Terms and conditions for off-the-shelf financial instruments

SUMMARY OF:

Implementing Regulation (EU) No 964/2014 — rules for the application of Regulation (EU) No 1303/2013 regarding standard terms and conditions for financial instruments

WHAT IS THE AIM OF THE IMPLEMENTING REGULATION?

It sets out the rules regarding the standard terms and conditions that make so-called off-the-shelf financial instruments ready to use. These instruments already comply with the European Fund for Strategic Investments regulation and State aid policy.

KEY POINTS

Off-the-shelf financial instruments

These financial instruments are:

designed to encourage EU countries to provide revolving financial support* rather than offer traditional grants;
designed to combine public and private resources;
divided into different categories:
- a ‘risksharing loan’ (sharing risks between public and private resources) and a ‘capped guarantee instrument’ (where public money acts as guarantee against default inside a bank’s loan portfolio) both aim to provide small and medium-sized enterprises (SMEs) with better access to finance,
- a ‘renovation loan’ is for energy efficiency and renewable energy projects in the residential building sector,
- a ‘co-investment facility’ will combine public and private resources to provide funding for start-ups and SMEs, and
- an ‘urban development fund’ aims to support sustainable urban projects.

Scope

The regulation sets out rules covering the standard terms and conditions for the following financial instruments:

a portfolio risk-sharing loan
a capped portfolio guarantee
a renovation loan
a co-investment facility
an urban development fund.

Content of a funding agreement

An annotated table of the content of a funding agreement between a managing authority* and a financial intermediary* is set out in the annex to the regulation. The content includes, among others:

scope and objective
policy objective
compliance with State aid rules
target results
role and liability of the financial intermediary
duration and eligibility of expenditure at closure.

FROM WHEN DOES THE IMPLEMENTING REGULATION APPLY?

It has applied since 2 October 2014.

BACKGROUND

For more information, see:

Commission launches two new financial instruments to boost investments in start-ups and sustainable urban development — press release (European Commission).

KEY TERMS

Revolving financial support: ‘revolving financial support’ resources are resources that are returned for future use. The rules for the use of the resources returned are referred to in Articles 44 and 45 of the Common Provisions Regulation (CPR) on the Structural and Cohesion Funds.

Managing authority: a national, regional or local public authority or body, or a private body, designated by the EU country to manage each operational programme. The same managing authority may be designated for more than one operational programme.

Financial intermediary: a body implementing a financial instrument. Such bodies to whom this may be entrusted by the managing authorities are referred to in Article 38(4)(a), (b) and (c) of the CPR.

MAIN DOCUMENT

Commission Implementing Regulation (EU) No 964/2014 of 11 September 2014 laying down rules for the application of Regulation (EU) No 1303/2013 of the European Parliament and of the Council as regards standard terms and conditions for financial instruments (OJ L 271, 12.9.2014, pp. 16-44)

Successive amendments to Regulation (EU) No 964/2014 have been incorporated into the original document. This consolidated version is of documentary value only.