The European Parliament, the Council of the EU and the European Commission have reached agreement on the European venture capital funds Regulation review. The Commission originally proposed an overhaul of the existing European Venture Capital Funds (EuVECA) and the European Social Entrepreneurship Funds (EuSEF) regulations in 2016 as part of the Capital Markets Union Action Plan.
Specifically, the agreement reached:
- extends the range of managers eligible to market and manage EuVECA and EuSEF funds to larger fund managers, i.e. those with assets under management of more than €500 million;
- expands the ability of EuVECA funds to invest in small mid-caps and small and medium enterprises (SMEs) listed on SME growth markets. This should increase the diversification possibilities offered by EuVECA and EuSEF funds and, therefore, make them more attractive to investors; and
- decreases the costs by explicitly prohibiting fees imposed by competent authorities of host Member States where no supervisory activity is performed. It also simplifies the registration processes and determines the minimum capital necessary to become a manager.
Vice-President Valdis Dombrovskis, in charge of Financial Stability, Financial Services and Capital Markets Union, said:
“Today’s agreement removes another barrier to venture investment at EU level. The reforms we have agreed – expanding investment possibilities for funds, broadening the range of eligible managers and simplifying administration – will help investor capital reach the SMEs that need it.”