The European Social Entrepreneurship Funds (EuSEF) Regulation

The following Financial Services practice note provides comprehensive and up to date legal information covering:

  • The European Social Entrepreneurship Funds (EuSEF) Regulation
  • The EuSEF regulatory framework
  • Objectives and scope of the EuSEF Regulation
  • The EuSEF marketing passport
  • Criteria for a fund to be designated as a EuSEF
  • Registering as a EuSEF manager and registering a EuSEF with the FCA
  • Notification of material changes
  • Qualifying portfolio undertakings—eligible social enterprises
  • Managing a EuSEF
  • Measurement of positive social impact
  • More...

The European Social Entrepreneurship Funds (EuSEF) Regulation

The EuSEF regulatory framework

This Practice Note provides an overview of the European Social Entrepreneurship Funds Regulation (EU) 346/2013 (the EuSEF Regulation) as amended by Regulation (EU) 2017/1991. The EuSEF Regulation is a specialist alternative investment fund (AIF) regime available to alternative investment fund managers (AIFMs) under the Alternative Investment Fund Managers Directive (2011/61/EU) (AIFMD). AIFMs managing qualifying social entrepreneurship funds can elect to use the ‘EuSEF’ designation for these funds to market them to professional, and certain high net-worth, investors throughout the EU under the EuSEF marketing passport.

The EuSEF Regulation was introduced alongside Regulation (EU) 345/2013 on European venture capital funds (EuVECA Regulation). The EuVECA Regulation, as amended, is beyond the scope of this Practice Note, but is covered in Practice Note: European Venture Capital Funds (EuVECA) Regulation.

On 1 March 2018, Regulation (EU) 2017/1991 amending the EuVECA Regulation and the EuSEF Regulation (the Amending Regulation) took effect. The changes set out in the Amending Regulation were (among other things) intended to increase the uptake of the elective EuSEF regime, for example by extending the range of managers eligible to market and manage EuSEFs to include AIFMs authorised under Article 6 of the AIFMD, whose assets under management (AUM) exceed €500m (full-scope AIFMs). The relevant de minimis threshold is set out in Article 3(2)(b) of the AIFMD. Further changes introduced

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