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

Regulation (EU) No 346/2013 of the European Parliament and of the Council

of 17 April 2013

on European social entrepreneurship funds

(Text with EEA relevance)

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 114 thereof,

Having regard to the proposal from the European Commission,

After transmission of the draft legislative act to the national parliaments,

Having regard to the opinion of the European Central Bank(1),

Having regard to the opinion of the European Economic and Social Committee(2),

Acting in accordance with the ordinary legislative procedure(3),

Whereas:

(1) Increasingly, as investors also pursue social goals and are not only seeking financial returns, a social investment market has been emerging in the Union, comprising, in part, investment funds targeting social undertakings. Such investment funds provide funding to social undertakings that act as drivers of social change by offering innovative solutions to social problems, for example by helping to tackle the social consequences of the financial crisis, and by making a valuable contribution to meeting the objectives of the Europe 2020 Strategy set out in the Commission Communication of 3 March 2010 entitled ‘Europe 2020: A strategy for delivering smart, sustainable and inclusive growth’.

(2) This Regulation is part of the Social Business Initiative established by the Commission in its Communication of 25 October 2011 entitled ‘Social Business Initiative — Creating a favourable climate for social enterprises, key stakeholders in the social economy and innovation’.

(3) It is necessary to lay down a common framework of rules regarding the use of the designation ‘EuSEF’ for qualifying social entrepreneurship funds, in particular on the composition of the portfolio of funds that operate under that designation, their eligible investment targets, the investment tools they may employ and the categories of investors that are eligible to invest in them by uniform rules in the Union. In the absence of such a common framework, there is a risk that Member States take diverging measures at national level having a direct negative impact on, and creating obstacles to, the proper functioning of the internal market, since funds that wish to operate across the Union would be subject to different rules in different Member States. Moreover, diverging quality requirements on portfolio composition, investment targets and eligible investors could lead to different levels of investor protection and generate confusion as to the investment proposition associated with qualifying social entrepreneurship funds. Investors should, furthermore, be able to compare the investment propositions of different qualifying social entrepreneurship funds. It is necessary to remove significant obstacles to cross-border fundraising by qualifying social entrepreneurship funds, to avoid distortions of competition between those funds, and to prevent any further likely obstacles to trade and significant distortions of competition from arising in the future. Consequently, the appropriate legal basis for this Regulation is Article 114 of the Treaty on the Functioning of the European Union (TFEU), as interpreted by consistent case law of the Court of Justice of the European Union.

(4) It is necessary to adopt a regulation establishing uniform rules applicable to qualifying social entrepreneurship funds and imposing corresponding obligations on their managers in all Member States that wish to raise capital across the Union using the designation ‘EuSEF’. Those requirements should ensure the confidence of investors that wish to invest in such funds. The regulation should not apply to existing national schemes that allow investment in social businesses and that do not use the designation ‘EuSEF’.

(5) Defining the quality requirements for the use of the designation ‘EuSEF’ in the form of a regulation ensures that those requirements are directly applicable to the managers of collective investment undertakings that raise funds using that designation. This also ensures uniform conditions for the use of the designation by preventing diverging national requirements as a result of the transposition of a directive. Managers of collective investment undertakings that use the designation should follow the same rules across the Union, which will also boost the confidence of investors. This Regulation reduces regulatory complexity and the managers’ costs of compliance with often divergent national rules governing such funds, especially for those managers that want to raise capital on a cross-border basis. It also contributes to eliminating competitive distortions.

(6) It should be possible for a qualifying social entrepreneurship fund to be externally or internally managed. Where a qualifying social entrepreneurship fund is internally managed, the fund is also the manager and should therefore comply with all relevant requirements for managers under this Regulation and be registered in accordance with this Regulation. A qualifying social entrepreneurship fund which is internally managed should not, however, be permitted to be the external manager of other collective investment undertakings or of undertakings for collective investment in transferable securities (UCITS).

(7) In order to clarify the relationship between this Regulation and other rules on collective investment undertakings and their managers, it is necessary to establish that this Regulation only apply to managers of collective investment undertakings other than UCITS falling within the scope of Directive 2009/65/EC of the European Parliament and of the Council of 13 July 2009 on the coordination of laws, regulations, and administrative provisions, relating to undertakings for collective investment in transferable securities (UCITS)(4), which are established in the Union and are registered with the competent authority in their home Member State in accordance with Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers(5), provided that those managers manage portfolios of qualifying social entrepreneurship funds. However, external managers of qualifying social entrepreneurship funds that are registered under this Regulation should also be allowed to manage UCITS, subject to authorisation under Directive 2009/65/EC.

(8) Furthermore, this Regulation applies only to managers of those collective investment undertakings with assets under management that in total do not exceed the threshold referred to in point (b) of Article 3(2) of Directive 2011/61/EU. The calculation of the threshold for the purposes of this Regulation is the same as for the threshold of point (b) of Article 3(2) of Directive 2011/61/EU.

(9) However, managers registered in accordance with this Regulation and with assets under management that in total subsequently exceed the threshold referred to in point (b) of Article 3(2) of Directive 2011/61/EU, and that therefore become subject to authorisation with the competent authorities of their home Member State in accordance with Article 6 of that Directive, should be able to continue to use the designation ‘EuSEF’ in relation to the marketing of qualifying social entrepreneurship funds in the Union, provided that they comply with the requirements laid down in that Directive and that they continue to comply with certain requirements for the use of the designation ‘EuSEF’ specified in this Regulation at all times in relation to the qualifying social entrepreneurship fund. This applies both to existing qualifying social entrepreneurship funds and to qualifying social entrepreneurship funds established after exceeding the threshold.

(10) Where managers of collective investment undertakings do not wish to use the designation ‘EuSEF’ then this Regulation does not apply. In those cases, existing national rules and general Union rules should continue to apply.

(11) This Regulation should establish uniform rules on the nature of qualifying social entrepreneurship funds, in particular on qualifying portfolio undertakings into which the qualifying social entrepreneurship funds are to be permitted to invest, and the investment instruments to be used. This is necessary so that a clear demarcation line can be drawn between a qualifying social entrepreneurship fund and alternative investment funds that engage in other, less specialised, investment strategies, for example buyouts, which this Regulation is not seeking to promote.

(12) In order to ensure the necessary clarity and certainty, this Regulation should also lay down uniform criteria to identify social undertakings as qualifying portfolio undertakings. A social undertaking should be defined as an operator in the social economy, the main objective of which is to have a social impact rather than to make a profit for its owners or shareholders. It operates by providing goods and services for the market and uses its profits primarily to achieve social objectives. It is managed in an accountable and transparent manner, in particular, by involving employees, consumers and stakeholders that are affected by its commercial activities.

(13) As the principal objective of social undertakings is to have a positive social impact rather than to maximise profits this Regulation should only promote support for qualifying portfolio undertakings that have the achievement of a measurable and positive social impact as their focus. A measurable and positive social impact could include the provision of services to immigrants who are otherwise excluded, or the reintegration of marginalised groups into the labour market by providing employment, training or other support. Social undertakings use their profits to achieve their primary social objective and are managed in an accountable and transparent way. Where, on an exceptional basis, a qualifying portfolio undertaking wishes to distribute profits to its shareholders and owners, it should have predefined procedures and rules on how profits are to be distributed. Those rules should specify that such distribution of profits does not undermine the primary social objective of the qualifying social portfolio undertaking.

(14) Social undertakings include a large range of undertakings, taking various legal forms, which provide social services or goods to vulnerable, marginalised, disadvantaged or excluded persons. Such services include access to housing, healthcare, assistance for elderly or disabled persons, child care, access to employment and training as well as dependency management. Social undertakings also include undertakings that employ a method of production of goods or services which embodies their social objective, but the activities of which be outside the realm of the provision of social goods or services. Those activities include social and professional integration by means of access to employment for people disadvantaged in particular by insufficient qualifications or social or professional problems leading to exclusion and marginalisation. Those activities may also concern environmental protection with a societal impact, such as anti-pollution, recycling and renewable energy.

(15) In line with the aim of precisely circumscribing the collective investment undertakings which are to be covered by this Regulation and in order to ensure a focus on providing capital to social undertakings, qualifying social entrepreneurship funds should be deemed to be funds that intend to invest at least 70 % of their aggregate capital contributions and uncalled committed capital in such undertakings. Qualifying social entrepreneurship funds should not be permitted to invest more than 30 % of their aggregate capital contributions and uncalled committed capital in assets other than qualifying investments. This means that whereas the 30 % threshold should be the maximum limit for non-qualifying investments at all times, the 70 % threshold should be reserved for qualifying investments during the life of the qualifying social entrepreneurship fund. Those thresholds should be calculated on the basis of amounts investible after deduction of all relevant costs and holdings of cash and cash equivalents. This Regulation should set out the details necessary for the calculation of the referred investment thresholds.

(16) The purpose of this Regulation is to enhance the growth of social undertakings in the Union. Investments in qualifying portfolio undertakings established in third countries can bring more capital to qualifying social entrepreneurship funds and can thereby benefit social undertakings in the Union. However, under no circumstances should this Regulation benefit investments made in portfolio undertakings established in third countries characterised by a lack of appropriate cooperation arrangements between the competent authorities of the home Member State of the manager of the qualifying social entrepreneurship fund and with each other Member State in which the units or shares of the qualifying social entrepreneurship fund are intended to be marketed or by a lack of effective exchange of information in tax matters.

(17) A qualifying social entrepreneurship fund should, as a first step, be established in the Union in order to be entitled to use the designation ‘EuSEF’ as established by this Regulation. The Commission should, within two years of the date of application of this Regulation, review the limitation on the use of the designation ‘EuSEF’ to funds established in the Union, taking into account experience of applying the Commission Recommendation regarding measures intended to encourage third countries to apply minimum standards of good governance in tax matters.

(18) Managers of social entrepreneurship funds should be able to attract additional capital commitments during the life of a fund. Such additional capital commitments during the life of the qualifying social entrepreneurship fund should be taken into account when the next investment in assets other than qualifying assets is contemplated. Additional capital commitments should be permitted in accordance with criteria and subject to conditions set out in the qualifying social entrepreneurship fund’s rules or instruments of incorporation.

(19) Taking into account the specific funding needs of social undertakings, it is necessary to achieve clarity regarding the types of instruments that a qualifying social entrepreneurship fund should use for such funding. Therefore, this Regulation lays down uniform rules on the eligible instruments to be used by a qualifying social entrepreneurship fund when making investments, which include equity and quasi-equity instruments, debt instruments, such as promissory notes and certificates of deposit, investments into other qualifying social entrepreneurship funds, secured or unsecured loans, and grants. To prevent dilution of the investments into qualifying portfolio undertakings, qualifying social entrepreneurship funds should only be permitted to invest in other qualifying social entrepreneurship funds where those other qualifying social entrepreneurship funds have not themselves invested more than 10 % of their aggregate capital contributions and uncalled committed capital into other qualifying social entrepreneurship funds.

(20) The core activities of qualifying social entrepreneurship funds are to provide financing to social undertakings through primary investments. Qualifying social entrepreneurship funds should neither participate in systemically important banking activities outside of the usual prudential regulatory framework (so-called ‘shadow banking’) nor follow typical private equity strategies, such as leveraged buyouts.

(21) To maintain the necessary flexibility in its investment portfolio, qualifying social entrepreneurship funds should be able to invest in assets other than qualifying investments to the extent that those other investments do not exceed the 30 % threshold for non-qualifying investments. Holdings of cash and cash equivalents should not be taken into account for the calculation of that threshold because such holdings are not to be considered as investments. Qualifying social entrepreneurship funds should invest in a manner consistent with their ethical investment strategy, for instance they should not undertake investments that finance the weapons industry, that risk breaches of human rights or that entail electronic waste-dumping.

(22) In order to ensure that the designation ‘EuSEF’ is reliable and easily recognisable for investors across the Union only managers of qualifying social entrepreneurship funds that comply with the uniform quality criteria as set out in this Regulation should be eligible to use the designation ‘EuSEF’ when marketing qualifying social entrepreneurship funds across the Union.

(23) In order to ensure that qualifying social entrepreneurship funds have a distinct and identifiable profile which is suited to their purpose, there should be uniform rules on the composition of the portfolio and on the investment techniques which are permitted for such funds.

(24) In order to ensure that qualifying social entrepreneurship funds do not contribute to the development of systemic risks, and that such funds concentrate, in their investment activities, on supporting qualifying portfolio undertakings, the use of leverage at the level of the fund should not be permitted. Managers of qualifying social entrepreneurship funds should only be permitted to borrow, issue debt obligations or provide guarantees, at the level of the qualifying social entrepreneurship fund, provided that such borrowings, debt obligations or guarantees are covered by uncalled commitments and thus do not increase the exposure of the fund beyond the level of its committed capital. Cash advances from investors of qualifying social entrepreneurship funds that are fully covered by capital commitments from those investors do not increase the exposure of the qualifying social entrepreneurship fund and should therefore be allowed. Also, in order to permit the fund to cover extraordinary liquidity needs that might arise between a call of committed capital from investors and the actual reception of the capital in its accounts, short-term borrowing should be allowed provided that the amount of such borrowing does not exceed the fund’s uncalled committed capital.

(25) In order to ensure that qualifying social entrepreneurship funds are only marketed to investors who have the experience, knowledge and expertise to make their own investment decisions and properly assess the risks that those funds carry, and in order to maintain investor confidence and trust in qualifying social entrepreneurship funds, certain specific safeguards should be laid down. Therefore, qualifying social entrepreneurship funds should only be marketed to investors who are professional clients or who can be treated as professional clients under Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments(6). However, in order to have a sufficiently broad investor base for investments into qualifying social entrepreneurship funds it is also desirable that certain other investors have access to these funds, including high net worth individuals. For those other investors, specific safeguards should be laid down in order to ensure that qualifying social entrepreneurship funds are only marketed to investors that have the appropriate profile for making such investments. Those safeguards exclude marketing through the use of periodic savings plans. Furthermore, investments made by executives, directors or employees involved in the management of a manager of a qualifying social entrepreneurship fund should be possible when investing in the qualifying social entrepreneurship funds they manage, as such individuals are knowledgeable enough to participate in such investments.

(26) To ensure that only managers of qualifying social entrepreneurship funds that fulfil uniform quality criteria as regards their behaviour in the market use the designation ‘EuSEF’, there should be rules on the conduct of business and the relationship of those managers with their investors. For the same reason, uniform conditions concerning the handling of conflicts of interest by such managers should be established. Those rules and conditions should also require the manager to have the necessary organisational and administrative arrangements in place to ensure a proper handling of conflicts of interest.

(27) Where a manager of a qualifying social entrepreneurship fund intends to delegate functions to third parties, the manager’s liability towards the qualifying social entrepreneurship fund and the investors therein should not be affected by such delegation of functions to a third party. Moreover, the manager should not delegate functions to the extent that, in essence, it can no longer be considered to be a manager of a qualifying social entrepreneurship fund and has become a letter-box entity. The manager should remain responsible for the proper performance of delegated functions and compliance with this Regulation at all time. The delegation of functions should not undermine the effectiveness of supervision of the manager, and, in particular, should not prevent the manager from acting, or the fund from being managed, in the best interests of its investors.

(28) The creation of positive social impacts in addition to the generation of financial returns for investors is a key characteristic of investment funds targeting social undertakings, one which distinguishes them from other types of investment funds. This Regulation should therefore require that a manager of a qualifying social entrepreneurship fund put in place procedures for measuring the positive social impacts which are to be achieved by investment into qualifying portfolio undertakings.

(29) Currently funds that target social outcomes or impacts typically assess and collate information on the extent to which social undertakings achieve the outcomes or impacts that they are targeting. There are a wide range of different kinds of social outcomes or impacts that a social undertaking might target. Different ways of identifying and measuring the social outcomes or impacts have thereby developed. For instance, a firm that seeks to employ disadvantaged persons may report on the numbers of such persons employed who would not otherwise have been employed and a firm that seeks to improve the rehabilitation of prisoners may assess its performance in terms of recidivism rates. The funds aid the social undertakings in preparing and providing information on their goals and achievements, and gathering it for investors. While information about social outcomes and impacts is very important for investors, it is difficult to compare between different social undertakings and different funds both because of the differences in social outcomes or impacts targeted and because of the variety of approaches. In order to encourage the greatest consistency and comparability of such information in the longer term and the greatest efficiency in the procedures for obtaining the information, delegated acts should be developed in this area. Such delegated acts should also ensure greater clarity for supervisors, qualifying social entrepreneurship funds and social undertakings.

(30) In order to ensure the integrity of the designation ‘EuSEF’, quality criteria as regards the organisation of a manager of a qualifying social entrepreneurship fund should be established. Therefore, uniform, proportionate requirements for the need to maintain adequate technical and human resources should be laid down.

(31) In order to ensure the proper management of qualifying social entrepreneurship funds and the ability of their managers to cover potential risks arising from their activities, uniform, proportionate requirements for managers of qualifying social entrepreneurship funds to maintain sufficient own funds should be laid down. The amount of such own funds should be sufficient to ensure the continuity and proper management of the qualifying social entrepreneurship funds.

(32) It is necessary for the purpose of investor protection to ensure that the assets of qualifying social entrepreneurship funds are properly evaluated. The rules or instruments of incorporation of qualifying social entrepreneurship funds should therefore contain provisions on the valuation of assets. This should ensure the integrity and the transparency of the valuation.

(33) In order to ensure that managers of qualifying social entrepreneurship funds which make use of the designation ‘EuSEF’ give sufficient account of their activities, uniform rules on annual reports should be established.

(34) While safeguards are included in this Regulation to ascertain that funds are properly used, supervisory authorities should be vigilant in ensuring that those safeguards are complied with.

(35) To ensure the integrity of the designation ‘EuSEF’ in the eyes of investors, it is necessary that the designation only be used by managers of qualifying social entrepreneurship funds that are fully transparent as to their investment policy and their investment targets. Uniform rules on disclosure requirements that are incumbent on managers in relation to its investors should therefore be laid down. Those rules should include those elements that are specific to investments into social undertakings, so that greater consistency and comparability of such information can be achieved. This includes information about the criteria and the procedures which are used to select particular qualifying portfolio undertakings as investment targets. This also includes information about the positive social impact to be achieved by the investment policy and how this should be monitored and assessed. To ensure the necessary confidence and the trust of investors in such investments, this further includes information about the assets of the qualifying social entrepreneurship fund which are not invested into qualifying portfolio undertakings and how these are selected.

(36) In order to ensure effective supervision of the uniform requirements contained in this Regulation, the competent authority of the home Member State should supervise compliance of the manager of a qualifying social entrepreneurship fund with the uniform requirements set out in this Regulation. To that end, managers that intend to market their funds under the designation ‘EuSEF’ should inform the competent authority of their home Member State of that intention. The competent authority should register the manager if all necessary information has been provided and if suitable arrangements to comply with the requirements of this Regulation are in place. Such registration should be valid across the entire Union.

(37) In order to facilitate the efficient cross-border marketing of qualifying social entrepreneurship fund, registration of the manager should be effected as quickly as possible.

(38) In order to ensure effective supervision of compliance with the uniform criteria laid down in this Regulation, rules on the circumstances under which information supplied to the competent authority in the home Member State needs to be updated should be established.

(39) For the effective supervision of the requirements laid down in this Regulation, a process for cross-border notifications between the competent supervisory authorities, to be triggered by the registration of a manager of a qualifying social entrepreneurship fund in its home Member State, should also be established.

(40) In order to maintain transparent conditions for the marketing of qualifying social entrepreneurship funds across the Union, the European Supervisory Authority (European Securities and Markets Authority) (‘ESMA’) established by Regulation (EU) No 1095/2010 of the European Parliament and of the Council(7) should be entrusted with maintaining a central database listing all managers of qualifying social entrepreneurship fund and the qualifying social entrepreneurship funds that they manage that are registered in accordance with this Regulation.

(41) Where the competent authority of the host Member State has clear and demonstrable grounds for believing that a manager of a qualifying social entrepreneurship fund is acting in breach of this Regulation within its territory, it should promptly inform the competent authority of the home Member State, which should take appropriate measures.

(42) If a manager of a qualifying social entrepreneurship fund persists in acting in a manner that is clearly in conflict with this Regulation despite the measures taken by the competent authority of the home Member State or because the competent authority of the home Member State fails to take measures within a reasonable timeframe, the competent authority of the host Member State should be able, after informing the competent authority of the home Member State, to take all the appropriate measures in order to protect investors, including the possibility of preventing the manager concerned from carrying out any further marketing of its qualifying social entrepreneurship funds within the territory of the host Member State.

(43) In order to ensure the effective supervision of the uniform criteria established, this Regulation contains a list of supervisory powers that competent authorities must have at their disposal.

(44) In order to ensure proper enforcement, this Regulation contains administrative penalties and other measures for the breach of its key provisions, namely the rules on portfolio composition, on safeguards relating to the identity of eligible investors, and on the use of the designation ‘EuSEF’ only by managers of qualifying social entrepreneurship funds managers that are registered in accordance with this Regulation. A breach of those key provisions should entail, where appropriate, prohibition of the use of the designation and the removal of the manager concerned from the register.

(45) Supervisory information should be exchanged between the competent authorities in the home and host Member States and ESMA.

(46) Effective regulatory cooperation among the entities tasked with supervising compliance with the uniform criteria set out in this Regulation requires that a high level of professional secrecy should apply to all relevant national authorities and to ESMA.

(47) The contribution of qualifying social entrepreneurship funds to the growth of a European market for social investments will depend on the take-up of the designation ‘EuSEF’ by managers of qualifying social entrepreneurship funds, the recognition of the designation by investors and the development of a strong eco-system for social enterprises across the Union that aids those enterprises in availing themselves of the financing options provided. To that end, all stakeholders, including market operators, competent authorities in Member States, the Commission and other relevant entities within the Union, should endeavour to ensure a high level of awareness of the possibilities presented by this Regulation.

(48) In order to specify the requirements set out in this Regulation, the power to adopt acts in accordance with Article 290 TFEU should be delegated to the Commission in respect of specifying the types of goods and services or methods of production for goods and services embodying a social objective and the circumstances in which profits may be distributed to owners and investors, the types of conflicts of interest managers of qualifying social entrepreneurship funds need to avoid and the steps to be taken in that respect, the details of the procedures to measure the social impacts to be achieved by the qualifying portfolio undertakings, and the content and procedure for provision of information for investors. It is of particular importance that the Commission carry out appropriate consultations during its preparatory work, including at expert level, taking into account self-regulatory initiatives and codes of conduct. The consultations carried out by the Commission during its preparatory work regarding delegated acts on the details of the procedures to measure the social impacts to be achieved by the qualifying portfolio undertakings should involve relevant stakeholders and ESMA. The Commission, when preparing and drawing up delegated acts, should ensure a simultaneous, timely and appropriate transmission of relevant documents to the European Parliament and to the Council.

(49) Technical standards in financial services should ensure consistent harmonisation and a high level of supervision across the Union. As a body with highly specialised expertise, it would be efficient and appropriate to entrust ESMA with the elaboration of draft implementing technical standards where these do not involve policy choices, for submission to the Commission.

(50) The Commission should be empowered to adopt implementing technical standards by means of implementing acts pursuant to Article 291 TFEU and in accordance with Article 15 of Regulation (EU) No 1095/2010. ESMA should be entrusted with drafting implementing technical standards for the format of the notification referred to in this Regulation.

(51) Within four years of the date of application of this Regulation, the Commission should carry out a review of this Regulation in order to assess the development of the market of qualifying social entrepreneurship funds across the Union. The review should include a general survey of the functioning of the rules in this Regulation and the experience acquired in applying them. On the basis of the review, the Commission should submit a report to the European Parliament and the Council accompanied, if appropriate, by legislative proposals.

(52) Furthermore, within four years of the date of application of this Regulation, the Commission should start a review of the interaction between this Regulation and other rules on collective investment undertakings and their managers, in particular those of Directive 2011/61/EU. In particular, that review should address the scope of this Regulation assessing whether it is necessary to extend the scope to allow larger alternative investment funds managers to use the designation ‘EuSEF’. On the basis of the review, the Commission should submit a report to the European Parliament and to the Council accompanied, if appropriate, by legislative proposals.

(53) In the context of that review, the Commission should evaluate any barriers that may have impeded the uptake of the funds by investors, including the impact on institutional investors of other regulation as may apply to them of a prudential nature. In addition, the Commission should gather data for assessing the contribution of the designation ‘EuSEF’ to other Union programmes such as Horizon 2020, which also seek to support innovation in the Union.

(54) In relation to the Commission’s examination of tax obstacles to cross-border venture capital investments as provided for in the Commission Communication of 7 December 2011 entitled ‘An action plan to improve access to finance for SMEs’ and in the context of its review of this Regulation, the Commission should consider undertaking an equivalent examination of possible tax obstacles for social entrepreneurship funds and assess possible tax incentives aimed at encouraging social entrepreneurship in the Union.

(55) ESMA should assess its staffing and resources needs arising from the assumption of its powers and duties in accordance with this Regulation and submit a report to the European Parliament, to the Council and to the Commission.

(56) This Regulation respects fundamental rights and observes the principles recognised in particular by the Charter of Fundamental Rights of the European Union, including the right to respect for private and family life (Article 7) and freedom to conduct a business (Article 16).

(57) Directive 95/46/EC of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data(8) governs the processing of personal data carried out in the Member States in the context of this Regulation and under the supervision of the Member States competent authorities, in particular the public independent authorities designated by the Member States. Regulation (EC) No 45/2001 of the European Parliament and of the Council of 18 December 2000 on the protection of individuals with regard to the processing of personal data by the Community institutions and bodies and on the free movement of such data(9), governs the processing of personal data carried out by ESMA within the framework of this Regulation and under the supervision of the European Data Protection Supervisor.

(58) Since the objective of this Regulation, namely to develop an internal market for qualifying social entrepreneurship funds by laying down a framework for the registration of managers of qualifying social entrepreneurship funds, thereby facilitating the marketing of qualifying social entrepreneurship funds throughout the Union, cannot be sufficiently achieved by the Member States and can therefore, by reason of its scale and effects, be better achieved at Union level, the Union may adopt measures in accordance with the principle of subsidiarity as set out in Article 5 of the Treaty on European Union. In accordance with the principle of proportionality, as set out in that Article, this Regulation does not go beyond what is necessary in order to achieve that objective,

HAVE ADOPTED THIS REGULATION:

Modifications etc. (not altering text)

C1 Regulation: power to modify conferred (11.7.2023) by Financial Services and Markets Act 2023 (c. 29), ss. 3, 86(3), Sch. 1 Pt. 1; S.I. 2023/779, reg. 2(d)

CHAPTER I U.K. SUBJECT MATTER, SCOPE AND DEFINITIONS

Article 1 U.K.

This Regulation lays down uniform requirements and conditions for managers of collective investment undertakings that wish to use the designation ‘[F1 SEF]’ in relation to the marketing of qualifying social entrepreneurship funds in the [F2 United Kingdom].

It also lays down F3 ... rules for the marketing of qualifying social entrepreneurship funds to eligible investors [F4 in the United Kingdom], for the portfolio composition of qualifying social entrepreneurship funds, for the eligible investment instruments and techniques to be used by qualifying social entrepreneurship funds as well as for the organisation, conduct and transparency of managers that market qualifying social entrepreneurship funds [F4 in the United Kingdom].

Textual Amendments

F1 Word in Art. 1 substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 3(1)(a)(i) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F2 Words in Art. 1 substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 3(1)(a)(ii) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F3 Word in Art. 1 omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 3(1)(b)(i) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F4 Words in Art. 1 substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 3(1)(b)(ii) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

Article 2 U.K.

1. This Regulation applies to managers of collective investment undertakings as defined in point (a) of Article 3(1) that meet the following conditions:

(a) their assets under management in total do not exceed the threshold referred to in [F5 sub-paragraph (a) of regulation 9(1) of the AIFM Regulations];

(b) they are established in the [F6 United Kingdom];

(c) they are subject to registration with the [F7 FCA in accordance with regulation 10 of the AIFM Regulations]; and

(d) they manage portfolios of qualifying social entrepreneurship funds.

[F8 2. Articles 3 to 6, Articles 10 and 13, points (d), (e) and (f) of Article 14(1), Articles 15a [F9 , 18 and 19]F10 ... 22 and 22a of this Regulation shall apply to managers of collective investment undertakings [F11 who have permission under Part 4A of FSMA to carry on the regulated activity specified by article 51ZC of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (managing an AIF)] [F12 and who manage] portfolios of qualifying social entrepreneurship funds and intend to use the designation ‘[F13 SEF]’ in relation to the marketing of those funds in the [F14 United Kingdom].]

3. Where managers of qualifying social entrepreneurship funds are external managers and are registered in accordance with Article 15, they may additionally manage [F15 UK UCITS (which has the meaning given in section 237 of FSMA)].

Textual Amendments

F5 Words in Art. 2(1)(a) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 3(2)(a)(i) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F6 Words in Art. 2(1)(b) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 3(2)(a)(ii) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F7 Words in Art. 2(1)(c) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 3(2)(a)(iii) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F8 Substituted by Regulation (EU) 2017/1991 of the European Parliament and of the Council of 25 October 2017 amending Regulation (EU) No 345/2013 on European venture capital funds and Regulation (EU) No 346/2013 on European social entrepreneurship funds (Text with EEA relevance).

F9 Words in Art. 2(2) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 3(2)(b)(i) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F10 Words in Art. 2(2) omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 3(2)(b)(ii) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F11 Words in Art. 2(2) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 3(2)(b)(iii) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F12 Words in Art. 2(2) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 3(2)(b)(iv) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F13 Word in Art. 2(2) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 3(2)(b)(v) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F14 Words in Art. 2(2) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 3(2)(b)(vi) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F15 Words in Art. 2(3) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 3(2)(c) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

Article 3 U.K.

1. For the purposes of this Regulation, the following definitions shall apply:

(a) ‘collective investment undertaking’ means an AIF as defined in [F16 regulation 3 of the AIFM Regulations];

(b) ‘qualifying social entrepreneurship fund’ [F17 , unless the contrary intention appears,] means a collective investment undertaking that:

(i)

intends to invest at least 70 % of its aggregate capital contributions and uncalled committed capital in assets that are qualifying investments, calculated on the basis of amounts investible after deduction of all relevant costs and holdings in cash and cash equivalents, within a time frame laid down in its rules or instruments of incorporation;

(ii)

does not use more than 30 % of its aggregate capital contributions and uncalled committed capital for the acquisition of assets other than qualifying investments, calculated on the basis of amounts investible after deduction of all relevant costs and holdings in cash and cash equivalents;

(iii)

is established within the [F18 United Kingdom];

(c) ‘manager of a qualifying social entrepreneurship fund’ means a legal person the regular business of which is managing at least one qualifying social entrepreneurship fund;

(d) ‘qualifying portfolio undertaking’ means an undertaking that:

(i)

at the time of an investment by the qualifying social entrepreneurship fund is not admitted to trading on a [F19 UK regulated market, an EU regulated market, a UK multilateral trading facility or an EU multilateral trading facility (as defined by points (13A), (13B), (14A) and (14B) of Article 2 of the Markets in Financial Instruments Regulation 2014);]

(ii)

[F8 has the achievement of measurable, positive social impacts as its primary objective in accordance with its articles of association, statutes or any other rules or instruments of incorporation establishing the business, where the undertaking:

• provides services or goods which generate a social return;

• employs a method of production of goods or services that embodies its social objective; or

• provides financial support exclusively to social undertakings as defined in the first two indents;]

(iii)

uses its profits primarily to achieve its primary social objective in accordance with its articles of association, statutes or any other rules or instruments of incorporation establishing the business and with the predefined procedures and rules therein, which determine the circumstances in which profits are distributed to shareholders and owners to ensure that any such distribution of profits does not undermine its primary objective;

(iv)

is managed in an accountable and transparent way, in particular by involving workers, customers and stakeholders affected by its business activities;

(v)

is established within the territory of [F20 the United Kingdom,], or in a third country provided that the third country:

• is not listed as a Non-Cooperative Country and Territory by the Financial Action Task Force on Anti-Money Laundering and Terrorist Financing,

• has signed an agreement with the [F21 United Kingdom] to ensure that the third country fully complies with the standards laid down in Article 26 of the OECD Model Tax Convention on Income and on Capital and ensures an effective exchange of information in tax matters, including any multilateral tax agreements;

(e) ‘qualifying investments’ means any of the following instruments:

(i)

equity or quasi-equity instruments that are issued by:

• a qualifying portfolio undertaking and acquired directly by the qualifying social entrepreneurship fund from the qualifying portfolio undertaking,

• a qualifying portfolio undertaking in exchange for an equity security issued by the qualifying portfolio undertaking, or

• an undertaking of which the qualifying portfolio undertaking is a majority-owned subsidiary and which is acquired by the qualifying social entrepreneurship fund in exchange for an equity instrument issued by the qualifying portfolio undertaking;

(ii)

securitised and un-securitised debt instruments, issued by a qualifying portfolio undertaking;

(iii)

units or shares of one or several other qualifying social entrepreneurship funds, provided that those qualifying social entrepreneurship funds have not themselves invested more than 10 % of their aggregate capital contributions and uncalled committed capital [F22 in—

(aa)

qualifying social entrepreneurship funds;

(bb)

European qualifying social entrepreneurship funds (which has the meaning given to ‘qualifying social entrepreneurship funds’ in Article 3(1)(b) of this Regulation as it applies in the European Union, as amended from time to time);]

(iv)

secured or unsecured loans granted by the qualifying social entrepreneurship fund to a qualifying portfolio undertaking;

(v)

any other type of participation in a qualifying portfolio undertaking;

(vi)

[F23 an instrument within the meaning of Article 3(1)(e)(ii) of this Regulation as it applies in the European Union, as amended from time to time;]

(f) ‘relevant costs’ means all fees, charges and expenses which are directly or indirectly borne by investors and which are agreed between the manager of a qualifying social entrepreneurship fund and the investors therein;

(g) ‘equity’ means ownership interest in an undertaking, represented by the shares or other forms of participation in the capital of the qualifying portfolio undertaking issued to its investors;

(h) ‘quasi-equity’ means any type of financing instrument which is a combination of equity and debt, where the return on the instrument is linked to the profit or loss of the qualifying portfolio undertaking and where the repayment of the instrument in the event of default is not fully secured;

(i) ‘marketing’ means a direct or indirect offering or placement at the initiative of the manager of a qualifying social entrepreneurship fund, or on its behalf, of units or shares of a qualifying social entrepreneurship fund that is managed by that manager to or with investors domiciled or with a registered office in the [F24 United Kingdom];

(j) ‘committed capital’ means any commitment pursuant to which an investor is obliged, within the time frame laid down in the rules or instruments of incorporation of the qualifying social entrepreneurship fund, to acquire an interest in, or to make capital contributions to, that fund;

F25 (k) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F26 (l) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F27 (m) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F28 (n) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F29 (o) ‘the FCA’ means the Financial Conduct Authority;

(p) ‘FSMA’ means the Financial Services and Markets Act 2000;

(q) ‘the AIFM Regulations’ means the Alternative Investment Fund Managers Regulations 2013;

(r) ‘the Markets in Financial Instruments Regulation 2014’ means Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012 as that Regulation forms part of domestic law and has effect from time to time.

Any reference in this Regulation to a sourcebook is to a sourcebook in the Handbook of Rules and Guidance published by the FCA containing rules made and guidance issued by the FCA under FSMA as the sourcebook has effect on IP completion day.]

With regard to point (c) of the first subparagraph, where the legal form of a qualifying social entrepreneurship fund permits internal management and where the governing body of the fund does not appoint an external manager, the qualifying social entrepreneurship fund itself shall be registered as the manager of a qualifying social entrepreneurship fund in accordance with Article 15. A qualifying social entrepreneurship fund that is registered as an internal manager of a social entrepreneurship fund shall not be registered as an external manager of a qualifying social entrepreneurship fund of other collective investment undertakings.

2. The [F30 Treasury may by regulations specify] the types of services or goods and the methods of production of services or goods that embody a social objective referred to in point (ii) of point (d) of paragraph 1 of this Article taking into account the different kinds of qualifying portfolio undertakings and those circumstances in which profits can be distributed to owners and investors.

Textual Amendments

F8 Substituted by Regulation (EU) 2017/1991 of the European Parliament and of the Council of 25 October 2017 amending Regulation (EU) No 345/2013 on European venture capital funds and Regulation (EU) No 346/2013 on European social entrepreneurship funds (Text with EEA relevance).

F16 Words in Art. 3(1)(a) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 3(3)(a)(i) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F17 Words in Art. 3(1)(b) inserted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 3(3)(a)(ii)(aa) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F18 Words in Art. 3(1)(b)(iii) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 3(3)(a)(ii)(bb) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F19 Words in Art. 3(1)(d)(i) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 3(3)(a)(iii)(aa) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F20 Words in Art. 3(1)(d)(v) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 3(3)(a)(iii)(bb) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F21 Words in Art. 3(1)(d)(v) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 3(3)(a)(iii)(cc) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F22 Words in Art. 3(1)(e)(iii) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 3(3)(a)(iv)(aa) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F23 Art. 3(1)(e)(vi) inserted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 3(3)(a)(iv)(bb) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F24 Words in Art. 3(1)(i) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 3(3)(a)(v) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F25 Art. 3(1)(k) omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 3(3)(a)(vi) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F26 Art. 3(1)(l) omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 3(3)(a)(vi) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F27 Art. 3(1)(m) omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 3(3)(a)(vi) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F28 Art. 3(1)(n) omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 3(3)(a)(vi) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F29 Art. 3(1)(o)-(r) and words inserted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 3(3)(a)(vii) (with savings in S.I. 2019/680, reg. 11) (as amended by The Financial Services and Economic and Monetary Policy (Consequential Amendments) (EU Exit) Regulations 2020 (revoked) 2020 (S.I. 2020/1301), regs. 1, 3, Sch. para. 24(a)); 2020 c. 1, Sch. 5 para. 1(1)

F30 Words in Art. 3(2) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 3(3)(b) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

CHAPTER II U.K. CONDITIONS FOR THE USE OF THE DESIGNATION ‘EuSEF’

Article 4 U.K.

Managers of qualifying social entrepreneurship funds that comply with the requirements set out in this Chapter shall be entitled to use the designation ‘[F31 SEF]’ in relation to the marketing of qualifying social entrepreneurship funds [F32 in the United Kingdom].

Textual Amendments

F31 Word in Art. 4 substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 4(1)(a) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F32 Words in Art. 4 substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 4(1)(b) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

Article 5 U.K.

1. Managers of qualifying social entrepreneurship funds shall ensure that, when acquiring assets other than qualifying investments, no more than 30 % of the qualifying social entrepreneurship fund’s aggregate capital contributions and uncalled committed capital is used for the acquisition of such assets. The 30 % threshold shall be calculated on the basis of amounts investible after the deduction of all relevant costs. Holdings in cash and cash equivalents shall not be taken into account for calculating that threshold as cash and cash equivalents are not to be considered as investments.

2. Managers of qualifying social entrepreneurship funds shall not employ at the level of the qualifying social entrepreneurship fund any method by which the exposure of the fund will be increased beyond the level of its committed capital, whether through borrowing of cash or securities, engaging in derivative positions or by any other means.

3. Managers of qualifying social entrepreneurship funds may only borrow, issue debt obligations or provide guarantees, at the level of the qualifying social entrepreneurship fund where such borrowings, debt obligations or guarantees are covered by uncalled commitments.

Article 6 U.K.

1. Managers of qualifying social entrepreneurship fund shall market the units and shares of the qualifying social entrepreneurship fund exclusively to investors which are considered to be professional clients in accordance with [F33 Part 2 of Schedule 1 to the Markets in Financial Instruments Regulation 2014], or which may, on request, be treated as professional clients in accordance with [F34 Part 3 of Schedule 1 to the Markets in Financial Instruments Regulation 2014], or to other investors that:

(a) commit to invest a minimum of EUR 100 000; and

(b) state in writing, in a separate document from the contract that is concluded for the commitment to invest, that they are aware of the risks associated with the envisaged commitment.

2. Paragraph 1 shall not apply to investments made by executives, directors or employees involved in the management of a manager of a qualifying social entrepreneurship fund when investing in the qualifying social entrepreneurship funds that they manage.

Textual Amendments

F33 Words in Art. 6(1) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 4(2)(a) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F34 Words in Art. 6(1) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 4(2)(b) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

Article 7 U.K.

Managers of qualifying social entrepreneurship funds shall, in relation to the qualifying social entrepreneurship funds they manage:

(a)

act honestly, fairly and with due skill, care and diligence in conducting their activities;

(b)

apply appropriate policies and procedures for preventing malpractices that can reasonably be expected to affect the interests of the investors and the qualifying portfolio undertakings;

(c)

conduct their business activities in such a way as to promote the positive social impact of the qualifying portfolio undertakings in which they have invested, the best interests of the qualifying social entrepreneurship funds that they manage, the investors therein and the integrity of the market;

(d)

apply a high level of diligence in the selection and ongoing monitoring of investments in qualifying portfolio undertakings and the positive social impact of those undertakings;

(e)

possess adequate knowledge and understanding of the qualifying portfolio undertakings in which they invest;

(f)

treat their investors fairly;

(g)

ensure that no investor obtains preferential treatment, unless such preferential treatment is disclosed in the rules or instruments of incorporation of the qualifying social entrepreneurship fund.

Article 8 U.K.

1. Where a manager of a qualifying social entrepreneurship fund delegates functions to third parties, the manager’s liability towards the qualifying social entrepreneurship fund or the investors therein shall remain unaffected. The manager shall not delegate functions to the extent that, in essence, it can no longer be considered to be the manager of the qualifying social entrepreneurship fund and to the extent that it becomes a letter-box entity.

2. Any delegation of functions under paragraph 1 shall not undermine the effectiveness of supervision of the manager of a qualifying social entrepreneurship fund, and, in particular, shall not prevent that manager from acting, or the qualifying social entrepreneurship fund from being managed, in the best interests of the investors therein.

Article 9 U.K.

1. Managers of qualifying social entrepreneurship funds shall identify and avoid conflicts of interest and, where they cannot be avoided, manage and monitor and, in accordance with paragraph 4, disclose those conflicts of interest promptly in order to prevent them from adversely affecting the interests of the qualifying social entrepreneurship funds and the investors therein and to ensure that the qualifying social entrepreneurship funds that they manage are fairly treated.

2. Managers of qualifying social entrepreneurship funds shall identify in particular those conflicts of interest that may arise between:

(a) managers of qualifying social entrepreneurship funds, persons who effectively conduct the business of those managers, employees of, or any person who directly or indirectly controls or is controlled by, those managers, and the qualifying social entrepreneurship fund managed by those managers, or the investors therein;

(b) a qualifying social entrepreneurship fund or the investors therein, and another qualifying social entrepreneurship fund managed by the same manager, or the investors therein;

(c) the qualifying social entrepreneurship fund or the investors therein, and a collective investment undertaking or UCITS managed by the same manager, or the investors therein.

3. Managers of qualifying social entrepreneurship funds shall maintain and operate effective organisational and administrative arrangements in order to comply with the requirements laid down in paragraphs 1 and 2.

4. Disclosures of conflicts of interest as referred to in paragraph 1 shall be provided, where organisational arrangements made by a manager of a qualifying social entrepreneurship fund to identify, prevent, manage and monitor conflicts of interest are not sufficient to ensure, with reasonable confidence, that risks of damage to investors’ interests will be prevented. A manager of a qualifying social entrepreneurship fund shall disclose in clear terms the general nature or sources of conflicts of interest to the investors before undertaking business on their behalf.

5. The [F35 Treasury may by regulations specify]:

(a) the types of conflicts of interest referred to in paragraph 2 of this Article;

(b) the steps that managers of a qualifying social entrepreneurship fund must take, in terms of structures and organisational and administrative procedures, in order to identify, prevent, manage, monitor and disclose conflicts of interest.

Textual Amendments

F35 Words in Art. 9(5) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 4(3) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

Article 10 U.K.

1. Managers of a qualifying social entrepreneurship fund shall employ for each qualifying social entrepreneurship fund that they manage, procedures to measure the extent to which the qualifying portfolio undertakings, in which the qualifying social entrepreneurship fund invests, achieve the positive social impact to which they are committed. The managers shall ensure that these procedures are clear and transparent and include indicators that may, depending on the social objective and nature of the qualifying portfolio undertaking, include one or more of the following subjects:

(a) employment and labour markets;

(b) standards and rights related to job quality;

(c) social inclusion and protection of particular groups;

(d) equal treatment, equal opportunities and non-discrimination;

(e) public health and safety;

(f) access to and effects on social protection and on health and educational systems.

2. The [F36 Treasury may by regulations specify] the details of the procedures referred to in paragraph 1 of this Article, in relation to different qualifying portfolio undertakings.

Textual Amendments

F36 Words in Art. 10(2) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 4(4) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

Article 11 U.K.

1. At all times, managers of qualifying social entrepreneurship funds shall have sufficient own funds and use adequate and appropriate human and technical resources as necessary for the proper management of the qualifying social entrepreneurship fund that they manage.

[F8 2. Both internally managed qualifying social entrepreneurship funds and external managers of qualifying social entrepreneurship funds shall have an initial capital of EUR 50 000.]

[F37 3. Own funds shall at all times amount to at least one eighth of the fixed overheads incurred by the manager in the preceding year. The [F38 FCA] may adjust that requirement in the event of a material change to the manager’s business since the preceding year. Where the manager of a qualifying social entrepreneurship fund has not completed a year of business, the requirement shall amount to one eighth of the fixed overheads expected in its business plan, unless [F38 FCA] requires an adjustment to that plan.

4. Where the value of the qualifying social entrepreneurship funds managed by the manager exceeds EUR 250 000 000, the manager shall provide an additional amount of own funds. That additional amount shall be equal to 0,02 % of the amount by which the total value of the qualifying social entrepreneurship funds exceeds EUR 250 000 000.

5. The [F39 FCA] may authorise the manager of qualifying social entrepreneurship fund not to provide up to 50 % of the additional amount of own funds referred to in paragraph 4 if that manager benefits from a guarantee for the same amount given by a credit institution or an insurance undertaking which has its registered office in [F40 the United Kingdom], or in a third country where it is subject to prudential rules which [F39 FCA] considers to be equivalent to those laid down in [F41 the law of the United Kingdom].

6. Own funds shall be invested in liquid assets or assets readily convertible to cash in the short term and shall not include speculative positions.]

Textual Amendments

F8 Substituted by Regulation (EU) 2017/1991 of the European Parliament and of the Council of 25 October 2017 amending Regulation (EU) No 345/2013 on European venture capital funds and Regulation (EU) No 346/2013 on European social entrepreneurship funds (Text with EEA relevance).

F37 Inserted by Regulation (EU) 2017/1991 of the European Parliament and of the Council of 25 October 2017 amending Regulation (EU) No 345/2013 on European venture capital funds and Regulation (EU) No 346/2013 on European social entrepreneurship funds (Text with EEA relevance).

F38 Word in Art. 11(3) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 4(5)(a) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F39 Word in Art. 11(5) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 4(5)(a) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F40 Words in Art. 11(5) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 4(5)(b)(i) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F41 Words in Art. 11(5) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 4(5)(b)(ii) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

Article 12 U.K.

1. Rules for the valuation of assets shall be laid down in the rules or instruments of incorporation of the qualifying social entrepreneurship fund and shall ensure a sound and transparent valuation process.

2. The valuation procedures used shall ensure that the assets are valued properly and that the asset value is calculated at least annually.

F42 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F42 Art. 12(3) omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 4(6) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

Article 13 U.K.

1. Managers of qualifying social entrepreneurship funds shall make available an annual report to the [F43 FCA] for each qualifying social entrepreneurship fund that they manage, by six months following the end of the financial year. The report shall describe the composition of the portfolio of the qualifying social entrepreneurship fund and the activities of the previous year. It shall also disclose the profits earned by the qualifying social entrepreneurship fund at the end of its life and, where applicable, the profits distributed during its life. It shall contain the audited financial accounts for the qualifying social entrepreneurship fund. The annual report shall be produced in accordance with existing reporting standards and the terms agreed between the managers of qualifying social entrepreneurship funds and the investors. Managers of qualifying social entrepreneurship funds shall provide the report to investors on request. Managers of qualifying social entrepreneurship funds and investors may agree additional disclosures to each other.

2. The annual report shall at least include the following:

(a) details, as appropriate, of the overall social outcomes achieved by the investment policy and the method used to measure those outcomes;

(b) a statement of any divestments in relation to qualifying portfolio undertakings that have occurred;

(c) a description of whether divestments in relation to the other assets of the qualifying social entrepreneurship fund which are not invested into qualifying portfolio undertakings occurred on the basis of the criteria as referred to in point (f) of Article 14(1);

(d) a summary of the activities that the manager of a qualifying social entrepreneurship fund has undertaken in relation to the qualifying portfolio undertakings as referred to in point (l) of Article 14(1);

[F8 (e) information on the nature, value and purpose of the investments other than qualifying investments referred to in Article 5(1);]

[F37 (f) a description of how environmental and climate-related risks are taken into account in the investment approach of the qualifying social entrepreneurship funds.]

3. An audit of the qualifying social entrepreneurship fund shall be conducted at least annually. The audit shall confirm that money and assets are held in the name of the qualifying social entrepreneurship fund and that the manager of a qualifying social entrepreneurship fund has established and maintained adequate records and checks in respect of the use of any mandate or control over the money and assets of the qualifying social entrepreneurship fund and the investors therein.

4. Where the manager of a qualifying social entrepreneurship fund is required to make public an annual financial report in accordance with [F44 rule 4.1.3 of the Disclosure Guidance and Transparency Rules sourcebook] in relation to the qualifying social entrepreneurship fund the information referred to in paragraphs 1 and 2 of this Article may be provided separately or as an additional part of the annual financial report.

F45 5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F8 Substituted by Regulation (EU) 2017/1991 of the European Parliament and of the Council of 25 October 2017 amending Regulation (EU) No 345/2013 on European venture capital funds and Regulation (EU) No 346/2013 on European social entrepreneurship funds (Text with EEA relevance).

F37 Inserted by Regulation (EU) 2017/1991 of the European Parliament and of the Council of 25 October 2017 amending Regulation (EU) No 345/2013 on European venture capital funds and Regulation (EU) No 346/2013 on European social entrepreneurship funds (Text with EEA relevance).

F43 Word in Art. 13(1) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 4(7)(a) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F44 Words in Art. 13(4) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 4(7)(b) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F45 Art. 13(5) omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 4(7)(c) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

Article 14 U.K.

1. Managers of qualifying social entrepreneurship funds shall, in relation to the qualifying social entrepreneurship funds that they manage, inform their investors, prior to the investment decision of the latter, in a clear and understandable manner, of the following:

(a) the identity of that manager and of any other service providers contracted by that manager in relation to their management, and a description of their duties;

[F8 (b) the amount of own funds available to that manager for maintaining the adequate human and technical resources necessary for the proper management of its qualifying social entrepreneurship funds;]

(c) a description of the investment strategy and objectives of the qualifying social entrepreneurship fund, including:

(i)

the types of qualifying portfolio undertakings in which it intends to invest;

(ii)

any other qualifying social entrepreneurship fund in which it intends to invest;

(iii)

the types of qualifying portfolio undertakings in which any other qualifying social entrepreneurship fund, as referred to in point (ii), intends to invest;

(iv)

the non-qualifying investments which it intends to make;

(v)

the techniques that it intends to employ; and

(vi)

any applicable investment restrictions;

(d) the positive social impact being targeted by the investment policy of the qualifying social entrepreneurship fund, including, where relevant, projections of such outcomes as may be reasonable, and information on past performance in this area;

(e) the methodologies to be used to measure social impacts;

(f) a description of the assets other than qualifying portfolio undertakings and the process and the criteria which are used for selecting these assets unless they are cash or cash equivalents;

(g) a description of the risk profile of the qualifying social entrepreneurship fund and any risks associated with the assets in which the fund may invest or the investment techniques that may be employed;

(h) a description of the qualifying social entrepreneurship fund’s valuation procedure and of the pricing methodology for valuing assets, including the methods used for valuing qualifying portfolio undertakings;

(i) a description of how the remuneration of the manager of a qualifying social entrepreneurship fund is calculated;

(j) a description of all relevant costs and of the maximum amounts thereof;

(k) where available, the historical financial performance of the qualifying social entrepreneurship fund;

(l) the business support services and the other support activities the manager of a qualifying social entrepreneurship fund is providing or arranging through third parties in order to facilitate the development, growth or in some other respect the ongoing operations of the qualifying portfolio undertakings in which the qualifying social entrepreneurship fund invests, or, where these services or activities are not provided, an explanation of that fact;

(m) a description of the procedures by which the qualifying social entrepreneurship fund may change its investment strategy or investment policy, or both.

2. All of the information referred to in paragraph 1 shall be fair, clear and not misleading. It shall be kept up-to-date and reviewed regularly where relevant.

3. Where the manager of a qualifying social entrepreneurship fund is required to publish a prospectus in accordance with [F46 Part 6 of FSMA] or in accordance with national law in relation to the qualifying social entrepreneurship fund, the information referred to in paragraph 1 of this Article may be provided separately or as a part of the prospectus.

4. The [F47 Treasury may by regulations specify]:

(a) the content of the information referred to in points (c) to (f) and (l) of paragraph 1 of this Article;

(b) how the information as referred to in points (c) to (f) and (l) of paragraph 1 of this Article can be presented in a uniform way in order to ensure the highest possible level of comparability.

Textual Amendments

F8 Substituted by Regulation (EU) 2017/1991 of the European Parliament and of the Council of 25 October 2017 amending Regulation (EU) No 345/2013 on European venture capital funds and Regulation (EU) No 346/2013 on European social entrepreneurship funds (Text with EEA relevance).

F46 Words in Art. 14(3) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 4(8)(a) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F47 Words in Art. 14(4) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 4(8)(b) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

CHAPTER III U.K. SUPERVISION AND ADMINISTRATIVE COOPERATION

Article 15 U.K.

1. Managers of qualifying social entrepreneurship funds that intend to use of the designation ‘[F48 SEF]’ for the marketing of their qualifying social entrepreneurship funds shall inform the [F49 FCA] 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;

F50 (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F51 (e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2. The [F52 FCA] 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[F8 .]

F51 (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3. Registration under this Article shall be valid in the [F53 United Kingdom] and shall allow managers of qualifying social entrepreneurship funds to market qualifying social entrepreneurship funds under the designation ‘[F54 SEF]’ [F55 in the United Kingdom].

[F37 4. The [F56 FCA] shall inform the manager as referred to in paragraph 1 whether it has been registered as a manager of a qualifying social entrepreneurship fund no later than two months after it has provided all the information referred to in that paragraph.

F57 5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6. A manager of a qualifying social entrepreneurship fund as referred to in this Article shall notify the [F58 FCA] of any material changes to the conditions for its initial registration in accordance with this Article before such changes are implemented.

If the [F58 FCA] decides to impose restrictions or reject the changes referred to in the first subparagraph, it shall inform the manager of the qualifying social entrepreneurship fund within one month of receipt of notification of those changes. The [F59 FCA] may extend that period by up to one month where it considers this to be necessary due to the specific circumstances of the case, after having notified the manager of the qualifying social entrepreneurship fund. The changes may be implemented if the [F60 FCA ] does not oppose the changes within the relevant assessment period.

[F61 7. The FCA may make technical standards to specify further the information to be provided to it in the application for registration as set out in paragraph 1 and to specify further the conditions as set out in paragraph 2.

8. The FCA may make technical standards on standard forms, templates and procedures for the provision of information to it in the application for registration set out in paragraph 1 and the conditions set out in paragraph 2.]

F62 9. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F8 Substituted by Regulation (EU) 2017/1991 of the European Parliament and of the Council of 25 October 2017 amending Regulation (EU) No 345/2013 on European venture capital funds and Regulation (EU) No 346/2013 on European social entrepreneurship funds (Text with EEA relevance).

F37 Inserted by Regulation (EU) 2017/1991 of the European Parliament and of the Council of 25 October 2017 amending Regulation (EU) No 345/2013 on European venture capital funds and Regulation (EU) No 346/2013 on European social entrepreneurship funds (Text with EEA relevance).

F48 Word in Art. 15(1) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(1)(a)(i) (with regs. 7, 8) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 24(c)-(e) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F49 Word in Art. 15(1) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(1)(a)(ii) (with regs. 7, 8) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 24(c)-(e) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F50 Art. 15(1)(d) omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(1)(a)(iii) (with regs. 7, 8) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 24(c)-(e) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F51 Deleted by Regulation (EU) 2017/1991 of the European Parliament and of the Council of 25 October 2017 amending Regulation (EU) No 345/2013 on European venture capital funds and Regulation (EU) No 346/2013 on European social entrepreneurship funds (Text with EEA relevance).

F52 Word in Art. 15(2) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(1)(b) (with regs. 7, 8) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 24(c)-(e) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F53 Words in Art. 15(3) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(1)(c)(i) (with regs. 7, 8) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 24(c)-(e) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F54 Word in Art. 15(3) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(1)(c)(ii) (with regs. 7, 8) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 24(c)-(e) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F55 Words in Art. 15(3) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(1)(c)(iii) (with regs. 7, 8) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 24(c)-(e) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F56 Word in Art. 15(4) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(1)(b) (with regs. 7, 8) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 24(c)-(e) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F57 Art. 15(5) omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(1)(d) (with regs. 7, 8) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 24(c)-(e) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F58 Word in Art. 15(6) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(1)(b) (with regs. 7, 8) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 24(c)-(e) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F59 Word in Art. 15(6) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(1)(e)(i) (with regs. 7, 8) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 24(c)-(e) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F60 Word in Art. 15(6) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(1)(e)(ii) (with regs. 7, 8) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 24(c)-(e) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F61 Art. 15(7)(8) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(1)(f) (with regs. 7, 8) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 24(c)-(e) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F62 Art. 15(9) omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(1)(g) (with regs. 7, 8) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 24(c)-(e) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

[F37 Article 15a U.K.

1. Managers of collective investment undertakings [F63 who have permission under Part 4A of the FSMA to carry on the regulated activity specified by article 51ZC of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 (managing an AIF)] shall apply for registration of the qualifying social entrepreneurship funds for which they intend to use the designation ‘[F64 SEF]’.

2. The application for registration referred to in paragraph 1 shall be made to the [F65 FCA] and shall include the following:

(a) the rules or instruments of incorporation of the qualifying social entrepreneurship fund;

(b) information on the identity of the depositary;

(c) the information referred to in Article 15(1);

F66 (d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

For the purposes of point (c) of the first subparagraph, the information on the arrangements made for complying with the requirements of Chapter II shall refer to the arrangements made for complying with Articles 5, 6 and 10, Article 13(2) and points (d), (e) and (f) of Article 14(1).

F67 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4. Managers as referred to in paragraph 1 shall not be required to provide information or documents which they have already provided under [F68 the law of the United Kingdom or any part of the United Kingdom which was relied on immediately before IP completion day to implement Directive 2011/61/EU and its implementing measures—

(i) as they have effect on IP completion day, in the case of rules made by the FCA or by the PRA under FSMA, and

(ii) as amended from time to time, in all other cases.]

5. Having assessed the documentation received in accordance with paragraph 2 F69 ..., the [F70 FCA] shall register a fund as a qualifying social entrepreneurship fund if the manager of that fund meets the conditions laid down in Article 15(2).

6. The [F71 FCA] shall inform the manager as referred to in paragraph 1 whether that fund has been registered as a qualifying social entrepreneurship fund no later than two months after that manager has provided all the documentation referred to in paragraph 2.

7. Registration under this Article shall be valid in the [F72 United Kingdom] and shall allow the marketing of those funds [F73 in the United Kingdom] under the designation ‘[F74 SEF]’.

[F75 8. The FCA may make technical standards to specify further the information to be provided to it in accordance with paragraph 2.

9. The FCA may make technical standards on standard forms, templates and procedures for the provision of information to it in accordance with paragraph 2.]

F76 10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F37 Inserted by Regulation (EU) 2017/1991 of the European Parliament and of the Council of 25 October 2017 amending Regulation (EU) No 345/2013 on European venture capital funds and Regulation (EU) No 346/2013 on European social entrepreneurship funds (Text with EEA relevance).

F63 Words in Art. 15a(1) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(2)(a)(i) (with reg. 9) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 24(c)-(e) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F64 Word in Art. 15a(1) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(2)(a)(ii) (with reg. 9) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 24(c)-(e) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F65 Word in Art. 15a(2) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(2)(b)(i) (with reg. 9) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 24(c)-(e) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F66 Art. 15a(2)(d) omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(2)(b)(ii) (with reg. 9) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 24(c)-(e) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F67 Art. 15a(3) omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(2)(c) (with reg. 9) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 24(c)-(e) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F68 Words in Art. 15a(4) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(2)(d) (with reg. 9) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 24(b)-(e) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F69 Words in Art. 15a(5) omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(2)(e)(i) (with reg. 9) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 24(c)-(e) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F70 Word in Art. 15a(5) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(2)(e)(ii) (with reg. 9) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 24(c)-(e) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F71 Word in Art. 15a(6) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(2)(f) (with reg. 9) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 24(c)-(e) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F72 Words in Art. 15a(7) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(2)(g)(i) (with reg. 9) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 24(c)-(e) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F73 Words in Art. 15a(7) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(2)(g)(ii) (with reg. 9) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 24(c)-(e) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F74 Word in Art. 15a(7) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(2)(g)(iii) (with reg. 9) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 24(c)-(e) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F75 Art. 15a(8)(9) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(2)(h) (with reg. 9) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 24(c)-(e) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F76 Art. 15a(10) omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(2)(i) (with reg. 9) (as amended by S.I. 2020/1301, regs. 1, 3, Sch. para. 24(c)-(e) and with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F77 Article 15b U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F77 Arts. 15b-17a omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(3) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F77 Article 16 U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F77 Arts. 15b-17a omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(3) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F77 Article 17 U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F77 Arts. 15b-17a omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(3) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F77 Article 17a U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F77 Arts. 15b-17a omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(3) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

[F8 Article 18 U.K.

1. [F78 The FCA] shall maintain a central database that is publicly accessible on the internet and that lists all managers of qualifying social entrepreneurship funds using the designation ‘[F79 SEF]’ and the qualifying social entrepreneurship funds for which they use that designation F80 ....

2. On its website, [F81 the FCA] shall provide weblinks to the relevant information regarding third countries that fulfil the applicable requirement under point (d)(v) of the first subparagraph of Article 3(1).]

Textual Amendments

F8 Substituted by Regulation (EU) 2017/1991 of the European Parliament and of the Council of 25 October 2017 amending Regulation (EU) No 345/2013 on European venture capital funds and Regulation (EU) No 346/2013 on European social entrepreneurship funds (Text with EEA relevance).

F78 Words in Art. 18(1) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(4)(a)(i) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F79 Word in Art. 18(1) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(4)(a)(ii) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F80 Words in Art. 18(1) omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(4)(a)(iii) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F81 Words in Art. 18(2) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(4)(b) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

Article 19 U.K.

1. The [F82 FCA] shall supervise compliance with the requirements laid down in this Regulation.

F83 1a. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F83 1b. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F83 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F83 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F82 Word in Art. 19(1) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(5)(a) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F83 Art. 19(1a)-(3) omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(5)(b) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F84 Article 20 U.K.

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Textual Amendments

F84 Art. 20 omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(6) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F85 Article 21 U.K.

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Textual Amendments

F85 Art. 21 omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(6) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

Article 22 U.K.

[F8 1. While respecting the principle of proportionality, the [F86 FCA] shall take the appropriate measures referred to in paragraph 2, as applicable, where the manager of the 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;

[F8 (c) uses the designation ‘[F87 SEF]’ but is not registered in accordance with Article 15, or the qualifying social entrepreneurship fund is not registered in accordance with Article 15a;]

(d) uses the designation ‘[F88 SEF]’ for the marketing of funds which are not established in accordance with point (b)(iii) of Article 3(1);

[F8 (e) has obtained registration through false statements or any other irregular means, in breach of Article 15 or Article 15a;]

(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.

[F8 2. In the cases referred to in paragraph 1, the [F89 FCA] 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 to 15a, as applicable;

(b) prohibit the manager of the qualifying social entrepreneurship fund concerned from using the designation ‘[F90 SEF]’ and remove that manager, or the qualifying social entrepreneurship fund concerned, from the register.

F91 3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4. The right to market one or more qualifying social entrepreneurship funds under the designation ‘[F92 SEF]’ in the [F93 United Kingdom] shall expire with immediate effect from the date of the decision of the [F94 FCA] referred to in point (b) of paragraph 2.]

F95 5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F8 Substituted by Regulation (EU) 2017/1991 of the European Parliament and of the Council of 25 October 2017 amending Regulation (EU) No 345/2013 on European venture capital funds and Regulation (EU) No 346/2013 on European social entrepreneurship funds (Text with EEA relevance).

F86 Word in Art. 22(1) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(7)(b) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F87 Word in Art. 22(1)(c) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(7)(a) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F88 Word in Art. 22(1)(d) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(7)(a) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F89 Word in Art. 22(2) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(7)(b) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F90 Word in Art. 22(2)(b) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(7)(a) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F91 Art. 22(3) omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(7)(c) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F92 Word in Art. 22(4) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(7)(a) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F93 Words in Art. 22(4) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(7)(d)(i) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F94 Word in Art. 22(4) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(7)(d)(ii) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F95 Art. 22(5) omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(7)(e) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

[F37 Article 22a U.K.

The powers conferred on [F96 the FCA in respect of AIFMs (as defined in regulation 4(1) of the AIFM Regulations) under FSMA or the AIFM Regulations], including those related to penalties, shall also be exercised with respect to the managers referred to in Article 2(2) of this Regulation.]

Textual Amendments

F37 Inserted by Regulation (EU) 2017/1991 of the European Parliament and of the Council of 25 October 2017 amending Regulation (EU) No 345/2013 on European venture capital funds and Regulation (EU) No 346/2013 on European social entrepreneurship funds (Text with EEA relevance).

F96 Words in Art. 22a substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(8) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F97 Article 23 U.K.

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Textual Amendments

F97 Art. 23 omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(9) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

Article 24 U.K.

1. All persons who work or who have worked for the [F98 FCA], as well as auditors and experts instructed by the [F98 FCA], 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.

F99 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F100 3. Where the FCA receives confidential information under this Regulation, the FCA may use it only in the course of its duties and for the purpose of administrative and judicial proceedings.]

Textual Amendments

F98 Word in Art. 24(1) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(10)(a) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F99 Art. 24(2) omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(10)(b) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F100 Art. 24(3) substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(10)(c) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F101 Article 25 U.K.

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Textual Amendments

F101 Art. 25 omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 5(11) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

CHAPTER IV U.K. TRANSITIONAL AND FINAL PROVISIONS

[F102 Article 26 U.K.

1.  Any power to make regulations conferred on the Treasury by this Regulation is exercisable by statutory instrument.

2. Such regulations may—

(a) contain incidental, supplemental, consequential and transitional provision; and

(b) may make different provision for different purposes.

3. A statutory instrument containing regulations made under this Regulation is subject to annulment in pursuance of a resolution of either House of Parliament.]

Textual Amendments

F102 Art. 26 substituted (31.12.2020) by The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 6(1) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F103 Article 27 U.K.

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Textual Amendments

F103 Art. 27 omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 6(2) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

F104 Article 28 U.K.

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Textual Amendments

F104 Art. 28 omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 6(2) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

Article 29 U.K.

This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

It shall apply from the 22 July 2013, except for Article 3(2), Article 9(5), Article 10(2) and Article 14(4), which shall apply from 15 May 2013.

F105 ...

Textual Amendments

F105 Words in Signature omitted (31.12.2020) by virtue of The Social Entrepreneurship Funds (Amendment) (EU Exit) Regulations 2019 (S.I. 2019/343), regs. 1(1), 6(3) (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)

(1)

OJ C 175, 19.6.2012, p. 11.

(2)

OJ C 229, 31.7.2012, p. 55.

(3)

Position of the European Parliament of 12 March 2013 (not yet published in the Official Journal) and decision of the Council of 21 March 2013.

(4)

OJ L 302, 17.11.2009, p. 32.

(5)

OJ L 174, 1.7.2011, p. 1.

(6)

OJ L 145, 30.4.2004, p. 1.

(7)

OJ L 331, 15.12.2010, p. 84.

(8)

OJ L 281, 23.11.1995, p. 31.

(9)

OJ L 8, 12.1.2001, p. 1.