EuVECA and EuSEF: delegated regulations on conflicts of interest
The European Venture Capital Funds (EuVECA) Regulation (EU) No 345/2013 and the European Social Entrepreneurship Funds (EuSEF) Regulation (EU) No 346/2013 provide for a special framework for managers to apply for a ‘EuVECA’ or ‘EuSEF’ label for marketing funds.
On 22 May 2019, as regards these regulations, two delegated regulations of the European Commission on conflicts of interest were published in the Official Journal of the EU:
• Delegated Regulation (EU) 2019/819 supplementing the EuSEF Regulation with regard to conflicts of interest, social impact measurement and information to investors (link); and
• Delegated Regulation (EU) 2019/820 supplementing the EuVECA Regulation with regard to conflicts of interest (link).
The regulations provide for rules governing the types of conflicts of interest, the requirement to establish a written conflicts of interest policy and the procedures and measures this policy must at least include, managing conflicts of interest, strategies for the exercise of voting rights to prevent conflicts of interest and disclosure of conflicts of interest.
In addition, the delegated regulation supplementing the EuSEF Regulation also includes rules with respect to the procedures to measure positive social impact and the information to be provided to investors regarding (i) the description of the investment strategy and objectives of the EuSEF fund, (ii) the positive social impact, (iii) the information on methodologies used to measure social impact, (iv) the description of non-qualifying assets and (v) support services.
The delegated regulations entered into force on 11 June 2019 and shall apply from 11 December 2019.