Today was a good day for European venture capital. In Strasbourg, the European Parliament voted to approve the European Venture Capital Funds Regulation (EVCFR).
613 members of parliament were in favour, 24 against and 41 abstained.
While the EVCFR still needs formal approval by the Council of Ministers, this is an important step towards simplifying cross border fundraising.
The EVCFR is a voluntary passport which funds can apply for. In order to get it they have to abide by certain uniform rules and requirements.
The EVCA has worked closely with EU policymakers to try and get the regulation right since before it was formally proposed by the European Commission in December 2011.
We are pleased with the results. For example, legislators recognised the need to protect venture capital from rules designed for financial market traders, such as the requirement to appoint a depositary, after we engaged with them.
A review is scheduled in two years which could see the regulation expanded to non EU established funds. Until the review is over only EU funds can benefit from the regulation.
The Commission is now exploring delivery mechanisms for our funds of funds proposal. This proposal aims to solve some of the difficulties venture capital has in raising capital.
The EVCFR is part of the Commission’s action plan to increase access to finance for SMEs. Read our September 2011 briefing: Helping SMEs drive growth for Europe.