L 263/28 Official Journal of the European Communities 3.10.2001 (Acts whose publication is not obligatory) COMMISSION COMMISSION DECISION of 6 June 2001 on the aid scheme Regional Venture Capital Funds (notified under document number C(2001) 1547) (Only the English text is authentic) (Text with EEA relevance) (2001/712/EC) THE COMMISSION OF THE EUROPEAN COMMUNITIES, Having regard to the Treaty establishing the European Community, and in particular the first subparagraph of Article 88(2) thereof, Having regard to the Agreement on the European Economic Area, and in particular Article 62(1)(a) thereof, Having called on interested parties to submit their comments pursuant to those provisions (), and having regard to their comments, Whereas: 1. PROCEDURE (1) By letter dated 26 May 2000, registered on 7 June 2000, the United Kingdom notified the Commission of the scheme ‘Regional Venture Capital Funds’. It provided the Commission with further information by letter dated 21 August 2000, registered on 24 August 2000. By letter dated 7 November 2000, the Commission informed the United Kingdom that it had decided to initiate the procedure laid down in Article 88(2) of the EC Treaty in respect of the scheme. The United Kingdom authorities answered by letter dated 29 November 2000, registered on 1 December 2000. The Commission decision to initiate the procedure was published in the Official Journal of the European Communi- ties (). The Commission called on interested parties to submit their comments. () O] C 27, 27.1.2001, p. 20. () See footnote 1. (4) The Commission received comments from interested parties. It forwarded them to the United Kingdom, which was given the opportunity to react; its comments were received by letters dated 23 March 2001, registered on 26 March 2001, and 2 May 2001, registered the same day. 2. DETAILED DESCRIPTION OF THE SCHEME The purpose of the scheme is to address a lack of provision of equity funding at regional level for invest- ment in the ‘equity gap’ range of GBP 100 000 to GBP 500 000 (about EUR 160 640 to EUR 800 000) for small and medium-sized enterprises (SMEs). According to the United Kingdom authorities, the exis- tence of this ‘equity gap’ is due to the relatively high fixed costs for the remuneration of investment execu- tives. This cost and the direct costs for due diligence and legal documentation do not fall proportionately with smaller sizes of investment and may rise. Consequently, there is an incentive for venture capital firms to pursue larger investments in more mature companies, so that costs can be reduced relative to investment value, enhancing returns and lowering management charges to investors. Investors therefore seek to identify invest- ments where growth is likely to be so exceptional that the capital gain more than compensates for the very high early costs. Consequently, the United Kingdom authorities claim, private investors demonstrate a reluc- tance to invest in businesses that need equity-based financing in amounts below GBP 500 000 (about EUR 800 000) and are not in leading-edge technology sectors. It has also proved more difficult for SMEs far from London to obtain risk capital, which explains the regional approach.