Reviving risk capital: The proposal to amend EuVECA and EuSEF

Briefing 15-12-2017

The European Venture Capital Funds (EuVECA) and European Social Entrepreneurship Funds (EuSEF) are collective investment schemes, harmonised at EU level by means of two Regulations: (EU) No 345/2013 (EuVECA) and (EU) No 346/2013 (EuSEF). In its 2016 review, the Commission noted that these funds remain small and concentrated in a few Member States and that, while the take-up of EuVECA could be considered successful, the EuSEF results have been disappointing. To overcome the obstacles identified, it has proposed some measures that − by removing limitations on larger managers managing EuVECA and EuSEF funds, decreasing costs for EuVECA and EuSEF funds, and broadening the range of eligible assets EuVECA funds may invest in − should increase investment into these funds. The Commission’s proposal was extensively amended by the European Parliament and the Council, with regard to – among other things – initial capital requirements for those funds, minimum own funds for the funds’ managers, investor-protection provisions, as well as the powers of the European Securities and Markets Authority (ESMA). Parliament adopted the amended proposal on 14 September 2017. Council adopted the act on 9 October. The final act was published in the Official Journal on 10 November 2017, and comes into force on 1 March 2018. Fourth edition. The ‘EU Legislation in Progress’ briefings are updated at key stages throughout the legislative procedure.