52002DC0563

COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT ON IMPLEMENTATION OF THE RISK CAPITAL ACTION PLAN (RCAP)

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LIST OF ANNEXES

Annex 1. - Historical data for risk capital in the EU

Annex 2 - Historical data for venture capital investment in the US

Annex 3. - Business Angel Networks in Europe

Annex 4. - Implementation of the RCAP (measure by measure)

Annex 5. - Acronyms used in the RCAP

Annex 6 - Glossary of terms used in the RCAP

ANNEX 1

HISTORICAL DATA FOR RISK CAPITAL in the EU

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ANNEX 2

HISTORICAL DATA FOR VENTURE CAPITAL INVESTMENT in the US

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ANNEX 3

BUSINESS ANGEL NETWORKS IN EUROPE

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ANNEX 4

RCAP (RISK CAPITAL ACTION PLAN) APROVED AT THE CARDIFF SUMMIT (JUNE 1998)

LAYOUT BY TYPE OF BARRIER - SITUATION IN OCTOBER 2002

The RCAP comprises six (6) categories of barriers to be removed in the EU:

- MARKET FRAGMENTATION

- INSTITUTIONAL AND REGULATORY

- TAXATION

- PAUCITY OF HIGH-TECH SMALL BUSINESSES

- HUMAN RESOURCES

- CULTURAL

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ANNEX 5

ACRONYMS used in the RCAP

AIM : // Alternative Investment Market (www.londonstockexchange.com/aim)

BEPG // Broad Economic Policy Guidelines

BEST : // Business Environment Simplification Task Force. Established by the Commission in September 1997

BSPCE : // The French "Bons de Souscription des Parts et Créateurs d'Entreprises"

CESR : // Committee of European Securities Regulators

CVC : // Corporate Venture Capital

EASDAQ : // European Association of Securities Dealer Automated Quotation. Renamed "NASDAQ-Europe" (www.nasdaqeurope.com)

EFC : // Community Economic and Finance Committee

EIB : // European Investment Bank (www.eib.org)

EIF : // European Investment Fund (www.eif.org)

EJC : // The European Court of Justice (www.curia.eu.int)

ESC : // European Securities Committee. It replaces the High Level Securities Supervisors Committee

EURO. NM : // Nouveau Marché (Paris) + Neuer Markt (Frankfurt) + Nouveau Marché (Brussels) + Nieuwe Markt (Amsterdam) + Nuovo Mercato (Milan)

EVCA : // European Private Equity and Venture Capital Association (www.evca.com)

FIBV: // Federation Européenne des Bourses de Valeurs/International Federation of Stock Exchanges (www.fibv.com)

FSAP // Financial Services Action Plan

IAS : // International Accounting Standards

ICT: // Information and Communication Technology

ISD : // Investment Services Directive (93/22/EEC)

IT : // Information Technology

MAP // Multi-annual Programme for Enterprise and Entrepreneurship implemented by the Commission

NASDAQ : // The American National Association of Securities Dealers Automated Quotation system (www.nasdaq.com)

R&D // Research and Development

RTD : // Research and Technological Development

SME : // Small and Medium sized Enterprise

TMT // Telecom, media and technology

UCITS : // Undertakings for Collective Investment in Transferable Securities (Investment Funds)

US GAAP : // The American Generally Accepted Accounting Principles

VC // Venture Capital

ANNEX 6

GLOSSARY of terms used in the RCAP

Accounting Directive: // Directives 78/660/EEC and 83/349/EEC.

Business Angels: // Private individuals who invest directly in young new and growing unquoted businesses (seed finance). In may cases they also facilitates the finance of the next stage of the life cycle of young companies (start-up phase). Business angels usually provide finance in return for an equity stake in the business, but may also provide other long-term finance. This capital can complement the venture capital* industry by providing smaller amounts of finance (generally under EUR 150 000) at an earlier stage than most venture capital firms are able to invest.

Capital market: // A market in which long term capital is raised by industry and commerce, the government and local authorities. Stock exchanges are part of the capital market.

Corporate governance: // The manner in which organisations, particularly limited companies, are managed and the nature of accountability of the managers to the owners. This topic has been of increased importance since the beginning of the 1990's, the providers of external finance to a company wanting to ensure management is not acting contrary to their interests.

Corporate venturing: // Corporate venture capital* whereby a larger company takes a direct minority stake in a smaller unquoted company for strategic, financial or social responsibility reason. Predominantly used by large corporates to support external technology development.

Development capital: // Financing provided for the growth and expansion of a company.

Early stage capital: // Financing to companies before they initiate commercial manufacturing and sales, before they be generating a profit. Includes seed* and start-up* financing.

Equity: // The ordinary share capital of a company.

High level Securities Supervisors Committee : // Informal advisory group created in 1985 by the Commission and the EU Securities Supervisory Regulators with the purpose of dealing with co-operation and cross border matters. It has been replaced by the European Securities Committee (ESC*)

Institutional investors: // This term refers mainly to insurance companies, pension funds and investment funds collecting savings and supplying funds to the markets, but also to other types of institutional wealth (e.g. endowment funds, foundations, etc).

Investment Services Directive: // Directive 93/22/EEC (ISD*). It provides a European "passport" for investment firms (brokers, dealers, etc.) and gives the right to electronic exchanges to place their terminals in other Member States.

IPO: // Initial Public Offering (flotation, going public) : the process of launching a public company for the first time by inviting the public to subscribe in its shares.

Management buy-out: // Financing provided to enable current operating management and investors to acquire an existing product line or business. Also known as MBO.

Market capitalisation: // The price of a stock multiplied by the total number of shares outstanding. The market's total valuation of a public company. By extension, the total valuation of companies listed on a stock market.

Primary market: // Market into which a new issue of securities is launched.

Private equity: // As opposed to public equity, equity investment in companies not listed on a stock market. It includes venture capital and buy-out investments.

Prospectus: // A formal written offer to sell securities that sets forth the plan for a proposed business enterprise, or the facts concerning an existing one that an investor needs to make an informed decision.

Prospectus Directive: // Documents drawn up according to the rules of Directives 89/298/EEC (public offers) and/or 80/390/EEC (listing particulars).These Directives will be replaced by a new one under negotiation (proposal adopted by the Commission on 30 May 2001)

Prudent-man regulation: // Obligation of pension managers to invest as a prudent investor would do on his own behalf, in particular by carrying out sensible portfolio diversification, with no limits to portfolio distribution other than on self investment for pension funds financing defined benefit plans. NL, UK, Ireland USA, Canada, Australia have such a legislation.

Regulated markets: // Organised markets where buyers and sellers meet to trade according to agreed rules and procedures. Markets meeting the conditions set under article 1.13 of the ISD.*

Replacement capital: // Purchase of existing shares in a company from another venture capital investment organisation or from another shareholder or shareholders.

Risk capital markets: // Markets providing equity financing to a company during its early growth stages (seed*, start-up* and development*). In the framework of this communication, it covers three sorts of financing:

* Informal investment by Business Angels* and corporates ("Corporate Venturing"*)

* Venture capital.

* Stock markets specialised in SMEs and high growth companies.

Secondary market: // Market where securities are bought and sold subsequent to original issuance. The existence of a flourishing, liquid, secondary market creates the conditions for a healthy primary market.

Security: // A financial asset, including shares, government stocks, debentures, bonds, unit trusts and right to money lent or deposited.

Seed capital: // Financing provided to research, assess and develop an initial concept.

Start-up capital: // Provided to companies for product development and initial marketing.

Stock exchange or Stock Market: // A market in which securities are bought and sold. Its basic function is to enable public companies, governments and local authorities to raise capital by selling securities to investors.

Stock option: // Option given to employees and/or managers to buy shares at a fixed price.

Venture capital: // Investment in unquoted companies by venture capital firms managing in-house or third-party funds. It includes early stage*, expansion* and replacement* finance, but excludes the financing of buy-outs*.

Venture capital funds // Closed-end funds, created to provide venture capital.

(*) Word defined in the glossary or the acronyms