BVCA Response to Gauzes Report
The British Private Equity and Venture Capital…
3 December 2009
Gauzès Report
The anticipated report on the Directive by the EU's Economic & Monetary Affairs Committee (ECON) - the main committee in the European Parliament focusing on the Directive - became available at the end of last week and was discussed by the Committee on 1 December.
The Gauzès Report (so named after ECON's appointed rapporteur, Jean-Paul Gauzès MEP) recommends further amendments to the proposed Directive. These revisions have both positive and negative effects on the private equity industry and the BVCA was quick to respond critically to the whole report. The most significant amendment was the deletion of exemption thresholds, bringing all firms with less than €500m funds under management within scope. Overall, the BVCA agrees with the report that the Directive is "poorly constructed, ill-focused and premature" but would like to see a rewrite of the legislation with more consultative input from the various bodies affected.
The area of key concern and up for most debate remains around the 3rd Country requirements and marketing. The Gauzès Report supports the idea of a "European Passport" that will allow fund managers operating in the EU and funds located in the EU to market funds throughout Europe, provided that EU Member States other than their own are notified of this fact. The Report does not however go far enough to satisfy the BVCA; in order for non-EU fund managers to market and raise funds from EU-based investors, they remain subject to strict regulation with investment available only via private placement regimes.
The Gauzès Report is available to view here.
Swedish Presidency Amendments
Almost simultaneous to the publication of the Gauzès Report, the Swedish Presidency made public its revisions to the Directive - further to those they announced on Thursday 12 November (outlined in our Update #3). This second round of revisions follows pressure from the French and German governments who consider the initial amendments did not go far enough to curb private equity activity.
BVCA Activity
In the run up to 2010 and beyond, the BVCA Executive and Committees are maintaining, and in some cases increasing, pressure on key influencers as revisions and amendments continue to be published regularly.
The BVCA was present yesterday (Wednesday 2 December) in Brussels to represent the interests of members after the first Committee discussion of the Gauzès Report in the European Parliament. In December, Simon Walker will meet again with the Public Affairs Executive; BVCA management will meet with EVCA to coordinate the two associations' activities; and within the next two weeks, Committee members will meet with Syed Kamall MEP on the specific issue of 3rd country and marketing.
EU AIFM Estimated Timetable
Economic and Monetary Affairs Committee MEPs have until 21 January 2010 to table amendments. Amendments are likely to be debated in committee on 22 February and put to a committee vote on 12 April. The plenary vote is still scheduled for July.
