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Summaries of EU Legislation

Implementing the small and medium-sized enterprises initiative

 

SUMMARY OF:

Implementing Decision 2014/660/EU — model of funding agreement for the contribution of the European Regional Development Fund and the European Agricultural Fund for Rural Development to joint uncapped guarantee and securitisation financial instruments in favour of small and medium-sized enterprises

WHAT IS THE AIM OF THE DECISION?

It aims to ensure:

  • that the EU’s financial instruments which support small and medium sized enterprises (SMEs) can provide a fast response by creating a model of the funding agreement to ensure uniform conditions and equal treatment for, and amongst, participating EU countries using the resources;
  • consistent rules for the contribution of these resources to any individual funding agreement to be entered into by participating EU countries and the European Investment Bank (EIB) or the European Investment Fund (EIF) as well as for those contained in the delegation agreements regarding other sources under the competitiveness of enterprises and small and medium-sized enterprises (COSME) and Horizon 2020 programmes.

KEY POINTS

Scope

The decision sets out the model of the funding agreement for the financial contribution:

Rules

The rules for the model funding agreement are set out in the annex to the decision. They cover a number of elements, including:

  • eligibility and exclusion criteria of the new debt finance*;
  • general principles related to the implementation and management of the two financial instruments;
  • territorial coverage;
  • minimum leverage effects, milestones and penalties;
  • tasks and obligations of the EIF;
  • selection of financial intermediaries and operational agreements;
  • governance;
  • contributions.

FROM WHEN DOES THE DECISION APPLY?

It has applied since 13 September 2014.

BACKGROUND

For more information, see:

KEY TERMS

Joint uncapped guarantee: provides uncapped portfolio guarantees and envisaged partial capital relief to banks building up new portfolios of loans. In return, the originators transfer benefits of the instrument to SMEs in the form of the acceptance of higher-risk clients, reduced collateral requirements, and/or reduced pricing.
Securitisation: backed by a portfolio of existing loans. In return, originators explicitly agree to undertake new EU financing to SMEs in the relevant regions in line with the eligibility criteria that the EU funds contributed in the structure.
New debt finance: new loans, leases or guarantees to final recipients originated by the financial intermediary no later than 31 December 2023 pursuant to the terms and conditions set out in the operational agreements.

MAIN DOCUMENT

Commission Implementing Decision 2014/660/EU of 11 September 2014 on the model of funding agreement for the contribution of the European Regional Development Fund and the European Agricultural Fund for Rural Development to joint uncapped guarantee and securitisation financial instruments in favour of small and medium-sized enterprises (OJ L 271, 12.9.2014, pp. 58-92)

RELATED DOCUMENTS

Regulation (EU) No 1301/2013 of the European Parliament and of the Council of 17 December 2013 on the European Regional Development Fund and on specific provisions concerning the investment for growth and jobs goal and repealing Regulation (EC) No 1080/2006 (OJ L 347, 20.12.2013, pp. 289-302)

Successive amendments to Regulation (EU) No 1301/2013 have been incorporated into the original document. This consolidated version is of documentary value only.

Regulation (EU) No 1291/2013 of the European Parliament and of the Council of 11 December 2013 establishing Horizon 2020 — the framework programme for research and innovation (2014-2020) and repealing Decision No 1982/2006/EC (OJ L 347, 20.12.2013, pp. 104-173)

See consolidated version.

Regulation (EU) No 1287/2013 of the European Parliament and of the Council of 11 December 2013 establishing a programme for the competitiveness of enterprises and small and medium-sized enterprises (COSME) (2014-2020) and repealing Decision No 1639/2006/EC (OJ L 347, 20.12.2013, pp. 33-49)

Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (OJ L 176, 27.6.2013, pp. 338-436)

See consolidated version.

Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ L 176, 27.6.2013, pp. 1-337)

See consolidated version

Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the Council of 25 October 2012 on the financial rules applicable to the general budget of the Union and repealing Council Regulation (EC, Euratom) No 1605/2002 (OJ L 298, 26.10.2012, pp. 1-96)

See consolidated version.

last update 01.02.2019

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