Brussels, 29/06/2012 (Agence Europe) - The EU Council and the European Parliament reached an agreement in trialogue on 28 June on European venture capital funds and European social entrepreneurship funds, two regulations put forward in December 2011 by Commissioner Michel Barnier to facilitate access by SMEs to venture capital and funding, and to boost financing for social entrepreneurs. The EP committee on economic and monetary affairs had adopted both of its reports on the subject on 31 May, after which the trialogue negotiations were held by the parties concerned.
Michel Barnier, European Commissioner for Internal Market and Services, welcomed the agreement which “sends an important signal that taking concrete measures to aid growth in Europe is at the heart of our work”. He went on to point out that the heads of state and/or government, in their conclusions to the summit on 1 and 2 March this year, had already called for an ambitious agreement on the two proposals and especially for an effective EU-wide venture capital scheme comprising an “EU passport” which, among other things, would guarantee that the holder of that passport complies with a number of quality criteria.
The two new regulations concluded on Thursday introduce a label for funds investing in SMEs and social enterprises in order to make them more easily identifiable for investors, the Commission explains.
The regulation on European venture capital funds “will make it easier for venture capitalists to raise funds across Europe for the benefit of start-ups”. From now on, “once a set of requirements is met, all qualifying fund managers can raise capital under the designation 'European venture capital fund' across the EU. No longer will they have to meet complicated requirements which are different in every member state”, a Commission press release points out. By introducing a single rulebook, venture capital funds will have the potential to attract more capital commitments and become bigger.
The regulation on European social entrepreneurship funds also creates the new “European social entrepreneurship funds” label, intended to help investors to “easily identify funds that focus on investing in European social businesses”, the Commission states. In order to have the benefit of that label, the funds must invest for the most part in SMEs or social businesses. The label is part and parcel of the registration of the fund with the home country regulator. “Once the requirements defined in the proposal are met, managers of social investment funds will be able to market their funds across the whole of Europe. To get the label, a fund will have to prove that a high percentage of investments (70% of the capital received from investors) is spent in supporting social business”, the Commission explains. Formal adoption of the two regulations is due in coming months. (SP/transl.jl)