A brief history of EuVECA

Originally established to foster a more integrated market, the EuVECA Regulation introduced a crucial EU marketing passport. This passport was designed to allow fund managers to market their funds not only to EU professional investors but also to sophisticated EU investors (who meet certain requirements) across borders without the need for complex, state-by-state compliance hurdles. The goal was clear: unlock capital for small and medium-sized enterprises (SMEs) and facilitate cross-border fundraising.

By revisiting the regulation for a third time, the European Commission acknowledges that while progress has been made, further refinement is necessary to fully realise the potential of a single market for venture capital.

The Scope of the review

The EuVECA Regulation will be reviewed to streamline operations and reduce regulatory burdens, with potential broader policy initiatives beyond the EuVECA framework. To ensure a robust and comprehensive review, the European Commission has launched two distinct consultation processes:

• Targeted consultation: This stream is designed for industry experts. It seeks detailed technical feedback from fund managers, institutional investors, businesses, public authorities, and supervisors.
• Public consultation: Recognising the broader societal impact of financial regulation, this channel invites contributions from the general public and other interested parties.

This dual approach ensures that the review benefits from both granular, technical expertise and broader stakeholder perspectives.

Focus areas:

• Simplifying compliance for small-size AIF managers (assets under €500 million).
• Proportional adjustments for mid-sized AIFMs to reduce administrative burdens.
• Enhancing the EuVECA and European Social Entrepreneurship Funds (EuSEF) frameworks to better support fund managers and align with EU policy objectives.

Challenges identified

• High operating costs for fund managers due to compliance, reporting, and administrative requirements.
• Limited scalability for small-size AIF managers due to the lack of cross-border management and marketing passports.
• Regulatory thresholds under the AIFMD (Alternative Investment Fund Managers Directive) that may not reflect current market realities.

Proposed solutions

• Introducing more proportionate regulatory approaches to support fund managers' growth while maintaining investor protection and market integrity.
• Harmonising national registration procedures and reducing regulatory fragmentation.
• Expanding the scope of eligible investments under the EuVECA framework to include broader asset classes and investment strategies.

Strategic alignment

This review is strategically aligned with the European Commission’s broader policy objectives under the Savings and Investments Union and the Startup and Scaleup Strategy. The primary objective is to improve access to finance for innovative companies within the EU.

Venture and growth capital funds are essential vehicles for financing the economy, supporting companies from their nascent stages through to significant growth phases. By smoothing the regulatory path for these funds, the European Commission aims to create a more dynamic and integrated European market.

Next steps and deadlines

For stakeholders operating in the venture capital and private equity sectors, this is an important window for engagement. The feedback gathered will directly shape the European Commission’s policy work, influencing the legislative landscape for years to come.

Both the targeted and public consultations are open until 12 March 2026.

The European Commission plans to adopt the review of the EuVECA Regulation in the third quarter of 2026. Furthermore, there is consideration for a broader policy initiative that may extend beyond the current EuVECA framework to cover a wider range of venture and growth capital fund managers.

Conclusion

The European Commission’s decision to review the EuVECA Regulation for a third time underscores the importance of an agile regulatory environment. The reform aims to strengthen the EU's global competitiveness, support innovative companies, and mobilise private capital for strategic priorities like digital and green transitions, such as digital transformation and green energy initiatives.

Stakeholders are encouraged to provide evidence-based feedback to shape the policy framework effectively.

For more details, the press release can be found here and the consultation here and here