EU Publishes Regulation on European Venture Capital Funds
On March 25, the EU's Official Journal published the regulation on European venture capital funds (VCFs), which will become applicable throughout the EU on July 22, 2013.
The purpose of the regulation is to make it easier for venture capitalists to raise funds across Europe. Supplementing the AIFMD regime, it creates a special "European VCF" designation for qualifying VCF funds, which will enable them to be marketed under that label across the EU, sidestepping member states' national offering and marketing rules. It is hoped the designation will also act as a quality brandmark.
To be a "qualifying VCF," a fund must invest a minimum of 70% of its aggregate capital contributions and uncalled committed capital in SME equity or quasi-equity instruments and fulfill various conditions and obligations relating to its structure, investor base and management. Regulation.
European Parliament Committee Scales Back Accountancy Reform
On April 25, the legal affairs committee of the European Parliament toned down plans to reform the European auditing market in a move which will provide some relief to the "Big Four" auditors who would have been most affected.
The committee rejected the original draft bill from the European Commission, which called for compulsory audit firm rotation every six years, and suggested instead that the rotation should take place every 25 years. The committee also rejected the Commission's proposal of caps on auditor market share, which could have split up the "Big Four."
The reforms, which were initiated after the perceived failure of the auditors in recognizing the risks building up in banks before the financial crisis, will now be negotiated between member states before adoption by the full European Parliament. Press Release.
UK Serious Fraud Office Launches Criminal Investigation into FTSE 100 Kazakh Miner ENRC
On April 25, the Serious Fraud Office (SFO) announced that it has opened a formal criminal investigation into London-listed ENRC, following allegations of fraud, bribery and corruption surrounding its assets in Kazakhstan and Africa.
The probe will come as no surprise to many as it follows recent claims by a whistleblower, which led to the suspension of a manager in Mozambique and the initiation of an internal investigation led by a law firm. The SFO had already made a formal demand for documents from that law firm, meaning that they had reasonable grounds to suspect an offense involving serious or complex fraud or corruption. Announcement.