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;

they are established in the Union;

they are subject to registration with the competent authorities of their home Member State in accordance with point (a) of Article 3(3) of Directive 2011/61/EU; and

they manage portfolios of qualifying social entrepreneurship funds.

‘collective investment undertaking’ means an AIF as defined in point (a) of Article 4(1) of Directive 2011/61/EU;

‘qualifying social entrepreneurship fund’ means a collective investment undertaking that:

‘manager of a qualifying social entrepreneurship fund’ means a legal person the regular business of which is managing at least one qualifying social entrepreneurship fund;

‘qualifying portfolio undertaking’ means an undertaking that:

▼M1

▼B

‘qualifying investments’ means any of the following instruments:

‘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 entrepreneurship fund and the investors therein;

‘equity’ means ownership interest in an undertaking, represented by the shares or other forms of participation in the capital of the qualifying portfolio undertaking issued to its investors;

‘quasi-equity’ means any type of financing instrument which is a combination of equity and debt, where the return on the instrument is linked to the profit or loss of the qualifying portfolio undertaking and where the repayment of the instrument in the event of default is not fully secured;

‘marketing’ means a direct or indirect offering or placement at the initiative of the manager of a qualifying social entrepreneurship 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;

‘committed capital’ means any commitment pursuant to which an investor is obliged, within the time frame laid down in the rules or instruments of incorporation of the qualifying social entrepreneurship fund, to acquire an interest in, or to make capital contributions to, that fund;

‘home Member State’ means the Member State in which the manager of a qualifying social entrepreneurship fund has its registered office;

‘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;

‘competent authority’ means:

‘competent authority of the host Member State’ means the authority of a Member State, other than the home Member State, in which the qualifying social entrepreneurship fund is marketed;

‘pre-marketing’ means provision of information or communication, direct or indirect, on investment strategies or investment ideas by a manager of a qualifying social entrepreneurship fund, or on its behalf, to potential investors domiciled or with a registered office in the Union in order to test their interest in a qualifying social entrepreneurship fund which is not yet established, or in a qualifying social entrepreneurship fund which is established, but not yet notified for marketing in accordance with Article 16, in that Member State where the potential investors are domiciled or have their registered office, and which in each case does not amount to an offer or placement to the potential investor to invest in the units or shares of that qualifying social entrepreneurship fund.

is sufficient to allow investors to commit to acquiring units or shares of a particular qualifying social entrepreneurship fund;

amounts to subscription forms or similar documents whether in a draft or a final form; or

amounts to constitutional documents, a prospectus or offering documents of a not-yet-established qualifying social entrepreneurship fund in a final form.

commit to invest a minimum of EUR 100 000 ; and

state in writing, in a separate document from the contract that is concluded for the commitment to invest, that they are aware of the risks associated with the envisaged commitment.

managers of qualifying social entrepreneurship funds, persons who effectively conduct the business of those managers, employees of, or any person who directly or indirectly controls or is controlled by, those managers, and the qualifying social entrepreneurship fund managed by those managers, or the investors therein;

a qualifying social entrepreneurship fund or the investors therein, and another qualifying social entrepreneurship fund managed by the same manager, or the investors therein;

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.

the types of conflicts of interest referred to in paragraph 2 of this Article;

the steps that managers of a qualifying social entrepreneurship fund must take, in terms of structures and organisational and administrative procedures, in order to identify, prevent, manage, monitor and disclose conflicts of interest.

employment and labour markets;

standards and rights related to job quality;

social inclusion and protection of particular groups;

equal treatment, equal opportunities and non-discrimination;

public health and safety;

access to and effects on social protection and on health and educational systems.

details, as appropriate, of the overall social outcomes achieved by the investment policy and the method used to measure those outcomes;

a statement of any divestments in relation to qualifying portfolio undertakings that have occurred;

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 point (f) of Article 14(1);

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 (l) of Article 14(1);

information on the nature, value and purpose of the investments other than qualifying investments referred to in Article 5(1);

a description of how environmental and climate-related risks are taken into account in the investment approach of the qualifying social entrepreneurship funds.

the identity of that manager and of any other service providers contracted by that manager in relation to their management, and a description of their duties;

the amount of own funds available to that manager for maintaining the adequate human and technical resources necessary for the proper management of its qualifying social entrepreneurship funds;

a description of the investment strategy and objectives of the qualifying social entrepreneurship fund, including:

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;

the methodologies to be used to measure social impacts;

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 cash equivalents;

a description of the risk profile of the qualifying social entrepreneurship fund and any risks associated with the assets in which the fund may invest or the investment techniques that may be employed;

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 qualifying portfolio undertakings;

a description of how the remuneration of the manager of a qualifying social entrepreneurship fund is calculated;

a description of all relevant costs and of the maximum amounts thereof;

where available, the historical financial performance of the qualifying social entrepreneurship fund;

the business support services and the other support activities the manager of a qualifying social entrepreneurship fund is providing or arranging through third parties in order to facilitate the development, growth or in some other respect the ongoing operations of the qualifying portfolio undertakings in which the qualifying social entrepreneurship fund invests, or, where these services or activities are not provided, an explanation of that fact;

a description of the procedures by which the qualifying social entrepreneurship fund may change its investment strategy or investment policy, or both.

the content of the information referred to in points (c) to (f) and (l) of paragraph 1 of this Article;

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.

the identity of the persons who effectively conduct the business of managing qualifying social entrepreneurship funds;

the identity of the qualifying social entrepreneurship funds, the units or shares of which are to be marketed and their investment strategies;

information on the arrangements made for complying with the requirements of Chapter II;

a list of Member States where the manager of a qualifying social entrepreneurship fund intends to market each qualifying social entrepreneurship fund.

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;

the information required referred to in paragraph 1 is complete;

the arrangements notified according to in point (c) of paragraph 1 are suitable for complying with the requirements of Chapter II.

the rules or instruments of incorporation of the qualifying social entrepreneurship fund;

information on the identity of the depositary;

the information referred to in Article 15(1);

a list of Member States in which the managers referred to in paragraph 1 have established, or intend to establish, qualifying social entrepreneurship funds.

fails to comply with the requirements that apply to the portfolio composition, in breach of Article 5;

markets, in breach of Article 6, the units and shares of a qualifying social entrepreneurship fund to non-eligible investors;

uses the designation ‘EuSEF’ but is not registered in accordance with Article 15, or the qualifying social entrepreneurship fund is not registered in accordance with Article 15a;

uses the designation ‘EuSEF’ for the marketing of funds which are not established in accordance with point (b)(iii) of Article 3(1);

has obtained registration through false statements or any other irregular means, in breach of Article 15 or Article 15a;

fails to act honestly, fairly or with due skill, care or diligence, in conducting their business, in breach of point (a) of Article 7;

fails to apply appropriate policies and procedures for preventing malpractices, in breach of point (b) of Article 7;

repeatedly fails to comply with the requirements under Article 13 regarding the annual report;

repeatedly fails to comply with the obligation to inform investors in accordance with Article 14.

take measures to ensure that the manager of a qualifying social entrepreneurship fund concerned complies with Articles 5 and 6, points (a) and (b) of Article 7, and Articles 13 to 15a, as applicable;

prohibit the manager of the qualifying social entrepreneurship fund concerned from using the designation ‘EuSEF’ and remove that manager, or the qualifying social entrepreneurship fund concerned, from the register.

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;

the geographical and sectoral distribution of investments undertaken by qualifying social entrepreneurship funds;

the appropriateness of the information requirements under Article 14, in particular whether they are sufficient to enable investors to take an informed investment decision;

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;

the appropriateness of establishing a European label for ‘social enterprises’;

the possibility of allowing social entrepreneurship funds established in a third country to use the designation ‘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;

the practical application of the criteria for identifying qualifying portfolio undertakings, the impact of this on the development of social undertakings across the Union and their positive social impact;

an analysis of the procedures implemented by managers of qualifying social entrepreneurship funds so as to measure the positive social impact generated by the qualifying portfolio undertakings referred to in Article 10 and an assessment of the feasibility of introducing harmonised standards for measuring the social impact at Union level in a manner consistent with Union social policy;

the possibility of extending the marketing of qualifying social entrepreneurship funds to retail investors;

the appropriateness of including qualifying social entrepreneurship funds within eligible assets under Directive 2009/65/EC;

the appropriateness of complementing this Regulation with a depositary regime;

an examination of possible tax obstacles for social entrepreneurship funds and an assessment of possible tax incentives aimed at encouraging social entrepreneurship in the Union;

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.

by ►M1  2 March 2022 ◄ as regards points (a) to (e) and (g) to (m); and

by 22 July 2015 as regards point (f).

the management of qualifying social entrepreneurship funds and the appropriateness of introducing changes to the legal framework including the option of a management passport; and

the suitability of the definition of marketing for qualifying social entrepreneurship funds and the impact that that definition and differing national interpretations thereof have on the operation and viability of qualifying social entrepreneurship funds and on the cross-border distribution of such funds.