Deutscher Industrie- und Handelskammertag

Transcription

1 Deutscher Industrie- und Handelskammertag 3 Public consultation on A new European regime for Venture Capital Deutscher Industrie- und Handelskammertag e. V. (DIHK) / Association of German Chambers of Industry and Commerce ID number (Interest Representative Register): Breite Straße 29 D Berlin Representation to the EU Avenue des Arts 19 A-D B 1000 Brussels The Association of German Chambers of Industry and Commerce (DIHK) is the umbrella organisation of 80 Chambers. All companies registered in Germany, with the exception of handicraft businesses, the liberal professions and farms, are required by law to join a Chamber. Thus, the DIHK speaks for more than 3.6 million enterprises. They include not only big companies but also retailers and innkeepers. It does not represent any specific corporate group but all commercial enterprises in Germany. Ansprechpartner / contact persons: Alexandra Böhne, boehne.alexandra@dihk.de, Dr. Michael Liecke, liecke.michael@dihk.de, Generally the DIHK supports the effort of the EU Commission to ease cross-border venture capital investments. Venture capital is an important funding channel for emerging and innovative enterprises. However, funds that are already investing in small and medium sized companies should also be included in the discussion as investment financing is an important way of financing for them as well. Therefore, the suggestion of the EU Commission should be expanded. Otherwise, at least economic reasons should be given as to why venture capital funds are being preferred

2 A regulatory approach for managers of smaller funds below the AIFMD would provide transparency and security for funds, managers, investors and companies. A EU pass should not be mandatory for managers of smaller funds. Regulatory requirements could be too demanding for smaller funds, especially for those funds that only act nationally and not internationally. Furthermore it should be considered that venture capital funds are not relevant for the stability of financial markets and are shaped by professional investors. Overregulation should therefore be avoided. Comments to consultation questions: Box 1 a) Do you think that encouraging Member States to a process of mutual recognition of venture capital funds, based on the direct enforcement of the Treaty freedoms, could facilitate the cross-border activity of these funds? b) Do you believe that the main impediment preventing cross-border venture capital fundraising and investments is the absence of a passport for activities under the AIFMD thresholds; or the fact that the AIFMD is not tailored to venture capital in general? c) Is a targeted modification of AIFMD rules for venture capital or a standalone initiative in this area the more appropriate tool to increase venture capital activities? Please specify. d) From your experience, could you provide concrete examples where you encounter additional administrative or regulatory hurdles when raising or investing funds across the EU? e) Do you believe that an initiative on cross-border operations of venture capital could contribute to eliminating the cross-border tax problems encountered and if so, how? f) How could a possible passport for venture capital operators facilitate targeted tax incentives in favour of cross-border venture capital investments? b) Referring to the AIFMD is not appropriate as it was only recently adopted by the European Council and the European Parliament, but has not been translated into national laws yet

3 c) AIFMD is not tailored to venture capital funds. Nevertheless we see venture capital as alternative investment. Since the AIFMD is very complex, a stand-alone framework might be better than including venture capital funds below EUR 500 million in the AIFMD. This way venture capital funds below the AIFMD could benefit from the European passport, but with regard to the AIFMD regulations. In this case it has to examinded whether a reduced AIFMDregulation for venture capital funds that lie below the threshold could be applied to venture capital funds. Should a stand-alone regulation of venture capital funds lead to fewer requirements for these funds, this option should be preferred. The set of rules and regulations for managers of alternative investment funds has already been agreed on and has to be adopted by Therefore we suggest to include venture capital funds in these regulations. e) Yes. Box 2 would you suggest? Could you then briefly outline the pros and cons of such an alternative? b) Do you consider such a voluntary regime to have any major cost implications for the key stakeholders? (Investors, competent authorities, venture capital business). Please specify. c) Based on your experience, could you provide qualitative and/or quantitative assessment of potential cost savings that the European 'Passport' would bring about? d) What information should the manager provide to the competent authority? e) What option would you favour: registration with the national authority or with ESMA? Alternatively, ESMA could hold a European register of venture capital managers and funds with the information provided by national authorities. Would you favour this solution? b) This would at least result in transactions costs between fund manager and administration. Additionally administrative costs could occur if the authorities were to maintain the register. On the other side, the AIFMD passport could become a quality trademark and provide transparency which could reduce transaction costs for possible investors (e.g. market monitoring, fund selection) c) q.v. b) - 3 -

4 e) The registration should be operated by national authorities to guarantee an efficient workflow (this is in line with the subsidiarity principle). We support an aggregated register at the ESMA to facilitate the exchange of information between national authorities. Box 3 would you suggest? b) What should be the content and timeframe of the notification? Should the notification cover both, the places where the manager intends to invest in SMEs and the places where it intends to raise funds? c) Do you consider such a procedure to have any major cost implications for the key stakeholders? (Investors, competent authorities, venture capital business). Please specify. c) The collection, handling and information circulation is in line with the costs for the administration and venture capital funds. On the other side, the primary registration of investors supports market transparency. Box 4 a) Do you agree with this approach? If not, and in case you believe venture capital should be accessible to retail investors, what kind of measures would you recommend to ensure their protection? b) What are the restrictions (if any) on participation of retail investors in your country within the fund structures used for venture capital investments? a) Generally yes. Nevertheless retail investors should not be completely excluded from the venture capital market. But this must not lead to considerably higher regulatory standards for venture capital funds

5 Box 5 would you suggest? b) Do you agree with the need to require an annual report for each fund? c) Do you agree that the annual report should reflect the annual financial accounts and a report of the activities of the financial year? d) Do you agree with the obligation to audit the financial information of the annual report? e) What reporting requirements/obligations exist within the fund structures used in your country for the purpose of venture capital investments? Would you consider that the proposed information requirements would constitute a significant administrative burden? Please specify. f) Do you think that more information requirements should be imposed on venture capital managers? If so, please specify b) Yes. c) Yes. d) Yes. Box 7 would you suggest? b) Is it convenient to specify in the legislative proposal the legal forms that the venture capital funds might adopt? c) Is there any other aspect relating to the legal form of the venture capital entities that the proposal should take into account? b) We do not see any advantage of this specification neither for investors or funds nor for the supervision authority

6 Box 8 a) What, if any, investment criteria determine your existing national fund structures used for purposes of venture capital investments? b) Do you think it is worth specifying any investment rules for venture capital funds? If yes: c) Do you think there is a need to define a compulsory investment percentage of assets that the venture capital fund should invest in SMEs? If yes, what compulsory investment percentage would you propose and how should it be calculated? d) Do you agree with the need to envisage a flexible application of the principle described? b) Venture capital funds should be venture capital funds. Nevertheless we propose a high flexibility. In particular it should be considered whether funds that invest in established companies should be included. Investing financing in established companies enables to finance internationalization or expansion plans and that way generates growth, maintains and provides jobs. Generally the aim should be to promote the financing of SMEs. In line with that a general clause should be complemented. However, the combination with a quota is difficult. d) Yes. Box 9 a) How do your national rules capture (if at all) the definition of venture capital funds? b) Should the temporary nature of the venture capital investment activity in SMEs constitute a criterion that should be reflected? c) Do you think it should be specified any temporal limit (minimum and maximum) to the participation of the venture capital fund in the capital of the SME (i.e., from at least 2 to 10 years)? d) Are there any other means of finance that venture capital funds provide to SMEs that should be reflected (e.g. loans)? e) Do you think that there is a need to specify that the manager should be actively involved in the development, growth and success of the SME? Or should the passive investment in an SME also be considered by the proposal as venture capital investment? f) What other criteria would you consider appropriate to capture the venture capital activity? b) Yes, but flexible

7 c) Yes, but exceptions should be possible without high bureaucratic burdens. Because of changed market conditions (e.g. the current financial crisis) such limits should be flexible as it might be better for companies if the investors remain with the companies. d) Providing outside capital through classical venture capital funds should be seen critically. Venture capital corporations have to be subject to extensive regulatory requirements analogous to the regulation of banks. Otherwise competitive distortion might be the result. e) Both are venture capital investments and should therefore not be differentiated. Box 10 a) To what extent does your national regime capture the above definitions of typical venture capital strategies? b) Do you agree that the special rules on venture capital should only apply when funds invest in the seed, start-up and expansion stages of SMEs? If not, do you believe that SMEs in a restructuring phase should also benefit from venture capital? What other alternative approaches would you suggest? c) Would you propose other definitions to define the permitted portfolio of venture capital funds? d) Do you agree that venture capital funds do not/should not use leverage? b) In general venture capital as part of equity financing should be concentrated on the early stages of business development. Nevertheless, exceptions for distressed companies offer market opportunities and chances to consolidate enterprises