The European Commission has published two proposals to further the Single Market on investment management on two specific fields: venture capital and social entrepreneurship.
The Commission notes that in the context of the current crisis, marked by a fall in lending to the real economy, it is increasingly difficult for SMEs to access loans. Therefore The Commission proposes a regulation to set uniform rules for the marketing of venture capital funds. Venture capital is an alternative source of finance to SMEs to invest and grow.
The Commission has also proposed a new "European Social Entrepreneurship Fund" label. 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. Uniform rules on disclosure will ensure that investors get clear and effective information on these investments.
Peter De Proft (pictured), Director General of EFAMA, says: “EFAMA welcomes the Commission’s approach which recognises the important role that investment management can play in financing the growth of future European success stories. Financing SMEs is crucial to support the European economy and build up the industrial future of Europe. Social entrepreneurship in its part is a very worthy cause and investment managers are certainly willing to play their part to provide these new products, within the remit given by their clients. We fully support the Commission efforts to avail these new products to investors for them to participate in financing the growth of SMEs and social entrepreneurship in Europe and look forward to discuss further how to make these proposals a reality.”
