The European Parliament
and Council have given final approval to the Venture Capital Regulation, creating an effective EU-wide
venture capital fund regime including an EU passport. The overall objective
is to foster the growth of small and medium-sized enterprises by improving
their access to finance through the establishment of an EU-wide passport for
managers of venture capital funds and relating to the marketing of their funds.
The Regulation will enter
into force 20 days after its publication in the Official Journal of the
European Union, which is expected to be sometime in the next few months.
The Regulation introduces uniform requirements for
the managers of collective investment undertakings that want to operate under
the E.U.-wide passport. There are requirements concerning the investment
portfolio, investment techniques and eligible undertakings that a qualifying
fund may target. The Regulation also sets forth uniform rules on which categories
of investors in a European fund may target and on the internal organization
deployed by managers that market such funds. Internal Market Commissioner
Michel Barnier envisions that identical rules across the E.U. will help create
a level playing field for all market participants.