This document is an excerpt from the EUR-Lex website
Document 52012XX1101(07)
Executive summary of the EDPS Opinion of 14 June 2012 on the proposals for a regulation on European venture capital funds and for a regulation on European social entrepreneurship funds
Executive summary of the EDPS Opinion of 14 June 2012 on the proposals for a regulation on European venture capital funds and for a regulation on European social entrepreneurship funds
Executive summary of the EDPS Opinion of 14 June 2012 on the proposals for a regulation on European venture capital funds and for a regulation on European social entrepreneurship funds
OJ C 335, 1.11.2012, p. 16–17
(BG, ES, CS, DA, DE, ET, EL, EN, FR, IT, LV, LT, HU, MT, NL, PL, PT, RO, SK, SL, FI, SV)
1.11.2012 |
EN |
Official Journal of the European Union |
C 335/16 |
Executive summary of the EDPS Opinion of 14 June 2012 on the proposals for a regulation on European venture capital funds and for a regulation on European social entrepreneurship funds
(The full text of this Opinion can be found in English, French and German on the EDPS website: http://www.edps.europa.eu)
2012/C 335/09
Introduction
Consultation of the EDPS
1. |
On 7 December 2011, the Commission adopted a proposal for a regulation on European venture capital funds (1) (hereinafter ‘the proposed VCF regulation’). On the same date, the Commission adopted a proposal for a regulation on social entrepreneurship funds (2) (hereinafter ‘the proposed SEF regulation’). These proposals were sent to the EDPS for consultation on 12 December 2011. |
2. |
The EDPS welcomes the fact that he is consulted by the Commission and recommends that references to this Opinion are included in the preambles of the proposed regulations. |
3. |
The implementation and application of the legal framework for venture capital funds and social entrepreneurship funds may in certain cases affect the rights of individuals relating to the processing of their personal data. The proposed regulations contain provisions which may have data protection implications for the individuals concerned, such as the applicability of data protection legislation, cross border exchanges of information, investigatory powers of the competent authorities and databases of fund managers. |
4. |
There are comparable provisions to the ones referred to in this Opinion in several pending and possible future proposals, such as those discussed in the EDPS Opinions on the legislative package on the revision of the banking legislation, credit rating agencies, markets in financial instruments (MIFID/MIFIR) and market abuse (3). Therefore, the EDPS recommends reading this Opinion in close conjunction with his Opinions of 10 February 2012 on the abovementioned initiatives. |
Objectives and scope of the proposal
5. |
The proposed regulations aim to solve different problems with both types of funds. |
6. |
Although venture capital funds focus on providing equity finance for SME's, the European venture capital industry is fragmented and dispersed. This fragmentation and dispersion leads to a statistically significant investor's reluctance to invest in venture capital funds. Regulatory fragmentation also impedes specialised venture capital funds from raising significant amount of capital from abroad. Potential investor's current preference is to prefer private equity over venture capital investments. This is negative for Europe's global competitiveness. The proposed regulation on venture capital funds aims at addressing these problems. |
7. |
The range of eligible financing tools proposed in the regulation on European social entrepreneurship funds goes beyond equity finance. Social undertakings also have recourse to other forms of finance, combining public and private sector financing, debt instruments or small loans. The proposed rules on social entrepreneurship funds therefore provide for a larger range of qualifying investment tools that are available for venture capital funds. |
8. |
In addition, the transparency issues raised by investments into social businesses are distinct from the general reporting obligations that are provided in the area of venture capital: investments into social entrepreneurship target a form of ‘social return’ or positive social impact. The proposed rules contain special sections that focus on information pertaining to social impacts, their measurement and the strategies employed to foster their achievement. |
9. |
The proposed regulations on European venture capital funds and on European social entrepreneurship funds are envisaged to complement each other. Both proposals, if adopted, will coexist as autonomous legal acts in mutual independence. |
Main EDPS comment
10. |
The EDPS considers that — with regard to data protection issues — the proposed regulations are too general. It is unclear in some cases whether processing of personal data will take place under certain provisions of the proposed regulations, for example regarding exchanges of information, investigatory powers of the competent authorities and establishment of ESMA databases. |
Conclusions
32. |
The EDPS recommends:
|
Done at Brussels, 14 June 2012.
Giovanni BUTTARELLI
Assistant European Data Protection Supervisor
(1) COM(2011) 860.
(2) COM(2011) 862.
(3) EDPS Opinions of 10 February 2012, available at: http://www.edps.europa.eu