Banking Law Developments

By virtue of a bill which has been introduced in Parliament awaiting endorsement changes are effected in the legislation regulating venture capital companies, mutual guarantee companies, factoring and leasing.

Venture capital

Until now venture capital companies used to finance the development of existing enterprises with a consideration of minority participation in their share capital or bonds convertible into shares upon the expiry of the agreed period of time (Article 1, paragraphs 1,2 of L.1775/1988). Under the proposed legislation a venture capital company is permitted to invest 20% of its own funds as a maximum in one only enterprise, thereby reducing the risk and eliminating cases of favouritism vis-a-vis connected companies. Moreover, the shareholders of venture capital companies are not permitted to own more than 30% of the share capital of the company in question, excluding cases where the shareholder is a credit institution. Finally, in the determination of the net