Regulation (EU) No 346/2013 of the European Parliament and of the CouncilShow full title

CHAPTER III SUPERVISION AND ADMINISTRATIVE COOPERATION

Article 15

1. Managers of qualifying social entrepreneurship funds that intend to use of the designation ‘EuSEF’ for the marketing of their qualifying social entrepreneurship funds shall inform the competent authority of their home Member State of their intention and shall provide the following information:

(a) the identity of the persons who effectively conduct the business of managing qualifying social entrepreneurship funds;

(b) the identity of the qualifying social entrepreneurship funds, the units or shares of which are to be marketed and their investment strategies;

(c) information on the arrangements made for complying with the requirements of Chapter II;

(d) a list of Member States where the manager of a qualifying social entrepreneurship fund intends to market each qualifying social entrepreneurship fund;

(e) a list of Member States where the manager of a qualifying social entrepreneurship fund has established, or intends to establish, qualifying social entrepreneurship funds.

2. The competent authority of the home Member State shall register the qualifying social entrepreneurship fund manager only if the following conditions are met:

(a) the persons who effectively conduct the business of managing qualifying social entrepreneurship funds are of sufficiently good repute and are sufficiently experienced also in relation to the investment strategies pursued by the manager of a qualifying social entrepreneurship fund;

(b) the information required referred to in paragraph 1 is complete;

(c) the arrangements notified according to in point (c) of paragraph 1 are suitable for complying with the requirements of Chapter II;

(d) the list notified according to point (e) of paragraph 1 reveals that all of the qualifying social entrepreneurship funds are established in accordance with point (b)(iii) of Article 3(1) of this Regulation.

3. Registration under this Article shall be valid in the entire territory of the Union and shall allow managers of qualifying social entrepreneurship funds to market qualifying social entrepreneurship funds under the designation ‘EuSEF’ throughout the Union.

Article 16

Managers of qualifying social entrepreneurship funds shall inform the competent authority of the home Member State where they intend to market:

(a)

a new qualifying social entrepreneurship fund; or

(b)

an existing qualifying social entrepreneurship fund in a Member State not mentioned in the list referred to in point (d) of Article 15(1).

Article 17

1. Immediately after the registration of a manager of a qualifying social entrepreneurship fund, the addition of a new qualifying social entrepreneurship fund, the addition of a new domicile for the establishment of a qualifying social entrepreneurship fund or the addition of a new Member State where a manager of a qualifying social entrepreneurship fund intends to market qualifying social entrepreneurship funds, the competent authority of the home Member State shall notify the Member States indicated in accordance with point (d) of Article 15(1) and ESMA, accordingly.

2. The host Member States indicated in accordance with point (d) of Article 15(1) of this Regulation shall not impose, on the manager of a qualifying social entrepreneurship fund registered in accordance with Article 15, any requirements or administrative procedures in relation to the marketing of its qualifying social entrepreneurship fund, nor shall they require any approval of the marketing prior to its commencement.

3. In order to ensure uniform application of this Article, ESMA shall develop draft implementing technical standards to determine the format of the notification under this Article.

4. ESMA shall submit those draft implementing technical standards to the Commission by 16 February 2014.

5. Power is conferred on the Commission to adopt the implementing technical standards referred to in paragraph 3 in accordance with the procedure laid down in Article 15 of Regulation (EU) No 1095/2010.

Article 18

ESMA shall maintain a central database, publicly accessible on the internet, listing all managers of qualifying social entrepreneurship funds, registered in accordance with Article 15, and the qualifying social entrepreneurship funds that they market, as well as the countries in which those funds are marketed.

Article 19

1. The competent authority of the home Member State shall supervise compliance with the requirements laid down in this Regulation.

2. Where there are clear and demonstrable grounds that lead the competent authority of the host Member State to believe that the manager of a qualifying social entrepreneurship fund is in breach of this Regulation within its territory, it shall promptly inform the competent authority of the home Member State accordingly. The competent authority of the home Member State shall take appropriate measures.

3. If the manager of a qualifying social entrepreneurship fund persists in acting in a manner that is clearly in breach of this Regulation despite measures taken by the competent authority of the home Member State or because that competent authority has failed to take measures within reasonable time, the competent authority of the host Member State may, after informing the competent authority of the home Member State, take all the appropriate measures in order to protect investors, including prohibiting the manager of a qualifying social entrepreneurship fund from carrying out any further marketing of its qualifying social entrepreneurship funds within the territory of the host Member State.

Article 20

Competent authorities shall, in accordance with national law, have all supervisory and investigatory powers that are necessary for the exercise of their functions. They shall, in particular, have the power to:

(a)

request access to any document in any form, and to receive or take a copy of it thereof;

(b)

require the manager of a qualifying social entrepreneurship fund to provide information without delay;

(c)

require information from any person related to the activities of the manager of a qualifying social entrepreneurship fund or the qualifying social entrepreneurship fund;

(d)

carry out on-site inspections with or without prior announcement;

(e)

take appropriate measures to ensure that a manager of a qualifying social entrepreneurship fund continues to comply with this Regulation;

(f)

issue an order to ensure that a manager of a qualifying social entrepreneurship fund complies with this Regulation and desists from a repetition of any conduct that may consist of a breach of this Regulation.

Article 21

1. Member States shall lay down the rules on administrative penalties and other measures applicable to breaches of the provisions of this Regulation and shall take all measures necessary to ensure that they are implemented. The administrative penalties and other measures provided for shall be effective, proportionate and dissuasive.

2. By 16 May 2015 the Member States shall notify the Commission and ESMA of the rules referred to in paragraph 1. They shall notify the Commission and ESMA without delay of any subsequent amendment thereto.

Article 22

1. The competent authority of the home Member State shall, while respecting the principle of proportionality, take the appropriate measures referred to in paragraph 2 where a manager of a qualifying social entrepreneurship fund:

(a) fails to comply with the requirements that apply to the portfolio composition, in breach of Article 5;

(b) markets, in breach of Article 6, the units and shares of a qualifying social entrepreneurship fund to non-eligible investors;

(c) uses the designation ‘EuSEF’ but is not registered in accordance with Article 15;

(d) uses the designation ‘EuSEF’ for the marketing of funds which are not established in accordance with point (b)(iii) of Article 3(1);

(e) has obtained registration through false statements or any other irregular means in breach of Article 15;

(f) fails to act honestly, fairly or with due skill, care or diligence, in conducting their business, in breach of point (a) of Article 7;

(g) fails to apply appropriate policies and procedures for preventing malpractices, in breach of point (b) of Article 7;

(h) repeatedly fails to comply with the requirements under Article 13 regarding the annual report;

(i) repeatedly fails to comply with the obligation to inform investors in accordance with Article 14.

2. In the cases referred to in paragraph 1, the competent authority of the home Member State shall, as appropriate:

(a) take measures to ensure that the manager of a qualifying social entrepreneurship fund concerned complies with Articles 5 and 6, points (a) and (b) of Article 7 and Articles 13, 14 and 15;

(b) prohibit the use of the designation ‘EuSEF’ and remove the manager of a qualifying social entrepreneurship fund concerned from the register.

3. The competent authority of the home Member State shall inform the competent authorities of the host Member States in accordance with point (d) of Article 15(1) and ESMA, without delay, of the removal of the manager of a qualifying social entrepreneurship fund from the register referred to in point (b) of paragraph 2 of this Article.

4. The right to market one or more qualifying social entrepreneurship funds under the designation ‘EuSEF’ in the Union expires with immediate effect from the date of the decision of the competent authority referred to in point (b) of paragraph 2.

Article 23

1. Competent authorities and ESMA shall cooperate with each other for the purpose of carrying out their respective duties under this Regulation in accordance with Regulation (EU) No 1095/2010.

2. Competent authorities and ESMA shall exchange all information and documentation necessary to carry out their respective duties under this Regulation in accordance with Regulation (EU) No 1095/2010, in particular to identify and remedy breaches of this Regulation.

Article 24

1. All persons who work or who have worked for the competent authorities or for ESMA, as well as auditors and experts instructed by the competent authorities or by ESMA, are bound by the obligation of professional secrecy. No confidential information which those persons receive in the course of their duties shall be divulged to any person or authority whatsoever, save in summary or aggregate form such that managers of qualifying social entrepreneurship funds and qualifying social entrepreneurship funds cannot be individually identified, without prejudice to cases covered by criminal law and proceedings under this Regulation.

2. The competent authorities of the Member States or ESMA shall not be prevented from exchanging information in accordance with this Regulation or other Union law applicable to managers of qualifying social entrepreneurship funds and qualifying social entrepreneurship funds.

3. Where competent authorities or ESMA receive confidential information in accordance with paragraph 2, they may use it only in the course of their duties and for the purpose of administrative and judicial proceedings.

Article 25

In the event of disagreement between competent authorities of Member States on an assessment, action or omission of one competent authority in areas where this Regulation requires cooperation or coordination between competent authorities from more than one Member State, competent authorities may refer the matter to ESMA, which may act in accordance with the powers conferred on it under Article 19 of Regulation (EU) No 1095/2010, in so far as the disagreement does not relate to point (b)(i) or to point (d)(i) of Article 3(1) of this Regulation.