The new rules on European venture capital and social entrepreneurship funds create a special EU passport for all operators that invest in start-up SMEs and social businesses.
The proposals provide a new simple scheme: once a set of requirements is met, fund managers can market their funds across the EU, cutting through current rules on “private placements” that are different in every EU state. They will not need to register and obtain marketing approval in each Member State.
The rules also make sure that the funds focus at least 70% of the capital they raise on equity investments in unlisted SMEs or on equity or debt support for social enterprises.
Two new fund labels for both venture capital funds investing in unlisted SMEs (EuVECA) and for funds investing in social businesses (EuSEF) were created.
After the vote in the European Parliament, the Council is expected to adopt both Regulations on 21 March. They will both enter into force 20 days after their publication in the Official Journal of the European Union which is estimated to be before the summer.