HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN"L 115/18
EN
Official Journal of the European Union
25.4.2013
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
‘Europe 2020: A strategy for delivering smart, sustainable
EUROPEAN UNION,
and inclusive growth’.
Having regard to the Treaty on the Functioning of the European
(2)
This Regulation is part of the Social Business Initiative
Union, and in particular Article 114 thereof,
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’.
Having regard to the proposal from the European Commission,
(3) It
is
necessary
to
lay
down
a
common
framework
of
rules regarding the use of the designation ‘EuSEF’ for
After transmission of the draft legislative act to the national
qualifying social entrepreneurship funds, in particular
parliaments,
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
Having regard to the opinion of the European Central Bank ( 1 ),
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
Having regard to the opinion of the European Economic and
rules in different Member States. Moreover, diverging
Social Committee ( 2 ),
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
Acting in accordance with the ordinary legislative procedure (
with qualifying social entrepreneurship funds. Investors

3 ),
should, furthermore, be able to compare the investment
propositions of different qualifying social entrepre
neurship funds. It is necessary to remove significant
obstacles to cross-border fundraising by qualifying
Whereas:
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
(1)
Increasingly, as investors also pursue social goals and are
Article 114 of the Treaty on the Functioning of the
not only seeking financial returns, a social investment
European Union (TFEU), as interpreted by consistent
market has been emerging in the Union, comprising, in
case law of the Court of Justice of the European Union.
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
(4) It
is
necessary
to
adopt
a
regulation
establishing
uniform
by making a valuable contribution to meeting the
rules applicable to qualifying social entrepreneurship
objectives of the Europe 2020 Strategy set out in the
funds and imposing corresponding obligations on their
Commission Communication of 3 March 2010 entitled
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
( 1 ) OJ C 175, 19.6.2012, p. 11.
that wish to invest in such funds. The regulation should
( 2 ) OJ C 229, 31.7.2012, p. 55.
not apply to existing national schemes that allow
( 3 ) Position of the European Parliament of 12 March 2013 (not yet
published in the Official Journal) and decision of the Council of
investment in social businesses and that do not use the
21 March 2013.
designation ‘EuSEF’.

---

EN
25.4.2013 Official
Journal
of
the
European
Union L
115/19
(5) Defining
the
quality
requirements
for
the
use
of
the (8) Furthermore,
this
Regulation
applies
only
to
managers
of
designation ‘EuSEF’ in the form of a regulation ensures
those collective investment undertakings with assets
that those requirements are directly applicable to the
under management that in total do not exceed the
managers of collective investment undertakings that
threshold referred to in point (b) of Article 3(2) of
raise funds using that designation. This also ensures
Directive 2011/61/EU. The calculation of the threshold
uniform conditions for the use of the designation by
for the purposes of this Regulation is the same as for the
preventing diverging national requirements as a result
threshold of point (b) of Article 3(2) of Directive
of the transposition of a directive. Managers of collective
2011/61/EU.
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.
(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
(6) It
should
be
possible
for
a
qualifying
social
entrepre
able to continue to use the designation ‘EuSEF’ in
neurship fund to be externally or internally managed.
relation to the marketing of qualifying social entrepre
Where a qualifying social entrepreneurship fund is
neurship funds in the Union, provided that they comply
internally managed, the fund is also the manager and
with the requirements laid down in that Directive and
should therefore comply with all relevant requirements
that they continue to comply with certain requirements
for managers under this Regulation and be registered in
for the use of the designation ‘EuSEF’ specified in this
accordance with this Regulation. A qualifying social
Regulation at all times in relation to the qualifying social
entrepreneurship fund which is internally managed
entrepreneurship fund. This applies both to existing qual
should not, however, be permitted to be the external
ifying social entrepreneurship funds and to qualifying
manager of other collective investment undertakings or
social entrepreneurship funds established after exceeding
of undertakings for collective investment in transferable
the threshold.
securities (UCITS).
(7) In
order
to
clarify
the
relationship
between
this
Regu
(10) Where
managers
of
collective
investment
undertakings
lation and other rules on collective investment under
do not wish to use the designation ‘EuSEF’ then this
takings and their managers, it is necessary to establish
Regulation does not apply. In those cases, existing
that this Regulation only apply to managers of collective
national rules and general Union rules should continue
investment undertakings other than UCITS falling within
to apply.
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) ( 1 ), 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 Alter
(11) This
Regulation
should
establish
uniform
rules
on
the
native Investment Fund Managers ( 2 ), provided that those
nature of qualifying social entrepreneurship funds, in
managers manage portfolios of qualifying social entrepre
particular on qualifying portfolio undertakings into
neurship funds. However, external managers of qualifying
which the qualifying social entrepreneurship funds are
social entrepreneurship funds that are registered under
to be permitted to invest, and the investment instruments
this Regulation should also be allowed to manage
to be used. This is necessary so that a clear demarcation
UCITS, subject to authorisation under Directive
line can be drawn between a qualifying social entrepre
2009/65/EC.
neurship fund and alternative investment funds that
engage in other, less specialised, investment strategies,
( 1 ) OJ L 302, 17.11.2009, p. 32.
for example buyouts, which this Regulation is not
( 2 ) OJ L 174, 1.7.2011, p. 1.
seeking to promote.

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L 115/20
EN
Official Journal of the European Union
25.4.2013
(12) In
order
to
ensure
the
necessary
clarity
and
certainty,
this
(15) In
line
with
the
aim
of
precisely
circumscribing
the
Regulation should also lay down uniform criteria to
collective investment undertakings which are to be
identify social undertakings as qualifying portfolio under
covered by this Regulation and in order to ensure a
takings. A social undertaking should be defined as an
focus on providing capital to social undertakings, qual
operator in the social economy, the main objective of
ifying social entrepreneurship funds should be deemed to
which is to have a social impact rather than to make a
be funds that intend to invest at least 70 % of their
profit for its owners or shareholders. It operates by
aggregate capital contributions and uncalled committed
providing goods and services for the market and uses
capital in such undertakings. Qualifying social entrepre
its profits primarily to achieve social objectives. It is
neurship funds should not be permitted to invest more
managed in an accountable and transparent manner, in
than 30 % of their aggregate capital contributions and
particular, by involving employees, consumers and stake
uncalled committed capital in assets other than qualifying
holders that are affected by its commercial activities.
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
(13) As the principal objective of social undertakings is to
investment thresholds.
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
(16) The purpose of this Regulation is to enhance the growth
primary social objective and are managed in an
of social undertakings in the Union. Investments in qual
accountable and transparent way. Where, on an excep
ifying portfolio undertakings established in third
tional basis, a qualifying portfolio undertaking wishes to
countries can bring more capital to qualifying social
distribute profits to its shareholders and owners, it
entrepreneurship funds and can thereby benefit social
should have predefined procedures and rules on how
undertakings in the Union. However, under no circum
profits are to be distributed. Those rules should specify
stances should this Regulation benefit investments made
that such distribution of profits does not undermine the
in portfolio undertakings established in third countries
primary social objective of the qualifying social portfolio
characterised by a lack of appropriate cooperation
undertaking.
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 qual
ifying social entrepreneurship fund are intended to be
marketed or by a lack of effective exchange of
information in tax matters.
(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
(17) A
qualifying
social
entrepreneurship
fund
should,
as
a
production of goods or services which embodies their
first step, be established in the Union in order to be
social objective, but the activities of which be outside
entitled to use the designation ‘EuSEF’ as established by
the realm of the provision of social goods or services.
this Regulation. The Commission should, within two
Those activities include social and professional inte
years of the date of application of this Regulation,
gration by means of access to employment for people
review the limitation on the use of the designation
disadvantaged in particular by insufficient qualifications
‘EuSEF’ to funds established in the Union, taking into
or social or professional problems leading to exclusion
account experience of applying the Commission Recom
and marginalisation. Those activities may also concern
mendation regarding measures intended to encourage
environmental protection with a societal impact, such
third countries to apply minimum standards of good
as anti-pollution, recycling and renewable energy.
governance in tax matters.

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EN
25.4.2013 Official
Journal
of
the
European
Union L
115/21
(18) Managers
of
social
entrepreneurship
funds
should
be
able
threshold because such holdings are not to be considered
to attract additional capital commitments during the life
as investments. Qualifying social entrepreneurship funds
of a fund. Such additional capital commitments during
should invest in a manner consistent with their ethical
the life of the qualifying social entrepreneurship fund
investment strategy, for instance they should not
should be taken into account when the next investment
undertake investments that finance the weapons
in assets other than qualifying assets is contemplated.
industry, that risk breaches of human rights or that
Additional capital commitments should be permitted in
entail electronic waste-dumping.
accordance with criteria and subject to conditions set out
in the qualifying social entrepreneurship fund’s rules or
instruments of incorporation.
(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
(19) Taking
into
account
the
specific
funding
needs
of
social
funds that comply with the uniform quality criteria as
undertakings, it is necessary to achieve clarity regarding
set out in this Regulation should be eligible to use the
the types of instruments that a qualifying social entre
designation ‘EuSEF’ when marketing qualifying social
preneurship fund should use for such funding. Therefore,
entrepreneurship funds across the Union.
this Regulation lays down uniform rules on the eligible
instruments to be used by a qualifying social entrepre
neurship 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
(23) In
order
to
ensure
that
qualifying
social
entrepreneurship
should only be permitted to invest in other qualifying
funds have a distinct and identifiable profile which is
social entrepreneurship funds where those other qual
suited to their purpose, there should be uniform rules
ifying social entrepreneurship funds have not themselves
on the composition of the portfolio and on the
invested more than 10 % of their aggregate capital
investment techniques which are permitted for such
contributions and uncalled committed capital into other
funds.
qualifying social entrepreneurship funds.
(24) In
order
to
ensure
that
qualifying
social
entrepreneurship
funds do not contribute to the development of systemic
(20) The
core
activities
of
qualifying
social
entrepreneurship
funds are to provide financing to social undertakings
risks, and that such funds concentrate, in their
through primary investments. Qualifying social entrepre
investment activities, on supporting qualifying portfolio
neurship funds should neither participate in systemically
undertakings, the use of leverage at the level of the fund
important banking activities outside of the usual
should not be permitted. Managers of qualifying social
prudential regulatory framework (so-called ‘shadow
entrepreneurship funds should only be permitted to
banking’) nor follow typical private equity strategies,
borrow, issue debt obligations or provide guarantees, at
such as leveraged buyouts.
the level of the qualifying social entrepreneurship fund,

provided that such borrowings, debt obligations or guar
antees 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.
(21) To
maintain
the
necessary
flexibility
in
its
investment
Also, in order to permit the fund to cover extraordinary
portfolio, qualifying social entrepreneurship funds
liquidity needs that might arise between a call of
should be able to invest in assets other than qualifying
committed capital from investors and the actual
investments to the extent that those other investments do
reception of the capital in its accounts, short-term
not exceed the 30 % threshold for non-qualifying invest
borrowing should be allowed provided that the amount
ments. Holdings of cash and cash equivalents should not
of such borrowing does not exceed the fund’s uncalled
be taken into account for the calculation of that
committed capital.

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L 115/22
EN
Official Journal of the European Union
25.4.2013
(25) In
order
to
ensure
that
qualifying
social
entrepreneurship
Moreover, the manager should not delegate functions to
funds are only marketed to investors who have the
the extent that, in essence, it can no longer be considered
experience, knowledge and expertise to make their own
to be a manager of a qualifying social entrepreneurship
investment decisions and properly assess the risks that
fund and has become a letter-box entity. The manager
those funds carry, and in order to maintain investor
should remain responsible for the proper performance of
confidence and trust in qualifying social entrepreneurship
delegated functions and compliance with this Regulation
funds, certain specific safeguards should be laid down.
at all time. The delegation of functions should not
Therefore, qualifying social entrepreneurship funds
undermine the effectiveness of supervision of the
should only be marketed to investors who are profes
manager, and, in particular, should not prevent the
sional clients or who can be treated as professional
manager from acting, or the fund from being managed,
clients under Directive 2004/39/EC of the European
in the best interests of its investors.
Parliament and of the Council of 21 April 2004 on
markets in financial instruments ( 1 ). 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 entrepre
neurship funds are only marketed to investors that have
the appropriate profile for making such investments.
(28) The
creation
of
positive
social
impacts
in
addition
to
the
Those safeguards exclude marketing through the use of
generation of financial returns for investors is a key char
periodic savings plans. Furthermore, investments made
acteristic of investment funds targeting social under
by executives, directors or employees involved in the
takings, one which distinguishes them from other types
management of a manager of a qualifying social entre
of investment funds. This Regulation should therefore
preneurship fund should be possible when investing in
require that a manager of a qualifying social entrepre
the qualifying social entrepreneurship funds they manage,
neurship fund put in place procedures for measuring the
as such individuals are knowledgeable enough to
positive social impacts which are to be achieved by
participate in such investments.
investment into qualifying portfolio undertakings.
(26) To
ensure
that
only
managers
of
qualifying
social
entre
(29) Currently
funds
that
target
social
outcomes
or
impacts
preneurship funds that fulfil uniform quality criteria as
typically assess and collate information on the extent to
regards their behaviour in the market use the designation
which social undertakings achieve the outcomes or
‘EuSEF’, there should be rules on the conduct of business
impacts that they are targeting. There are a wide range
and the relationship of those managers with their
of different kinds of social outcomes or impacts that a
investors. For the same reason, uniform conditions
social undertaking might target. Different ways of iden
concerning the handling of conflicts of interest by such
tifying and measuring the social outcomes or impacts
managers should be established. Those rules and
have thereby developed. For instance, a firm that seeks
conditions should also require the manager to have the
to employ disadvantaged persons may report on the
necessary organisational and administrative arrangements
numbers of such persons employed who would not
in place to ensure a proper handling of conflicts of
otherwise have been employed and a firm that seeks to
interest.
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
(27) Where a manager of a qualifying social entrepreneurship
encourage the greatest consistency and comparability of
fund intends to delegate functions to third parties, the
such information in the longer term and the greatest
manager’s liability towards the qualifying social entrepre
efficiency in the procedures for obtaining the
neurship fund and the investors therein should not be
information, delegated acts should be developed in this
affected by such delegation of functions to a third party.
area. Such delegated acts should also ensure greater
clarity for supervisors, qualifying social entrepreneurship
( 1 ) OJ L 145, 30.4.2004, p. 1.
funds and social undertakings.

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EN
25.4.2013 Official
Journal
of
the
European
Union L
115/23
(30) In
order
to
ensure
the
integrity
of
the
designation
‘EuSEF’,
that are specific to investments into social undertakings,
quality criteria as regards the organisation of a manager
so that greater consistency and comparability of such
of a qualifying social entrepreneurship fund should be
information can be achieved. This includes information
established. Therefore, uniform, proportionate
about the criteria and the procedures which are used to
requirements for the need to maintain adequate
select particular qualifying portfolio undertakings as
technical and human resources should be laid down.
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
(31) In
order
to
ensure
the
proper
management
of
qualifying
qualifying portfolio undertakings and how these are
social entrepreneurship funds and the ability of their
selected.
managers to cover potential risks arising from their activ
ities, 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.
(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 entre
preneurship fund with the uniform requirements set out
in this Regulation. To that end, managers that intend to
(32) It is necessary for the purpose of investor protection to
market their funds under the designation ‘EuSEF’ should
ensure that the assets of qualifying social entrepre
inform the competent authority of their home Member
neurship funds are properly evaluated. The rules or
State of that intention. The competent authority should
instruments of incorporation of qualifying social entre
register the manager if all necessary information has been
preneurship funds should therefore contain provisions on
provided and if suitable arrangements to comply with the
the valuation of assets. This should ensure the integrity
requirements of this Regulation are in place. Such regis
and the transparency of the valuation.
tration should be valid across the entire Union.
(33) In
order
to
ensure
that
managers
of
qualifying
social
entrepreneurship funds which make use of the desig
(37) In
order
to
facilitate
the
efficient
cross-border
marketing
nation ‘EuSEF’ give sufficient account of their activities,
of qualifying social entrepreneurship fund, registration of
uniform rules on annual reports should be established.
the manager should be effected as quickly as possible.
(34) While safeguards are included in this Regulation to
(38) In
order
to
ensure
effective
supervision
of
compliance
ascertain that funds are properly used, supervisory auth
with the uniform criteria laid down in this Regulation,
orities should be vigilant in ensuring that those safe
rules on the circumstances under which information
guards are complied with.
supplied to the competent authority in the home
Member State needs to be updated should be established.
(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 entrepre
(39) For the effective supervision of the requirements laid
neurship funds that are fully transparent as to their
down in this Regulation, a process for cross-border
investment policy and their investment targets. Uniform
notifications between the competent supervisory auth
rules on disclosure requirements that are incumbent on
orities, to be triggered by the registration of a manager
managers in relation to its investors should therefore be
of a qualifying social entrepreneurship fund in its home
laid down. Those rules should include those elements
Member State, should also be established.

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L 115/24
EN
Official Journal of the European Union
25.4.2013
(40) In
order to maintain transparent conditions for the
(45) Supervisory
information
should
be
exchanged
between
marketing of qualifying social entrepreneurship funds
the competent authorities in the home and host
across the Union, the European Supervisory Authority
Member States and ESMA.
(European Securities and Markets Authority) (‘ESMA’)
established by Regulation (EU) No 1095/2010 of the
European Parliament and of the Council ( 1 ) 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 Regu
(46) Effective regulatory cooperation among the entities
lation.
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.
(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
(47) The
contribution
of
qualifying
social
entrepreneurship
measures.
funds to the growth of a European market for social
investments will depend on the take-up of the desig
nation ‘EuSEF’ by managers of qualifying social entrepre
neurship funds, the recognition of the designation by
investors and the development of a strong eco-system
(42) If
a
manager
of
a
qualifying
social
entrepreneurship
fund
for social enterprises across the Union that aids those
persists in acting in a manner that is clearly in conflict
enterprises in availing themselves of the financing
with this Regulation despite the measures taken by the
options provided. To that end, all stakeholders,
competent authority of the home Member State or
including market operators, competent authorities in
because the competent authority of the home Member
Member States, the Commission and other relevant
State fails to take measures within a reasonable time
entities within the Union, should endeavour to ensure
frame, the competent authority of the host Member
a high level of awareness of the possibilities presented
State should be able, after informing the competent
by this Regulation.
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.
(48) In order to specify the requirements set out in this Regu
lation, 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
(43) In order to ensure
the effective supervision of the
uniform criteria established, this Regulation contains a
services embodying a social objective and the circum
list of supervisory powers that competent authorities
stances in which profits may be distributed to owners
must have at their disposal.
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
(44) In
order
to
ensure
proper
enforcement,
this
Regulation
for investors. It is of particular importance that the
contains administrative penalties and other measures for
Commission carry out appropriate consultations during
the breach of its key provisions, namely the rules on
its preparatory work, including at expert level, taking into
portfolio composition, on safeguards relating to the
account self-regulatory initiatives and codes of conduct.
identity of eligible investors, and on the use of the desig
The consultations carried out by the Commission during
nation ‘EuSEF’ only by managers of qualifying social
its preparatory work regarding delegated acts on the
entrepreneurship funds managers that are registered in
details of the procedures to measure the social impacts
accordance with this Regulation. A breach of those key
to be achieved by the qualifying portfolio undertakings
provisions should entail, where appropriate, prohibition
should involve relevant stakeholders and ESMA. The
of the use of the designation and the removal of the
Commission, when preparing and drawing up delegated
manager concerned from the register.
acts, should ensure a simultaneous, timely and appro
priate transmission of relevant documents to the
( 1 ) OJ L 331, 15.12.2010, p. 84.
European Parliament and to the Council.

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EN
25.4.2013 Official
Journal
of
the
European
Union L
115/25
(49) Technical
standards
in
financial
services
should
ensure
7 December 2011 entitled ‘An action plan to improve
consistent harmonisation and a high level of supervision
access to finance for SMEs’ and in the context of its
across the Union. As a body with highly specialised
review of this Regulation, the Commission should
expertise, it would be efficient and appropriate to
consider undertaking an equivalent examination of
entrust ESMA with the elaboration of draft implementing
possible tax obstacles for social entrepreneurship funds
technical standards where these do not involve policy
and assess possible tax incentives aimed at encouraging
choices, for submission to the Commission.
social entrepreneurship in the Union.
(50) The
Commission
should
be
empowered
to
adopt
imple
(55) ESMA
should
assess
its
staffing
and
resources
needs
menting technical standards by means of implementing
arising from the assumption of its powers and duties
acts pursuant to Article 291 TFEU and in accordance
in accordance with this Regulation and submit a report
with Article 15 of Regulation (EU) No 1095/2010.
to the European Parliament, to the Council and to the
ESMA should be entrusted with drafting implementing
Commission.
technical standards for the format of the notification
referred to in this Regulation.
(56) This
Regulation
respects
fundamental
rights
and
observes
the principles recognised in particular by the Charter of
(51) Within four years of the date of application of this Regu
Fundamental Rights of the European Union, including
lation, the Commission should carry out a review of this
the right to respect for private and family life (Article 7)
Regulation in order to assess the development of the
and freedom to conduct a business (Article 16).
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
(57) Directive
95/46/EC
of
the
European
Parliament
and
of
report to the European Parliament and the Council
the Council of 24 October 1995 on the protection of
accompanied, if appropriate, by legislative proposals.
individuals with regard to the processing of personal data
and on the free movement of such data ( 1 ) 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,
(52) Furthermore, within four years of the date of application
of this Regulation, the Commission should start a review
in particular the public independent authorities
of the interaction between this Regulation and other rules
designated by the Member States. Regulation (EC) No
on collective investment undertakings and their
45/2001 of the European Parliament and of the
managers, in particular those of Directive 2011/61/EU.
Council of 18 December 2000 on the protection of
In particular, that review should address the scope of this
individuals with regard to the processing of personal
Regulation assessing whether it is necessary to extend the
data by the Community institutions and bodies and on
scope to allow larger alternative investment funds
the free movement of such data
( 2 ), governs the
managers to use the designation ‘EuSEF’. On the basis
processing of personal data carried out by ESMA
of the review, the Commission should submit a report
within the framework of this Regulation and under the
to the European Parliament and to the Council accom
supervision of the European Data Protection Supervisor.
panied, if appropriate, by legislative proposals.
(58) Since
the
objective
of
this
Regulation,
namely
to
develop
(53) In
the
context
of
that
review,
the
Commission
should
an internal market for qualifying social entrepreneurship
evaluate any barriers that may have impeded the
funds by laying down a framework for the registration of
uptake of the funds by investors, including the impact
managers of qualifying social entrepreneurship funds,
on institutional investors of other regulation as may
thereby facilitating the marketing of qualifying social
apply to them of a prudential nature. In addition, the
entrepreneurship funds throughout the Union, cannot
Commission should gather data for assessing the
be sufficiently achieved by the Member States and can
contribution of the designation ‘EuSEF’ to other Union
therefore, by reason of its scale and effects, be better
programmes such as Horizon 2020, which also seek to
achieved at Union level, the Union may adopt
support innovation in the Union.
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,
(54) In
relation to the Commission’s examination of tax
obstacles to cross-border venture capital investments as
( 1 ) OJ L 281, 23.11.1995, p. 31.
provided for in the Commission Communication of
( 2 ) OJ L 8, 12.1.2001, p. 1.

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L 115/26
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Official Journal of the European Union
25.4.2013
HAVE ADOPTED THIS REGULATION:
accordance with Article 6 of that Directive, they may
continue to use the designation ‘EuSEF’ in relation to the
marketing of qualifying social entrepreneurship funds in the
Union provided that, at all times in relation to the qualifying
social entrepreneurship funds that they manage, they:
CHAPTER I
SUBJECT MATTER, SCOPE AND DEFINITIONS
Article 1
(a) comply with the requirements laid down in Directive
This Regulation lays down uniform requirements and conditions
2011/61/EU; and
for managers of collective investment undertakings that wish to
use the designation ‘EuSEF’ in relation to the marketing of
qualifying social entrepreneurship funds in the Union, thereby
contributing to the smooth functioning of the internal market.
(b) continue to comply with Articles 3, 5, 10, Article 13(2) and
points (d), (e) and (f) of Article 14(1) of this Regulation.
It also lays down uniform rules for the marketing of qualifying
social entrepreneurship funds to eligible investors across the
3. Where
managers
of
qualifying
social
entrepreneurship
Union, for the portfolio composition of qualifying social entre
funds are external managers and are registered in accordance
preneurship funds, for the eligible investment instruments and
with Article 15, they may additionally manage undertakings for
techniques to be used by qualifying social entrepreneurship
collective investment in transferable securities (UCITS), subject
funds as well as for the organisation, conduct and transparency
to authorisation under Directive 2009/65/EC.
of managers that market qualifying social entrepreneurship
funds across the Union.
Article 3
Article 2
1. For the purposes of this Regulation, the following defi
nitions shall apply:
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) ‘collective investment undertaking’ means an AIF as defined
in point (a) of Article 4(1) of Directive 2011/61/EU;
(a) their assets under management in total do not exceed the
threshold referred to in point (b) of Article 3(2) of Directive
2011/61/EU;
(b) ‘qualifying social entrepreneurship fund’ means a collective
investment undertaking that:
(b) they are established in the Union;
(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
(c) they are subject to registration with the competent auth
costs and holdings in cash and cash equivalents,
orities of their home Member State in accordance with
within a time frame laid down in its rules or
point (a) of Article 3(3) of Directive 2011/61/EU; and
instruments of incorporation;
(d) they manage portfolios of qualifying social entrepreneurship
(ii) does not use more than 30 % of its aggregate capital
funds.
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
2. Where
the
total
assets
under
management
of
managers
of
and cash equivalents;
qualifying social entrepreneurship fund registered in accordance
with Article 15 subsequently exceed the threshold referred to in
point (b) of Article 3(2) of Directive 2011/61/EU, and where
those managers are therefore subject to authorisation in
(iii) is established within the territory of a Member State;

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Union L
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(c) ‘manager of a qualifying social entrepreneurship fund’
(v) is established within the territory of a Member State, or
means a legal person the regular business of which is
in a third country provided that the third country:
managing at least one qualifying social entrepreneurship
fund;
— is not listed as a Non-Cooperative Country and
Territory by the Financial Action Task Force on
(d) ‘qualifying portfolio undertaking’ means an undertaking
Anti-Money Laundering and Terrorist Financing,
that:
(i) at the time of an investment by the qualifying social
— has signed an agreement with the home Member
entrepreneurship fund is not admitted to trading on a
State of the manager of a qualifying social entre
regulated market or on a multilateral trading facility
preneurship fund and with each other Member
(MTF) as defined in point (14) and point (15) of
State in which the units or shares of the qualifying
Article 4(1) of Directive 2004/39/EC;
social entrepreneurship fund are intended to be
marketed 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 multi
(ii) has the achievement of measurable, positive social
lateral tax agreements;
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:
(e) ‘qualifying investments’ means any of the following instru
ments:
— provides services or goods to vulnerable or margi
nalised, disadvantaged or excluded persons,
(i) equity or quasi-equity instruments that are issued by:
— employs a method of production of goods or
services that embodies its social objective, or
— a qualifying portfolio undertaking and acquired
directly by the qualifying social entrepreneurship
fund from the qualifying portfolio undertaking,
— provides financial support exclusively to social
undertakings as defined in the first two indents;
— a qualifying portfolio undertaking in exchange for
an equity security issued by the qualifying portfolio
undertaking, or
(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 incor
poration establishing the business and with the
predefined procedures and rules therein, which
determine the circumstances in which profits are
— an undertaking of which the qualifying portfolio
distributed to shareholders and owners to ensure that
undertaking is a majority-owned subsidiary and
any such distribution of profits does not undermine its
which is acquired by the qualifying social entrepre
primary objective;
neurship fund in exchange for an equity instrument
issued by the qualifying portfolio undertaking;
(iv) is managed in an accountable and transparent way, in
particular by involving workers, customers and stake
(ii) securitised and un-securitised debt instruments, issued
holders affected by its business activities;
by a qualifying portfolio undertaking;

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L 115/28
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Official Journal of the European Union
25.4.2013
(iii) units or shares of one or several other qualifying social
down in the rules or instruments of incorporation of the
entrepreneurship funds, provided that those qualifying
qualifying social entrepreneurship fund, to acquire an
social entrepreneurship funds have not themselves
interest in, or to make capital contributions to, that fund;
invested more than 10 % of their aggregate capital
contributions and uncalled committed capital in qual
ifying social entrepreneurship funds;
(k) ‘home Member State’ means the Member State where the
manager of a qualifying social entrepreneurship fund is
(iv) secured or unsecured loans granted by the qualifying
established and is subject to registration with the
social entrepreneurship fund to a qualifying portfolio
competent authorities in accordance with point (a) of
undertaking;
Article 3(3) of Directive 2011/61/EU;
(v) any other type of participation in a qualifying portfolio
undertaking;
(l) ‘host Member State’ means the
Member State,
other
than
the home Member State, where the manager of a qualifying
social entrepreneurship fund markets qualifying social
entrepreneurship funds in accordance with this Regulation;
(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 entre
preneurship fund and the investors therein;
(m) ‘competent authority’ means the national authority which
the home Member State designates, by law or regulation, to
undertake the registration of managers of collective
investment undertakings falling within the scope of this
(g) ‘equity’ means ownership interest in an undertaking, repre
Regulation.
sented by the shares or other forms of participation in the
capital of the qualifying portfolio undertaking issued to its
investors;
With regard to point (c) of the first subparagraph, where the
(h) ‘quasi-equity’ means any type of financing instrument
legal form of a qualifying social entrepreneurship fund permits
which is a combination of equity and debt, where the
internal management and where the governing body of the fund
return on the instrument is linked to the profit or loss of
does not appoint an external manager, the qualifying social
the qualifying portfolio undertaking and where the
entrepreneurship fund itself shall be registered as the manager
repayment of the instrument in the event of default is
of a qualifying social entrepreneurship fund in accordance with
not fully secured;
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 qual
ifying social entrepreneurship fund of other collective
investment undertakings.
(i) ‘marketing’
means
a
direct
or
indirect
offering
or
placement
at the initiative of the manager of a qualifying social entre
preneurship 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 Union;
2. The
Commission
shall
be
empowered
to
adopt
delegated
acts in accordance with Article 26 specifying 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
(j) ‘committed capital’ means any commitment pursuant to
those circumstances in which profits can be distributed to
which an investor is obliged, within the time frame laid
owners and investors.

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CHAPTER II
2. Paragraph
1
shall
not
apply
to
investments
made
by
executives, directors or employees involved in the management
CONDITIONS FOR THE USE OF THE DESIGNATION ‘EuSEF’
of a manager of a qualifying social entrepreneurship fund when
Article 4
investing in the qualifying social entrepreneurship funds that
they manage.
Managers of qualifying social entrepreneurship funds that
comply with the requirements set out in this Chapter shall be
entitled to use the designation ‘EuSEF’ in relation to the
marketing of qualifying social entrepreneurship funds across
Article 7
the Union.
Managers of qualifying social entrepreneurship funds shall, in
relation to the qualifying social entrepreneurship funds they
manage:
Article 5
1. Managers
of
qualifying
social
entrepreneurship
funds
shall (a) act honestly, fairly and with due skill, care and diligence in
ensure that, when acquiring assets other than qualifying invest
conducting their activities;
ments, no more than 30 % of the qualifying social entrepre
neurship 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
(b) apply appropriate policies and procedures for preventing
amounts investible after the deduction of all relevant costs.
malpractices that can reasonably be expected to affect the
Holdings in cash and cash equivalents shall not be taken into
interests of the investors and the qualifying portfolio under
account for calculating that threshold as cash and cash equiv
takings;
alents are not to be considered as investments.
(c) conduct their business activities in such a way as to
promote the positive social impact of the qualifying
2. Managers
of
qualifying
social
entrepreneurship
funds
shall
portfolio undertakings in which they have invested, the
not employ at the level of the qualifying social entrepreneurship
best interests of the qualifying social entrepreneurship
fund any method by which the exposure of the fund will be
funds that they manage, the investors therein and the
increased beyond the level of its committed capital, whether
integrity of the market;
through borrowing of cash or securities, engaging in derivative
positions or by any other means.
(d) apply a high level of diligence in the selection and ongoing
monitoring of investments in qualifying portfolio under
takings and the positive social impact of those under
3. Managers
of
qualifying
social
entrepreneurship
funds
may
takings;
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.
(e) possess adequate knowledge and understanding of the qual
ifying portfolio undertakings in which they invest;
Article 6
(f) treat
their
investors
fairly;
1. Managers
of
qualifying
social
entrepreneurship
fund
shall
market the units and shares of the qualifying social entrepre
neurship fund exclusively to investors which are considered to
be professional clients in accordance with Section I of Annex II
(g) ensure that no investor obtains preferential treatment,
to Directive 2004/39/EC, or which may, on request, be treated
unless such preferential treatment is disclosed in the rules
as professional clients in accordance with Section II of Annex II
or instruments of incorporation of the qualifying social
to Directive 2004/39/EC, or to other investors that:
entrepreneurship fund.
Article 8
(a) commit to invest a minimum of EUR 100 000; and
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
(b) state in writing, in a separate document from the contract
not delegate functions to the extent that, in essence, it can no
that is concluded for the commitment to invest, that they
longer be considered to be the manager of the qualifying social
are aware of the risks associated with the envisaged
entrepreneurship fund and to the extent that it becomes a letter-
commitment.
box entity.

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L 115/30
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Official Journal of the European Union
25.4.2013
2. Any delegation of functions under paragraph 1 shall not
arrangements made by a manager of a qualifying social entre
undermine the effectiveness of supervision of the manager of a
preneurship fund to identify, prevent, manage and monitor
qualifying social entrepreneurship fund, and, in particular, shall
conflicts of interest are not sufficient to ensure, with reasonable
not prevent that manager from acting, or the qualifying social
confidence, that risks of damage to investors’ interests will be
entrepreneurship fund from being managed, in the best interests
prevented. A manager of a qualifying social entrepreneurship
of the investors therein.
fund shall disclose in clear terms the general nature or
sources of conflicts of interest to the investors before under
taking business on their behalf.
Article 9
5. The
Commission
shall
be
empowered
to
adopt
delegated
1. Managers
of
qualifying
social
entrepreneurship
funds
shall acts in accordance with Article 26 specifying:
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
(a) the types of conflicts of interest referred to in paragraph 2
of the qualifying social entrepreneurship funds and the
of this Article;
investors therein and to ensure that the qualifying social entre
preneurship funds that they manage are fairly treated.
(b) the steps that managers of a qualifying social entrepre
neurship fund must take, in terms of structures and organi
sational and administrative procedures, in order to identify,
2. Managers
of
qualifying
social
entrepreneurship
funds
shall
prevent, manage, monitor and disclose conflicts of interest.
identify in particular those conflicts of interest that may arise
between:
Article 10
1. Managers
of
a
qualifying
social
entrepreneurship
fund
(a) managers of qualifying social entrepreneurship funds,
shall employ for each qualifying social entrepreneurship fund
persons who effectively conduct the business of those
that they manage, procedures to measure the extent to which
managers, employees of, or any person who directly or
the qualifying portfolio undertakings, in which the qualifying
indirectly controls or is controlled by, those managers,
social entrepreneurship fund invests, achieve the positive
and the qualifying social entrepreneurship fund managed
social impact to which they are committed. The managers
by those managers, or the investors therein;
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:
(b) a qualifying social entrepreneurship fund or the investors
therein, and another qualifying social entrepreneurship
fund managed by the same manager, or the investors
(a) employment and labour markets;
therein;
(b) standards and rights related to job quality;
(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.
(c) social inclusion and protection of particular groups;
(d) equal treatment, equal opportunities and non-discrimi
3. Managers
of
qualifying
social
entrepreneurship
funds
shall
nation;
maintain and operate effective organisational and administrative
arrangements in order to comply with the requirements laid
down in paragraphs 1 and 2.
(e) public health and safety;
4. Disclosures
of
conflicts
of
interest
as
referred
to
in
(f) access to and effects on social protection and on health and
paragraph 1 shall be provided, where organisational
educational systems.

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2. The
Commission
shall
be
empowered
to
adopt
delegated entrepreneurship fund and the activities of the previous year.
acts in accordance with Article 26 specifying the details of the
It shall also disclose the profits earned by the qualifying social
procedures referred to in paragraph 1 of this Article, in relation
entrepreneurship fund at the end of its life and, where appli
to different qualifying portfolio undertakings.
cable, the profits distributed during its life. It shall contain the
audited financial accounts for the qualifying social entrepre
neurship fund. The annual report shall be produced in
accordance with existing reporting standards and the terms
agreed between the managers of qualifying social entrepre
neurship funds and the investors. Managers of qualifying
Article 11
social entrepreneurship funds shall provide the report to
1. At
all
times,
managers
of
qualifying
social
entrepre
investors on request. Managers of qualifying social entrepre
neurship funds shall have sufficient own funds and use
neurship funds and investors may agree additional disclosures
adequate and appropriate human and technical resources as
to each other.
necessary for the proper management of the qualifying social
entrepreneurship fund that they manage.
2. The
annual
report
shall
at
least
include
the
following:
2. At
all
times,
managers
of
qualifying
social
entrepre
neurship funds shall ensure that they are able to justify the
sufficiency of their own funds to maintain operational
(a) details, as appropriate, of the overall social outcomes
continuity and disclose their reasoning as to why those funds
achieved by the investment policy and the method used
are sufficient as specified in Article 14.
to measure those outcomes;
Article 12
(b) a statement of any divestments in relation to qualifying
portfolio undertakings that have occurred;
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.
(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
2. The
valuation
procedures
used
shall
ensure
that
the
assets
point (f) of Article 14(1);
are valued properly and that the asset value is calculated at least
annually.
(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
3. In
order
to
ensure
consistency
in
the
valuation
of
qual
(l) of Article 14(1);
ifying portfolio undertakings, ESMA shall develop guidelines
setting out common principles on the treatment of investments
in such undertakings taking into account their primary objective
of achieving a measurable positive social impact and the use of
their profits first and foremost for the achievement of that
(e) information on the nature and purpose of the investments
impact.
other than qualifying investments referred to in Article 5(1).
Article 13
3. An
audit
of
the
qualifying
social
entrepreneurship
fund
shall be conducted at least annually. The audit shall confirm
1. Managers
of
qualifying
social
entrepreneurship
funds
shall that money and assets are held in the name of the qualifying
make available an annual report to the competent authority of
social entrepreneurship fund and that the manager of a qual
the home Member State for each qualifying social entrepre
ifying social entrepreneurship fund has established and main
neurship fund that they manage, by six months following the
tained adequate records and checks in respect of the use of any
end of the financial year. The report shall describe the
mandate or control over the money and assets of the qualifying
composition of the portfolio of the qualifying social
social entrepreneurship fund and the investors therein.

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4. Where
the
manager
of
a
qualifying
social
entrepreneurship
(v) the techniques that it intends to employ; and
fund is required to make public an annual financial report in
accordance with Article 4 of Directive 2004/109/EC of the
European Parliament and Council of 15 December 2004 on
the harmonisation of transparency requirements in relation to
(vi) any applicable investment restrictions;
information about issuers the securities of which are admitted
to trading on a regulated market ( 1 ) 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.
(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;
Article 14
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
(e) the methodologies to be used to measure social impacts;
decision of the latter, in a clear and understandable manner,
of the following:
(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
(a) the identity of that manager and of any other service
cash equivalents;
providers contracted by that manager in relation to their
management, and a description of their duties;
(g) a description of the risk profile of the qualifying social
entrepreneurship fund and any risks associated with the
(b) the amount of own funds available to that manager, as well
assets in which the fund may invest or the investment
as a detailed statement as to why that manager considers
techniques that may be employed;
that amount to be sufficient for maintaining the adequate
human and technical resources necessary for the proper
management of its qualifying social entrepreneurship funds;
(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
(c) a description of the investment strategy and objectives of
qualifying portfolio undertakings;
the qualifying social entrepreneurship fund, including:
(i) a description of how the remuneration of the manager of a
qualifying social entrepreneurship fund is calculated;
(i) the types of qualifying portfolio undertakings in which
it intends to invest;
(j) a description of all relevant costs and of the maximum
amounts thereof;
(ii) any other qualifying social entrepreneurship fund in
which it intends to invest;
(k) where available, the historical financial performance of the
qualifying social entrepreneurship fund;
(iii) the types of qualifying portfolio undertakings in which
any other qualifying social entrepreneurship fund, as
referred to in point (ii), intends to invest;
(l) the business support services and the other support
activities the manager of a qualifying social entrepre
neurship fund is providing or arranging through third
parties in order to facilitate the development, growth or
(iv) the non-qualifying investments which it intends to
in some other respect the ongoing operations of the qual
make;
ifying portfolio undertakings in which the qualifying social
entrepreneurship fund invests, or, where these services or
( 1 ) OJ L 390, 31.12.2004, p. 38.
activities are not provided, an explanation of that fact;

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(m) a description of the procedures by which the qualifying
(a) the identity of the persons who effectively conduct the
social entrepreneurship fund may change its investment
business of managing qualifying social entrepreneurship
strategy or investment policy, or both.
funds;
(b) the identity of the qualifying social entrepreneurship funds,
2. All
of
the
information
referred
to
in
paragraph
1
shall
be
the units or shares of which are to be marketed and their
fair, clear and not misleading. It shall be kept up-to-date and
investment strategies;
reviewed regularly where relevant.
(c) information on the arrangements made for complying with
the requirements of Chapter II;
3. Where
the
manager
of
a
qualifying
social
entrepreneurship
fund is required to publish a prospectus in accordance with
Directive 2003/71/EC of the European Parliament and of the
Council of 4 November 2003 on the prospectus to be
(d) a list of Member States where the manager of a qualifying
published when securities are offered to the public or
social entrepreneurship fund intends to market each qual
admitted to trading ( 1 ) or in accordance with national law in
ifying social entrepreneurship fund;
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.
(e) a list of Member States where the manager of a qualifying
social entrepreneurship fund has established, or intends to
establish, qualifying social entrepreneurship funds.
4. The
Commission
shall
be
empowered
to
adopt
delegated
acts in accordance with Article 26 specifying:
2. The
competent
authority
of
the
home
Member
State
shall
register the qualifying social entrepreneurship fund manager
only if the following conditions are met:
(a) the content of the information referred to in points (c) to (f)
and (l) of paragraph 1 of this Article;
(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) 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.
(b) the information required referred to in paragraph 1 is
complete;
CHAPTER III
(c) the arrangements notified according to in point (c) of
SUPERVISION AND ADMINISTRATIVE COOPERATION
paragraph 1 are suitable for complying with the
Article 15
requirements of Chapter II;
1. Managers
of
qualifying
social
entrepreneurship
funds
that
intend to use of the designation ‘EuSEF’ for the marketing of
their qualifying social entrepreneurship funds shall inform the
competent authority of their home Member State of their
(d) the list notified according to point (e) of paragraph 1 reveals
intention and shall provide the following information:
that all of the qualifying social entrepreneurship funds are
established in accordance with point (b)(iii) of Article 3(1) of
( 1 ) OJ L 345, 31.12.2003, p. 64.
this Regulation.

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L 115/34
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3. Registration
under
this
Article
shall
be
valid
in
the
entire in accordance with the procedure laid down in Article 15 of
territory of the Union and shall allow managers of qualifying
Regulation (EU) No 1095/2010.
social entrepreneurship funds to market qualifying social entre
preneurship funds under the designation ‘EuSEF’ throughout the
Union.
Article 18
Article 16
ESMA shall maintain a central database, publicly accessible on
the internet, listing all managers of qualifying social entrepre
Managers of qualifying social entrepreneurship funds shall
neurship funds, registered in accordance with Article 15, and
inform the competent authority of the home Member State
the qualifying social entrepreneurship funds that they market, as
where they intend to market:
well as the countries in which those funds are marketed.
(a) a new qualifying social entrepreneurship fund; or
Article 19
1. The
competent
authority
of
the
home
Member
State
shall
supervise compliance with the requirements laid down in this
(b) an existing qualifying social entrepreneurship fund in a
Regulation.
Member State not mentioned in the list referred to in
point (d) of Article 15(1).
2. Where
there
are
clear
and
demonstrable
grounds
that
lead
Article 17
the competent authority of the host Member State to believe
1. Immediately after the registration of a manager of a qual
that the manager of a qualifying social entrepreneurship fund is
ifying social entrepreneurship fund, the addition of a new qual
in breach of this Regulation within its territory, it shall
ifying social entrepreneurship fund, the addition of a new
promptly inform the competent authority of the home
domicile for the establishment of a qualifying social entrepre
Member State accordingly. The competent authority of the
neurship fund or the addition of a new Member State where a
home Member State shall take appropriate measures.
manager of a qualifying social entrepreneurship fund intends to
market qualifying social entrepreneurship funds, the competent
authority of the home Member State shall notify the Member
States indicated in accordance with point (d) of Article 15(1)
and ESMA, accordingly.
3. If
the
manager
of
a
qualifying
social
entrepreneurship
fund
persists in acting in a manner that is clearly in breach of this
Regulation despite measures taken by the competent authority
of the home Member State or because that competent authority
2. The
host
Member
States
indicated
in
accordance
with has failed to take measures within reasonable time, the
point (d) of Article 15(1) of this Regulation shall not impose,
competent authority of the host Member State may, after
on the manager of a qualifying social entrepreneurship fund
informing the competent authority of the home Member
registered in accordance with Article 15, any requirements or
State, take all the appropriate measures in order to protect
administrative procedures in relation to the marketing of its
investors, including prohibiting the manager of a qualifying
qualifying social entrepreneurship fund, nor shall they require
social entrepreneurship fund from carrying out any further
any approval of the marketing prior to its commencement.
marketing of its qualifying social entrepreneurship funds
within the territory of the host Member State.
3. In
order
to
ensure
uniform
application
of
this
Article,
ESMA shall develop draft implementing technical standards to
determine the format of the notification under this Article.
Article 20
Competent authorities shall, in accordance with national law,
have all supervisory and investigatory powers that are necessary
for the exercise of their functions. They shall, in particular, have
4. ESMA
shall
submit
those
draft
implementing
technical the power to:
standards to the Commission by 16 February 2014.
5. Power
is
conferred
on
the
Commission
to
adopt
the (a) request access to any document in any form, and to receive
implementing technical standards referred to in paragraph 3
or take a copy of it thereof;

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(b) require the manager of a qualifying social entrepreneurship
(b) markets, in breach of Article 6, the units and shares of a
fund to provide information without delay;
qualifying social entrepreneurship fund to non-eligible
investors;
(c) require information from any person related to the activities
(c) uses the designation ‘EuSEF’ but is not registered in
of the manager of a qualifying social entrepreneurship fund
accordance with Article 15;
or the qualifying social entrepreneurship fund;
(d) uses the designation ‘EuSEF’ for the marketing of funds
which are not established in accordance with point (b)(iii)
(d) carry out on-site inspections with or without prior
of Article 3(1);
announcement;
(e) has obtained registration through false statements or any
other irregular means in breach of Article 15;
(e) take appropriate measures to ensure that a manager of a
qualifying social entrepreneurship fund continues to comply
with this Regulation;
(f) fails to act honestly, fairly or with due skill, care or dili
gence, in conducting their business, in breach of point (a) of
Article 7;
(f) issue an order to ensure that a manager of a qualifying
social entrepreneurship fund complies with this Regulation
(g) fails to apply appropriate policies and procedures for
and desists from a repetition of any conduct that may
preventing malpractices, in breach of point (b) of Article 7;
consist of a breach of this Regulation.
(h) repeatedly fails to comply with the requirements under
Article 13 regarding the annual report;
Article 21
1. Member
States
shall
lay
down
the
rules
on
administrative
penalties and other measures applicable to breaches of the
(i) repeatedly fails to comply with the obligation to inform
provisions of this Regulation and shall take all measures
investors in accordance with Article 14.
necessary to ensure that they are implemented. The adminis
trative penalties and other measures provided for shall be
effective, proportionate and dissuasive.
2. In the cases referred to in paragraph 1, the competent
authority of the home Member State shall, as appropriate:
2. By
16
May
2015
the
Member
States
shall
notify
the
Commission and ESMA of the rules referred to in paragraph
(a) take measures to ensure that the manager of a qualifying
1. They shall notify the Commission and ESMA without delay
social entrepreneurship fund concerned complies with
of any subsequent amendment thereto.
Articles 5 and 6, points (a) and (b) of Article 7 and
Articles 13, 14 and 15;
Article 22
(b) prohibit the use of the designation ‘EuSEF’ and remove the
manager of a qualifying social entrepreneurship fund
1. The
competent
authority
of
the
home
Member
State
shall,
concerned from the register.
while respecting the principle of proportionality, take the appro
priate measures referred to in paragraph 2 where a manager of
a qualifying social entrepreneurship fund:
3. The
competent
authority
of
the
home
Member
State
shall
inform the competent authorities of the host Member States in
accordance with point (d) of Article 15(1) and ESMA, without
delay, of the removal of the manager of a qualifying social
(a) fails to comply with the requirements that apply to the
entrepreneurship fund from the register referred to in point
portfolio composition, in breach of Article 5;
(b) of paragraph 2 of this Article.

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L 115/36
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4. The
right
to
market
one
or
more
qualifying
social
entre
may refer the matter to ESMA, which may act in accordance
preneurship funds under the designation ‘EuSEF’ in the Union
with the powers conferred on it under Article 19 of Regulation
expires with immediate effect from the date of the decision of
(EU) No 1095/2010, in so far as the disagreement does not
the competent authority referred to in point (b) of paragraph 2.
relate to point (b)(i) or to point (d)(i) of Article 3(1) of this
Regulation.
Article 23
1. Competent
authorities
and
ESMA
shall
cooperate
with
CHAPTER IV
each other for the purpose of carrying out their respective
duties under this Regulation in accordance with Regulation
TRANSITIONAL AND FINAL PROVISIONS
(EU) No 1095/2010.
Article 26
1. The
power
to
adopt
delegated
acts
is
conferred
on
the
Commission subject to the conditions set out in this Article.
2. Competent
authorities
and
ESMA
shall
exchange
all
information and documentation necessary to carry out their
respective duties under this Regulation in accordance with
Regulation (EU) No 1095/2010, in particular to identify and
remedy breaches of this Regulation.
2. The
delegation
of
power
referred
to
in
Article
3(2),
Article 9(5), Article 10(2) and Article 14(4) shall be conferred
on the Commission for a period of four years from
15 May 2013. The Commission shall draw up a report in
respect of the delegation of powers not later than nine
Article 24
months before the end of the four year period. The delegation
of power shall be tacitly extended for periods of an identical
1. All persons who work or who have worked for the
duration, unless the European Parliament or the Council
competent authorities or for ESMA, as well as auditors and
opposes such extension not later than three months before
experts instructed by the competent authorities or by ESMA,
the end of each period.
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 indi
3. The
delegation
of
powers
referred
to
in
Article
3(2),
vidually identified, without prejudice to cases covered by
Article 9(5), Article 10(2) and Article 14(4) may be revoked
criminal law and proceedings under this Regulation.
at any time by the European Parliament or by the Council. A
decision to revoke shall put an end to the delegation of the
power specified in that decision. It shall take effect the day
following the publication of the decision in the Official Journal
of the European Union or at a later date specified therein. It shall
2. The
competent
authorities
of
the
Member
States
or
ESMA not affect the validity of any delegated acts already in force.
shall not be prevented from exchanging information in
accordance with this Regulation or other Union law applicable
to managers of qualifying social entrepreneurship funds and
qualifying social entrepreneurship funds.
4. As
soon
as
it
adopts
a
delegated
act,
the
Commission
shall
notify it simultaneously to the European Parliament and to the
Council.
3. Where
competent
authorities
or
ESMA
receive
confidential
information in accordance with paragraph 2, they may use it
only in the course of their duties and for the purpose of admin
istrative and judicial proceedings.
5. A
delegated
act
adopted
pursuant
to
Article
3(2),
Article 9(5), Article 10(2) or Article 14(4) shall enter into
force only if no objection has been expressed either by the
Article 25
European Parliament or the Council within a period of three
months of notification of that act to the European Parliament
In the event of disagreement between competent authorities of
and the Council or if, before the expiry of that period, the
Member States on an assessment, action or omission of one
European Parliament and the Council have both informed the
competent authority in areas where this Regulation requires
Commission that they will not object. That period shall be
cooperation or coordination between competent authorities
extended by three months at the initiative of the European
from more than one Member State, competent authorities
Parliament or the Council.

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Article 27
(i) the possibility of extending the marketing of qualifying
social entrepreneurship funds to retail investors;
1. The Commission shall review this Regulation in
accordance with paragraph 2. The review shall include a
general survey of the functioning of the rules in this Regulation
and the experience acquired in applying them, including:
(j) the appropriateness of including qualifying social entrepre
neurship funds within eligible assets under Directive
2009/65/EC;
(a) the extent to which the designation ‘EuSEF’ has been used
by managers of qualifying social entrepreneurship funds in
different Member States, whether domestically or on a
cross-border basis;
(k) the appropriateness of complementing this Regulation with
a depositary regime;
(b) the geographical and sectoral distribution of investments
undertaken by qualifying social entrepreneurship funds;
(l) an examination
of possible tax obstacles
for social
entre
preneurship funds and an assessment of possible tax
incentives aimed at encouraging social entrepreneurship
in the Union;
(c) the appropriateness of the information requirements under
Article 14, in particular whether they are sufficient to
enable investors to take an informed investment decision;
(m) an evaluation of any barriers that may have impeded
investment into funds using the designation ‘EuSEF’,
including the impact on institutional investors of other
Union law of a prudential nature.
(d) the use of the different qualifying investments by qualifying
social entrepreneurship funds and what impact this has had
on the development of social undertakings across the
Union;
2. The
review
referred
to
in
paragraph
1
shall
be
conducted:
(e) the appropriateness of establishing a European label for
‘social enterprises’;
(a) by 22 July 2017 as regards points (a) to (e) and (g) to (m);
and
(f) the possibility of allowing social entrepreneurship funds
established in a third country to use the designation
(b) by 22 July 2015 as regards point (f).
‘EuSEF’, taking into account experience in applying the
Commission Recommendation regarding measures
intended to encourage third countries to apply minimum
standards of good governance in tax matters;
3. Following
the
review
referred
to
in
paragraph
1,
and
after
consulting ESMA, the Commission shall submit a report to the
European Parliament and to the Council, accompanied, if appro
priate, by a legislative proposal.
(g) the practical application of the criteria for identifying qual
ifying portfolio undertakings, the impact of this on the
development of social undertakings across the Union and
their positive social impact;
Article 28
1. By
22
July
2017,
the
Commission
shall
start
a
review
of
the interaction between this Regulation and other rules on
collective investment undertakings and their managers, in
(h) an analysis of the procedures implemented by managers of
particular those laid down in Directive 2011/61/EU. That
qualifying social entrepreneurship funds so as to measure
review shall address the scope of this Regulation. It shall
the positive social impact generated by the qualifying
gather data for assessing whether it is necessary to extend the
portfolio undertakings referred to in Article 10 and an
scope to allow for managers of social entrepreneurship funds
assessment of the feasibility of introducing harmonised
with assets under management that in total exceed the threshold
standards for measuring the social impact at Union level
provided for in Article 2(1) to become managers of qualifying
in a manner consistent with Union social policy;
social entrepreneurship fund in accordance with this Regulation.

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L 115/38
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2. Following the review referred to in paragraph 1, and after consulting ESMA, the Commission shall
submit a report to the European Parliament and to the Council, accompanied, if appropriate, by a legislative
proposal.
Article 29
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.
This Regulation shall be binding in its entirety and directly applicable in all Member States.
Done at Strasbourg, 17 April 2013.
For the European Parliament
For the Council
The President
The President
M. SCHULZ
L. CREIGHTON

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