The inter-institutional negotiations will continue on Tuesday 30 March on two proposals of the European Commission issued in the framework of its Capital Markets Union (CMU) project: the first aims to stimulate venture capital and social entrepreneurship, the second to breathe new life into the markets for securitised financial products.
According to several European sources, political agreements are expected on both dossiers.
Venture capital. On 11 May, just one hour was earmarked for the first negotiations on the legislative proposal to revise the regulations of European legislation governing the activities of venture capital funds (EuVECA) and social entrepreneurship funds (EuSEF).
For this second trialogue, the stumbling blocks are the same as before: the reinforced role of the European Securities and Markets Authority (ESMA) in the registration process, as proposed by the European Parliament, and the level of capital the funds in question must hold in order to carry out their activities in the EU.
Readers may recall that the European Parliament brought in capital requirements for both types of fund at €30,000, compared to €50,000 proposed by the Council. It also agreed that own funds should represent at least one eighth of the fixed costs of the previous year, whilst the Commission proposed one sixth (see EUROPE 11752).
The points of consensus announced include a relaxed definition of the SMEs in which funds must invest 70% of the capital subscribed by their clients in order to obtain the European passport, and the maximum number of employees of an eligible SME, which has been set at 499 (see EUROPE 11785).
According to one European source, the text of the member states and of the Parliament are in fact not poles apart, which will open the door to a political agreement at this second trialogue.
Securitisation. The positions of the Parliament and of the Council of the EU have moved closer together on the legislative proposal to revitalise the markets for securitised financial products, giving rise to hopes that this sixth trialogue session will be the last (see EUROPE 11794).
The main sticking point on this dossier concerns the hierarchy of risk calculation methods used to assess the minimum capital requirements for securitisation exposures. The other outstanding questions are the risk retention threshold and equivalence for third countries (see EUROPE 11790).
“It is urgent now that we adopt this initiative so that we can make real progress with the Capital Markets Union and ensure it can have a positive impact on the real economy”, a Commission spokesperson told us after the last trialogue, which was held on 16 May.
The Commission is hoping for a speedy positive outcome for these two legislative proposals, as it is to present new initiatives to redirect the CMU project on Wednesday 7 June (see EUROPE 11793). (Original version in French Marion Fontana)