EU proposes venture capital-friendly fundraising rules

The EU has issued a press release outlining its plan to improve lending facilities to SMEs. The proposal regards increased financial support sources from the EU budget and the European Investment Bank (EIB), but also new provisions of venture capital funds.

The provisions will improve fundraising conditions for venture capital funds across Europe by providing a passport regime like the system proposed by the AIFMD. Qualifying venture funds will be able to market their funds across all 27 member states of the European Union after obtaining the passport.

The EVCA commented that a venture capital-specific passport system was an important step towards overcoming the current economic crisis, but that it was of utmost importance to ensure appropriate qualifying conditions for venture funds under the new provisions.

The requirements for the passport will be laid out in a uniform single rulebook, which will prevent funds from having to comply with different regulatory regimes in each member state. The European Commission expects the new rules to potentially attract more capital commitments and thereby increase the size of venture funds.

According to the EU, increasing the size of funds will keep SMEs from having to fall back on short-term bank loans.

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• Topics
• Regulation
• EU Commission
• AIFM Directive
• EVCA