A Commission Delegated Regulation on conflicts of interest arising in relation to European social entrepreneurship funds has been published in the Official Journal of the European Union. The Delegated Regulation sets out the parameters for conflicts of interest policies, which must be introduced by "social entrepreneurship" funds within scope of the European Social Entrepreneurship Fund Regulation. The Delegated Regulation will enter into force on June 11, 2019 and will become directly applicable in all EU Member States on December 11, 2019.

The Social Entrepreneurship Regulation governs qualifying social entrepreneurship funds, which broadly covers funds which invest in portfolio companies that act as drivers of social change. Its provisions include requirements imposed on managers of qualifying social entrepreneurship funds to identify and avoid conflicts of interest that may arise in the course of their work. The newly published Delegated Regulation specifies the relevant types of conflicts of interest that may arise, including the making of a financial gain or avoidance of a financial loss at the expense of the fund, managers' interests in services provided to or transactions entered into with a fund that are distinct from the interests of the fund itself and the receipt of fees, commissions or non-monetary benefits that fall outside defined parameters. The Delegated Regulation also sets out requirements around the conflicts of interest policy to be put in place by the managers of such funds, as well as the minimum measures required to prevent such conflicts arising and how to manage the consequences if a conflict does arise. Provisions governing the way such funds measure, and provide information relating to, the positive social impact of their portfolio companies are also set out.

View the Delegated Regulation.

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