Article 291 of the Treaty on the Functioning of the European Union and in accordance with Article 15 of Regulation (EU) No 1095/2010 of the European Parliament and the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority)(10). ESMA should be entrusted with drafting implementing technical standards for the format ▌of the notification referred to in this Regulation.

(30)  In order to specify the requirements set out in this Regulation, the power to adopt acts in accordance with Article 290 of the Treaty on the Functioning of the European Union should be delegated to the Commission in respect of ▌the types of conflicts of interests venture capital funds managers need to avoid and the steps to be taken in that respect. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level. The Commission, when preparing and drawing up delegated acts, should ensure a simultaneous, timely and appropriate transmission of relevant documents to the European Parliament and to the Council.
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(32)  At the latest four years after the date on which this Regulation becomes applicable a review of this Regulation should be carried out in order to take account of the development of the venture capital market. The review should include a general survey of the functioning of the rules in this Regulation and the experience acquired in applying them. On the basis of the review, the Commission should submit a report to the European Parliament and the Council accompanied, if appropriate, by legislative proposals.

(32a)  Furthermore, by 22 July 2017, the Commission should start a review of the interaction between this Regulation and other rules on collective investment undertakings and their managers, especially those of Directive 2011/61/EU. In particular, this review should address the scope of this Regulation assessing whether it is necessary to extend the scope to allow for larger alternative investment funds managers to use the designation ’EuVECA’. On the basis of the review, the Commission should submit a report to the European Parliament and the Council accompanied, if appropriate, by legislative proposals.

(32b)  In the context of this review, the Commission should evaluate any barriers that may have impeded the uptake of the funds by investors, including the impact on institutional investors of other regulation as may apply to them of a prudential nature. In addition, the Commission should gather data for assessing the contribution of EuVECA to other Union programs such as Horizon 2020 that seek also to support innovation in the Union.

(32c)  In light of the Commission Communication on an Action Plan to improve to access to finance for SMEs, and the Commission Communication of 6 October 2010 entitled ’European 2020 Flagship Initiative: Innovation Union’, it is important to ensure the effectiveness of public schemes across the Union to support the venture capital market, and the coordination and mutual coherence of different Union policies aimed at fostering innovation, including policies on competition and research. A key focus of Union policies on innovation and growth is green technology, given the objective of the Union to be a global leader on smart and sustainable growth and on energy and resource efficiency, including in respect of financing for SMEs. When reviewing this Regulation, it will be important to assess its impact on progress towards this objective.

(32d)  ESMA should assess its staffing and resources needs arising from the assumption of its powers and duties in accordance with this Regulation and submit a report to the European Parliament, the Council and the Commission.

(32e)  The European Investment Fund (EIF) invests, amongst other things, in venture capital funds across the Union. The measures in this Regulation to allow for the easy identification of venture capital funds with defined common features should make it easier for the EIF to identify venture capital funds under this Regulation as possible investment targets. The EIF should therefore be encouraged to invest in European venture capital funds.

(33)  This Regulation respects fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union, including the right to respect for private and family life (Article 7) and the freedom to conduct a business (Article 16).

(34)  Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data(11) governs the processing of personal data carried out in the Member States in the context of this Regulation and under the supervision of the Member States competent authorities, in particular the public independent authorities designated by the Member States. Regulation (EC) No 45/2001 of the European Parliament and of the Council of 18 December 2000 on the protection of individuals with regard to the processing of personal data by the EU institutions and bodies and on the free movement of such data(12), governs the processing of personal data carried out by ESMA within the framework of this Regulation and under the supervision of the European Data Protection Supervisor.

(35)  This Regulation should be without prejudice to the application of state aid rules to qualifying venture capital funds.

(36)  Since the objectives of this Regulation, namely to ensure uniform requirements apply to the marketing of qualifying venture capital funds, and to establish a simple registration system for venture capital fund managers, thereby taking full account of the need to balance safety and reliability associated with the use of the designation ’EuVECA’ with the efficient operation of the venture capital market and the cost for its various stakeholders, cannot be sufficiently achieved by the Member States and can therefore, by reason of its scale and effects, be better achieved at Union level, the Union may ▌adopt measures in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Regulation ▌does not go beyond what is necessary in order to achieve those objectives,

HAVE ADOPTED THIS REGULATION:

CHAPTER I

SUBJECT MATTER, SCOPE AND DEFINITIONS

Article 1

This Regulation lays down uniform requirements and conditions for those managers of collective investment undertakings who wish to use the designation EuVECA’ in relation to the marketing of qualifying venture capital funds in the Union, and thereby contributing to the smooth functioning of the internal market. It lays down uniform rules for the marketing of qualifying venture capital funds to eligible investors across the Union, for the portfolio composition of qualifying venture capital funds, for the eligible investment instruments and techniques to be used by qualifying venture capital funds as well as for the organisation, conduct and transparency of venture capital fund managers that market qualifying venture capital funds across the Union.

Article 2

1.  This Regulation applies to managers of collective investment undertakings as defined in point (b) of Article 3, whose assets under management in total do not exceed the threshold referred to in Article 3(2)(b) of Directive 2011/61/EU, who are established in the Union and who are subject to registration with the competent authorities of their home Member State in accordance with point (a) of Article 3(3) of Directive 2011/61/EU, provided that those managers manage portfolios of qualifying venture capital funds ▌.

1a.  Venture capital fund managers registered under this Regulation in accordance with Article 13, and whose assets in total subsequently grow to exceed the threshold referred to in Article 3(2)(b) of Directive 2011/61/EU, and who therefore become subject to authorisation with the competent authorities of their home Member State in accordance with Article 6 of that Directive, may continue to use the designation ’EuVECA’ in relation to the marketing of qualifying venture capital funds in the Union, provided that they comply with the requirements laid down in that Directive and that they continue to comply with the Articles 3, 5, 12(b) and (ga) of this Regulation at all times in relation to the qualifying venture capital funds.

1b.  Venture capital fund managers that are registered in accordance with this Regulation may additionally manage UCITS subject to authorisation under Directive 2009/65/EC provided that they are external managers.

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Article 3

In regard to point (i) of the first subparagraph, where the legal form of a qualifying venture capital fund permits internal management and where the governing body of the fund chooses not to appoint an external manager, the qualifying venture capital fund itself shall be registered as the venture capital fund manager. A qualifying venture capital fund who is registered as internal venture capital fund manager can not be registered as external venture capital fund manager of other collective investment undertakings.

CHAPTER II

CONDITIONS FOR THE USE OF THE DESIGNATION
’EuVECA’

Article 4

Venture capital fund managers who comply with the requirements set out in this Chapter shall be entitled to use the designation ’EuVECA’ in relation to the marketing of qualifying venture capital funds in the Union.

Article 5

1.  The venture capital fund manager shall ensure that, when acquiring assets other than qualifying investments, no more than 30 percent of the fund's aggregate capital contributions and uncalled committed capital is used for the acquisition of assets other than qualifying investments; the 30 percent shall be calculated on the basis of amounts investible after the deduction of all relevant costs; holdings in cash and cash equivalents shall not be taken into account for calculating this limit as cash and cash equivalents are not to be considered as investments.

2.  The venture capital fund manager may not employ at the level of the qualifying venture capital fund ▌any method by which the exposure of the fund will be increased beyond the level of its committed capital, whether through borrowing of cash or securities, the engagement into derivative positions or by any other means.

2a.  The venture capital fund manager may only borrow, issue debt obligations or provide guarantees, at the level of the qualifying venture capital fund, where such borrowings, debt obligations or guarantees are covered by uncalled commitments.

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Article 6

1.  Venture capital fund managers shall market the units and shares of qualifying venture capital funds exclusively to investors which are considered to be professional clients in accordance with Section I of Annex II of Directive 2004/39/EC or may, on request, be treated as professional clients in accordance with Section II of Annex II of Directive 2004/39/EC, or to other investors where:

2.  Paragraph 1 shall not apply to investments made by executives, directors or employees involved in the management of a venture capital fund manager when investing in the qualifying venture capital funds that they manage.

Article 7

Article 7a

1.  Where a venture capital fund manager intends to delegate functions to third parties, the manager's liability towards the qualifying venture capital fund and its investors shall not be affected by the fact that the manager has delegated functions to a third party, nor shall the manager delegate to the extent that, in essence, it can no longer be considered to be the manager of the qualifying venture capital fund and to the extent that it becomes a letter-box entity.

2.  The delegation must not undermine the effectiveness of supervision of the venture capital fund manager, and, in particular, must not prevent the venture capital fund manager from acting, or the qualifying venture capital fund from being managed, in the best interests of its investors.

Article 8

1.  Venture capital fund managers shall identify and avoid conflicts of interest and, where they cannot be avoided, manage and monitor and, in accordance with paragraph 4, disclose promptly, those conflicts of interest in order to prevent them from adversely affecting the interests of the qualifying venture capital funds and their investors and to ensure that the qualifying venture capital funds they manage are fairly treated.

2.  The venture capital fund manager shall identify in particular those conflicts of interest that may arise between:

3.  Venture capital fund managers shall maintain and operate effective organisational and administrative arrangements in order to comply with the requirements set out in paragraphs 1 and 2.

4.  Disclosures of conflicts of interest as referred to in paragraph 1 shall be provided, where organisational arrangements made by the venture capital fund manager to identify, prevent, manage and monitor conflicts of interest are not sufficient to ensure, with reasonable confidence, that risks of damage to investors’ interests will be prevented. The venture capital fund managers shall clearly disclose the general nature or sources of conflicts of interest to the investors before undertaking business on their behalf.

5.  The Commission shall be empowered to adopt delegated acts in accordance with Article 23 measures specifying:

Article 9

At all times, venture capital fund managers shall have sufficient own funds and use adequate and appropriate human and technical resources as are necessary for the proper management of qualifying venture capital funds.

It shall be incumbent upon the venture capital fund managers, at all times, to ensure that they are able to justify the sufficiency of their own funds to maintain operational continuity and disclose their reasoning as to why these funds are sufficient as specified in Article 12.

Article 10

Rules for the valuation of assets shall be laid down in the rules or instruments of incorporation of the qualifying venture capital fund and shall ensure a sound and transparent valuation process.

Valuation procedures used shall ensure that the assets are valued properly and that the asset value is calculated at least once a year.

Article 11

1.  The venture capital fund manager shall make available an annual report to the competent authority of the home Member State for each qualifying venture capital fund under management no later than 6 months following the end of the financial year. The report shall describe the composition of the portfolio of the qualifying venture capital fund and the activities of the past year. It shall also include a disclosure of the profits of the qualifying venture capital funds by the end of its life time and, where applicable, a disclosure of the profits distributed during its lifetime. It shall contain the audited financial accounts for the qualifying venture capital fund. The audit shall confirm that money and assets are held in the name of the fund and that the venture capital fund manager has established and maintained adequate records and controls in respect of the use of any mandate or control over the money and assets of the qualifying venture capital fund and its investors, and shall be conducted at least once a year. The annual report shall be produced in accordance with existing reporting standards and the terms agreed between the venture capital fund manager and the investors. The venture capital fund manager shall provide the report to investors on request. Venture capital fund managers and investors may agree to make additional disclosures to each other.

2.  Where the venture capital fund manager is required to make public an annual financial report in accordance with Directive 2004/109/EC of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market(13) in relation to the qualifying venture capital fund, the information referred to in paragraph 1 may be provided either separately or as an additional part of the annual financial report.

Article 12

1.  Venture capital fund managers shall, in relation to the qualifying venture capital funds they manage, inform their investors, in a clear and understandable manner, about the following elements prior to their investment decision:

1a.  All of the information referred to in paragraph 1 shall be fair, clear and not misleading. It shall be kept up-to-date and reviewed regularly where relevant.

2.  Where the qualifying venture capital fund is required to publish a prospectus in accordance with Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003 on the prospectus to be published when securities are offered to the public or admitted to trading(14) or in accordance with national law in relation to the qualifying venture capital fund, the information referred to in paragraph 1 of this Article may be provided either separately or as a part of the prospectus.

CHAPTER III

SUPERVISION, ADMINISTRATIVE COOPERATION

Article 13

1.  Venture capital fund managers who intend to use designation ’EuVECA’ for the marketing of their qualifying venture capital funds shall inform the competent authority of their home Member State of this intention and shall provide the following information:

2.  The competent authority of the home Member State shall only register the venture capital fund manager if it is satisfied that the following conditions are met: