EUROPEAN UNION: EuSEF and EuVEC Amending Regulations Published

Friday September 1 2017

On 27 June 2017, the Council published the final text of the review of the European Venture Capital Funds (EuVECA) and of the European Social Entrepreneurship Funds (EuSEF) regulations. The EuVECA and the EuSEF regulations initially became applicable on 22 July 2013.

The European venture capital funds (EuVECA) regulation covers a subcategory of alternative investment schemes that focus on start-ups and early stage companies. Venture capital investment is an important source of long-term financing to young and innovative companies.

The European social entrepreneurship funds (EuSEF) regulation covers alternative investment schemes that focus on social enterprises. These are companies that are set up with the explicit aim to have a positive social impact and address social objectives, rather than only maximising profit. While these enterprises often receive public support, private investment via funds still remains vital to their growth.

In the final text, the following key changes have been agreed:

• Authorised AIFMs will from now on be able to market and manage these vehicles;
• The range of companies in which EuVECAs can invest is expanded to include unlisted companies with up to 499 employees (small mid-caps) and SMEs listed on SME growth markets;
• The text explicitly prohibits fees imposed by competent authorities of host Member States where no supervisory activity is performed. It also simplifies the registration processes. In addition the text indicates the minimal capital necessary to become manager of EuSEFs and EuVECAs, i.e. EUR 50,000 for both internally managed vehicles and external managers.

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