### where it is aware of any violation of obligations established by union legislation in the field of social and labour law or environmental law or of the international social and environmental law provisions listed in annex xi . compliance with union legislation or with international provisions also includes compliance in an equivalent manner . ### where it is aware of any violation of obligations established by union legislation or national laws , regulations and other binding provisions in the field of social and labour law or environmental law or of the international social and environmental law provisions listed in annex xi . compliance with union legislation or with international provisions also includes compliance in an equivalent manner .


### where the economic operator has shown significant or persistent deficiencies in the performance of any substantive requirement under a prior contract or contracts of a similar nature with the same contracting authority . ### where the economic operator has shown significant or persistent deficiencies in the performance of any substantive requirement under a prior contract or contracts of a similar nature .


### the most economically advantageous tender referred to in point of paragraph 1 from the point of view of the contracting authority shall be identified on the basis of criteria linked to the subject - matter of the public contract in question . those criteria shall include , in addition to the price or costs referred to in point of paragraph 1 , other criteria linked to the subject - matter of the public contract in question , such as : ### the most economically , socially and environmentally advantageous tender referred to in point of paragraph 1 from the point of view of the contracting authority shall be identified on the basis of criteria linked to the subject - matter of the public contract in question . those criteria shall include , in addition to the price or costs referred to in point of paragraph 1 , other criteria linked to the subject - matter or the production of the subject - matter of the public contract in question , such as :


### for service contracts and contracts involving the design of works , the organisation , qualification and experience of the staff assigned to performing the contract in question may be taken into consideration , with the consequence that , following the award of the contract , such staff may only be replaced with the consent of the contracting authority , which must verify that replacements ensure equivalent organisation and quality ; ### for service contracts and contracts involving the design of works , the organisation , qualification and experience of the staff assigned to performing the contract in question as well as the capacities , abilities and professional conduct of any subcontractor may be taken into consideration , with the consequence that , following the award of the contract , such staff may only be replaced and further subcontracting will only be permitted with the consent of the contracting authority , which must verify that replacements or further subcontracting ensure equivalent organisation and quality ;


### the price or cost charged is more than 50 % lower than the average price or costs of the remaining tenders ### the price or cost charged is more than 25 % lower than the average price or costs of the remaining tenders


### the price or cost charged is more than 20 % lower than the price or costs of the second lowest tender ; ### the price or cost charged is more than 10 % lower than the price or costs of the second lowest tender ;


### the technical solutions chosen or any exceptionally favourable conditions available to the tenderer for the execution of the work or for the supply of the goods or services ; ### the technical solutions chosen and / or any exceptionally favourable conditions available to the tenderer for the execution of the work or for the supply of the goods or services ;


### contracting authorities shall reject the tender , where they have established that the tender is abnormally low because it does not comply with obligations established by union legislation in the field of social and labour law or environmental law or by the international social and environmental law provisions listed in annex xi . ### contracting authorities shall reject the tender , where they have established that the tender is abnormally low because it does not comply with obligations established by union legislation or national laws , regulations and other binding provisions in the field of social and labour law or environmental law or by the international social and environmental law provisions listed in annex xi .


### these rules for the participation and dissemination should provide a coherent , comprehensive and transparent framework to ensure the most efficient implementation possible , taking into account the need for easy access by all participants , notably small and medium - sized enterprises , through simplified procedures . the financial assistance from the union could be provided through different forms . ### these rules for the participation and dissemination should provide a coherent , comprehensive and transparent framework to ensure the most efficient implementation possible , taking into account the need for easy access by all participants , notably small and medium - sized enterprises and civil society organisations , including those which deal with development cooperation , through simplified procedures . the financial assistance from the union could be provided through different forms .


### furthermore , the coordinating role already attributed to the nsis should be clarified as regards its scope , so as to achieve more efficient coordination of statistical activities at national level , including quality management . ### furthermore , the coordinating role already attributed to the nsis for european statistics produced through the ess should be clarified as regards its scope , so as to achieve more efficient coordination of statistical activities within the ess at national level , including quality management .


### the nsis should furthermore be consulted at an early stage on the design of new administrative records that could provide data for statistical purposes and on planned changes to , or cessation of , existing administrative sources . they should also receive relevant metadata from the owners of administrative data and coordinate standardisation activities concerning administrative records that are relevant for statistical data production . ### the nsis should furthermore be consulted at an early stage on the design of new administrative records that could provide data for statistical purposes and on planned changes to , or cessation of , existing administrative sources . they should also receive relevant metadata from the owners of administrative data and coordinate standardisation activities concerning administrative records that are relevant for statistical data production . the exercise by the nsis and other national authorities of competences related to access , use , standardisation , initial design , subsequent development and cessation of escb administrative records should not interfere with the performance of escb tasks specified in article 127 of the treaty on the functioning of the european union and with safeguards on central bank independence under articles 130 and 282 of the tfeu and article 7 of protocol on the statute of the european system of central banks and of the european central bank .


### the national statistical authority designated by each member state as the body having the responsibility for coordinating all activities at national level for the development , production and dissemination of european statistics shall act in this regard as the sole contact point for the commission on statistical matters . ### the national statistical authority designated by each member state as the body having the responsibility for coordinating all activities for the development , production and dissemination of european statistics at national level under this regulation shall act in this regard as the sole contact point for the commission on statistical matters .


### the coordinating responsibility of the nsi shall cover all other national authorities responsible for the development , production and dissemination of european statistics . the nsi shall , in particular , be responsible at national level for coordinating statistical programming and reporting , quality monitoring , methodology , data transmission and communication on ess statistical actions . ### the coordinating responsibility of the nsi shall cover all other national authorities responsible for the development , production and dissemination of european statistics produced under this regulation . the nsi shall , in particular , be responsible at national level for coordinating statistical programming and reporting , quality monitoring , methodology , data transmission and communication on ess statistical actions and shall cooperate with the respective national central bank to ensure production of complete and coherent european statistics through the ess and the escb in their respective fields of competence .


### the heads of nsis shall be accountable for the statistical activities and budget execution of the nsi ; they shall publish an annual report and may express comments on budget allocation issues related to the statistical activities of the nsi . ### the heads of nsis shall be accountable for the statistical activities and budget execution of the nsi ; they shall publish an annual report and may be invited to appear before the relevant committee of the national parliament to discuss matter pertaining to statistical governance and express comments on budget allocation issues related to the statistical activities of the respective nsis .


### the heads of nsis shall be accountable for the statistical activities and budget execution of the nsi ; they shall publish an annual report and may express comments on budget allocation issues related to the statistical activities of the nsi . ### the heads of nsis shall be accountable for the statistical activities and budget execution of the nsi ; they shall publish an annual report presented to their respective national parliaments and may express comments on statistical activities and budget allocation issues related to the statistical activities of the nsi .


### member states shall take all necessary measures to implement the code of practice in order to maintain confidence in their statistics . to this effect , each member state , represented by its government , shall sign and implement a “commitment on confidence in statistics” whereby specific policy commitments are made to implement the code and to establish a national quality assurance framework , including self - assessments and improvement actions . the commitment shall be counter - signed by the commission . ### member states shall take all necessary measures to implement the code of practice in order to maintain confidence in their contribution to the european statistics produced by the ess . to this effect , each member state , represented by its government , shall sign and implement a “commitment on confidence in statistics” whereby specific policy commitments are made to implement the code and to establish a national quality assurance framework , including self - assessments and improvement actions . the commitment shall be counter - signed by the commission .


### in order to reduce the burden on respondents , the nsis , other national authorities as referred to in article 4 and the commission shall have the right to access and use , promptly and free of charge , all administrative records and to integrate these administrative records with statistics , to the extent necessary for the development , production and dissemination of european statistics . ### in order to reduce the burden on respondents , the nsis , other national authorities as referred to in article 4 and the commission shall have the right to access and use , promptly and free of charge , all administrative records and to integrate these administrative records with statistics , to the extent necessary for the development , production and dissemination of european statistics produced under this regulation .


### access by and involvement of the nsis , other national authorities and the commission pursuant to paragraphs 1 and 2 shall be limited to administrative records within their own respective public administrative system . ### the practical arrangements and the conditions for achieving effective access shall be determined where necessary by each member state and the commission within their respective spheres of competence . as regards administrative records built up and maintained by the escb , performance by nsis , other national authorities and the commission of competences under paragraphs 1 and 2 shall not interfere with the performance of escb tasks specified in article 127 of the tfeu and with the safeguards on central bank independence and professional secrecy laid down in article 130 and article 282 of the tfeu and articles 7 and 37 of protocol on the statute of the european system of central banks and of the european central bank respectively .


### the nsis shall receive relevant metadata from the owners of administrative records used for statistical purposes . ### access by and involvement of the nsis , other national authorities and the commission pursuant to paragraphs 1 , 2 and 3 shall be limited to administrative records within their own respective public administrative system .


### a delegated act adopted pursuant to article 12 shall enter into force only if no objection has been expressed either by the european parliament or the council within a period of 2 months of notification of that act to the european parliament and the council or if , before the expiry of that period , the european parliament and the council have both informed the commission that they will not object . that period shall be extended by two months at the initiative of the european parliament or the council . ’ ### a delegated act adopted pursuant to article 12 shall enter into force only if no objection has been expressed either by the european parliament or the council within a period of three months of notification of that act to the european parliament and the council or if , before the expiry of that period , the european parliament and the council have both informed the commission that they will not object . that period shall be extended by three months at the initiative of the european parliament or the council .


### ' public authority ' means any contracting authority , as defined by directive 2004 / 18 / ec ; ### ' public authority ' means any contracting authority , as defined by article 2 of directive 2004 / 17 / ec1 of the european parliament and of the council of 31 march 2004 coordinating the procurement procedures of entities operating in the water , energy , transport and postal services sectors and article 1 of directive 2004 / 18 / ec ; 1 oj l 134 , 30 . 4 . 2004 , p . 1 .


### member states shall ensure that , when interest for late payment becomes payable in commercial transactions in accordance with articles 3 and 5 and unless otherwise specified in the contract , the creditor is entitled to obtain from the debtor any of the following amounts : ### member states shall ensure that , when interest for late payment becomes payable in commercial transactions in accordance with articles 3 and 5 , the creditor is automatically entitled to obtain from the debtor , i . e . without the individual creditor ' s having to take any action , any of the following minimum amounts :


### member states shall provide that a clause in a contract relating to the date for payment , the rate of interest for late payment or recovery costs shall either be unenforceable or shall give rise to a claim for damages if it is grossly unfair to the creditor . in determining whether a clause is grossly unfair to the creditor , all circumstances of the case shall be considered , including good commercial practice and the nature of the product or the service . account shall also be taken of whether the debtor has any objective reason to deviate from the statutory rate of interest or from article 3 , article 4 or article 5&#160 ; . ### member states shall provide that a clause in a contract relating to the date for payment , the rate of interest for late payment or recovery costs shall either be unenforceable or shall give rise to a claim for damages if it is grossly unfair to the creditor . in determining whether a clause is grossly unfair to the creditor , all circumstances of the case shall be considered , including good commercial practice and the nature of the product or the service , as well as the size of the undertakings . account shall also be taken of whether the debtor has any objective reason to deviate from the statutory rate of interest or from article 3 , article 4 or article 5 .


### the means referred to in paragraph 2 shall include provisions whereby representative organisations may take action according to the national law concerned before the courts or before competent administrative bodies on the grounds that clauses are grossly unfair , so that they can apply appropriate and effective means to prevent their continued use . ### the means referred to in paragraph 2 shall include provisions whereby representative organisations may take action according to the national law concerned before the courts or before competent administrative bodies on the grounds that clauses are grossly unfair , so that they can apply appropriate and effective means to prevent their continued use . this provision shall be without prejudice to the confidentiality clause binding representative organisations to their member entities .


### the means referred to in paragraph 2 shall include provisions whereby representative organisations may take action according to the national law concerned before the courts or before competent administrative bodies on the grounds that clauses are grossly unfair , so that they can apply appropriate and effective means to prevent their continued use . ### the means referred to in paragraph 2 shall include provisions whereby representative organisations may take action according to the national law concerned before the courts or before competent administrative bodies on the grounds that clauses are grossly unfair , so that they can apply appropriate and effective means to prevent their use .


### member states shall ensure full transparency about the rights and obligations stemming from this directive , in particular by publishing the applicable statutory interest rate . ### member states shall ensure full transparency about the rights and obligations stemming from this directive , in particular by publishing the applicable statutory interest rate and the procedure relating to payments by public authorities , as a specific guarantee to any possible chain of subcontractors .


### this directive should be applied without prejudice to the principle of eu preference as regards access to member states ' labour market as expressed in the relevant provisions of acts of accession . ### this directive should be applied without prejudice to the principle of eu preference as regards access to member states ' labour market as expressed in the relevant provisions of acts of accession . this notwithstanding , that principle should not be used to deviate from the principle of equal pay for equal work , as regards both workers from member states and third country nationals .


### activities dependent on the passing of the seasons are typically to be found in sectors such as agriculture , during the planting or harvesting period , or tourism , during the holiday period . ### activities dependent on the passing of the seasons are typically to be found in sectors such as agriculture , during the planting or harvesting period , tourism , or large - scale construction during the holiday period .


### the directive should not affect , where granted , the rights of third - country nationals already legally staying in a member state to work . ### the directive should not adversely affect the rights of third - country nationals already legally staying in a member state to work .


### member states should have the possibility to apply a test demonstrating that a post cannot be filled from within the domestic labour market . ### also as a consequence of the crisis , the high unemployment rate and the great number of long - term unemployed people living in the eu , for whom seasonal work is often an important tool for easing financial difficulties , member states should have the possibility to apply a test every year demonstrating that a post cannot be filled from within the domestic and the union labour market .


### in order to ensure that seasonal workers have adequate accommodation during their stay , including at a reasonable cost , provision should be made to require employers to provide the evidence of the accommodation they or third - parties provide . ### in order to ensure that seasonal workers have adequate accommodation during their stay , including at a reasonable cost , and that they receive equal treatment to nationals and enjoy a decent standard of living , provision should be made to require employers to provide the evidence of the accommodation they or third - parties provide . it is necessary to ensure transparency with regard to the cost of the accommodation which should not be automatically deducted from the wage .


### in the absence of a system for declaring collective agreements of universal application , member states may base themselves on collective agreements which are generally applicable to all similar undertakings in the geographical area and in the profession or industry concerned , and / or collective agreements which have been concluded by the most representative employers ' and labour organisations at national level and which are applied throughout national territory . ### in addition to the legislative , administrative and regulatory provisions applicable to workers who are nationals of the host member state , arbitration decisions and collective agreements and contracts concluded at any level , in accordance with the host member state’s national law and practice , should also apply to third - country national seasonal workers under the same terms as to nationals of the host member state .


### in the absence of a system for declaring collective agreements of universal application , member states may base themselves on collective agreements which are generally applicable to all similar undertakings in the geographical area and in the profession or industry concerned , and / or collective agreements which have been concluded by the most representative employers ' and labour organisations at national level and which are applied throughout national territory . ### in addition to the legislative , administrative and regulatory provisions that apply to workers who are nationals of the host member state , arbitration decisions and collective agreements and contracts concluded at any level , in accordance with the host member states’ national law and practices , by the most representative employers’ and labour organisations , should also apply to third - country seasonal workers under the same terms as to nationals of the host member state .


### working conditions , including pay and dismissal as well as health and safety requirements at the workplace , applicable to seasonal work as laid down by law , regulation or administrative provision and / or universally applicable collective agreements in the member state to which they have been admitted according to this directive . ### working conditions , including pay and dismissal , working time and leave , holidays and disciplinary provisions , professional and family life as well as health and safety requirements at the workplace , taking into account , in addition to legal , administrative and regulatory provisions , the arbitration decisions and collective agreements and contracts , concluded , at any level , in accordance with the host member state ' s law and practices , by the most representative employers ' and labour organisations , under the same terms as for nationals of the host member state .


### working conditions , including pay and dismissal as well as health and safety requirements at the workplace , applicable to seasonal work as laid down by law , regulation or administrative provision and / or universally applicable collective agreements in the member state to which they have been admitted according to this directive . ### working conditions including pay and dismissal , working hours and holidays as well as health and safety requirements at the workplace , as laid down by law , regulation or administrative and regulatory provisions and collective agreements in the member states in which they are currently working .


### working conditions , including pay and dismissal as well as health and safety requirements at the workplace , applicable to seasonal work as laid down by law , regulation or administrative provision and / or universally applicable collective agreements in the member state to which they have been admitted according to this directive . ### terms of employment &#8211 ; that is , the minimum working age , restrictions on home - working and all other matters regarded as terms of employment according to the host member state ' s law and national practice &#8211 ; and working conditions , including pay and dismissal , working hours and holidays as well as health and safety requirements at the workplace , as laid down by law , regulation or administrative provision or by arbitration decisions , collective agreements and contracts concluded at any level , in accordance with the host member state ' s national law and practice and under the same terms as those applicable to nationals of the host member state .


### whatever the law applicable to the employment relationship , seasonal workers shall be entitled to : working conditions , including pay and dismissal as well as health and safety requirements at the workplace , applicable to seasonal work as laid down by law , regulation or administrative provision and / or universally applicable collective agreements in the member state to which they have been admitted according to this directive . in the absence of a system for declaring collective agreements to be of universal application , member states may , if they so decide , base themselves on collective agreements which are generally applicable to all similar undertakings in the geographical area and in the profession or industry concerned , and / or collective agreements which have been concluded by the most representative employers ' and labour organisations at national level and which are applied throughout national territory ; 2 . equal treatment with nationals of the host member state as regards at least with regard to : freedom of association and affiliation and membership of an organisation representing workers or of any organisation whose members are engaged in a specific occupation , including the benefits conferred by such organisations , without prejudice to the national provisions on public policy and public security ; b ) provisions in national laws regarding the branches of social security as defined in article 3 of council regulation no 883 / 04 ; c ) payment of statutory pensions based on the worker ' s previous employment under the same conditions as nationals of the member states concerned when they move to a third country ; d ) access to goods and services and the supply of goods and services made available to the public , except public housing and counselling services afforded by employment services . ### seasonal workers shall be entitled to equal treatment with nationals of the host member state at least with regard to : working conditions , including pay and dismissal , working hours , holidays and disciplinary provisions , as well as health and safety requirements at the workplace , taking into account , in addition to legal , administrative and regulatory provisions , arbitration decisions and collective agreements and contracts , concluded at any level , in accordance with the host member state ' s law and practices , by the most representative employers ' and labour organisations , under the same terms as for nationals of the host member state ; 2 . freedom of association and affiliation and membership of an organisation representing workers or of any organisation whose members are engaged in a specific occupation , including the rights and benefits conferred by such organisations , including the right to negotiate and conclude collective agreements and the right to strike and take industrial action , in accordance with the host member state’s national law and practices which comply with union law , without prejudice to the national provisions on public policy and public security ; 3 . the branches of social security , as defined in regulation no 883 / 2004 ; 4 . access to goods and services and the supply of goods and services made available to the public including procedures for obtaining housing and the assistance and advice services afforded by employment offices as provided by national law . this paragraph shall be without prejudice to the freedom of contract in accordance with national and union law .


### ‘ seasonal worker’ means a third - country national who retains a legal domicile in a third country but resides temporarily for the purposes of employment in the territory of a member state in a sector of activity dependent on the passing of the seasons , under one or more fixed - term work contracts concluded directly between the third - country national and the employer established in a member state ; ### ‘ seasonal worker’ means a third - country national who resides temporarily for the purposes of employment in the territory of a member state in a sector of activity dependent on the passing of the seasons , within the scope of article 2 , under one or more fixed - term work contracts concluded directly between the third - country national and the employer established in a member state ;


### evidence of having accommodation as set out in article 14 . ### evidence of having accommodation , in accordance with the provisions laid down in article 14 .


### member states may verify whether the vacancy concerned could not be filled by national or eu , or by third - country nationals lawfully residing in the member state and already forming part of its labour market by virtue of eu or national law and reject the application . ### member states may verify whether the vacancy concerned could not be filled by nationals of the member state concerned , by other union citizens , or by third country nationals lawfully residing in the member state and already forming part of its labour market by virtue of eu or national law and reject the application .


### the sia should define long - term priory fields for the european institute of innovation and technology and include an assessment of its economic impact and capacity to generate best innovation added - value . the sia should take into account the results of the monitoring and evaluation of the eit . ### the sia should define long - term priory fields for the european institute of innovation and technology and include an assessment of its economic and social impact and capacity to generate best innovation added - value . the sia should take into account the results of the monitoring and evaluation of the eit .


###  enhancing the impact of investments on education , research and innovation and testing new ways for innovation governance : the eit acts as a catalyst , adding value to the existing research base , by accelerating the take - up and exploitation of technologies and research outcomes . innovation activities contribute in turn to align and leverage research investments and to make education and training activities more responsive to business needs . to this end , the eit has been equipped with a substantial degree of flexibility to test out new innovation models , allowing for true differentiation in the kics ' governance and funding models and quick adaptation to better cope with emerging opportunities . ###  enhancing the impact of investments on education , research and innovation and testing new ways for innovation governance : the eit acts as a catalyst , adding value to the existing research base , by accelerating the take - up and exploitation of technologies and research outcomes . innovation activities contribute in turn to align and leverage research investments and to make education and training activities more responsive to business needs . to this end , the eit has been equipped with a substantial degree of flexibility to test out new innovation models , allowing for true differentiation in the kics ' governance and funding models and quick adaptation to better cope with emerging opportunities . the eit also has the potential to develop new financing models , such as innovation prizes , allowing it to maximise the public returns of the financing of research , ensuring that innovation not only tackles the most urgent needs of society but also can benefit rapidly to european citizens .


### the inter - relationships between research , innovation and education are increasingly being recognised within eu initiatives and programmes . there is great potential for mutually reinforcing actions at european , national and regional level . at eu level , the strategic framework provided by horizon 2020 – the framework programme for research and innovation – will further ensure these synergies are fully exploited . ### the inter - relationships between research , innovation and education are increasingly being recognised within eu initiatives and programmes . there is great potential for mutually reinforcing actions at european , national and regional level . at eu level , the strategic framework provided by horizon 2020 – the framework programme for research and innovation – will further ensure these synergies are fully exploited . the eit and its kics have to complement the totality of eu research and innovation funding , rather than duplicate them .


### the eit will strongly contribute to the objectives set out in horizon 2020 , in particular by addressing societal challenges in a complementary way to other initiatives in these areas . within horizon 2020 , the eit will be part of the ‘ tackling societal challenges’ objective but following the approach of seamless interaction across objectives , it will also contribute to ‘ industrial leadership and competitive frameworks’ by stimulating results - driven research and fostering the creation of high growth innovative smes . finally , it will contribute to the creation of an ‘ excellent science base’ by fostering mobility across boundaries – of disciplines , sectors and countries – and by embedding entrepreneurship and a risk - taking culture in innovative post - graduates degrees . the eit will thereby significantly contribute to promoting the framework conditions that are needed to realise the innovative potential of eu research and to promote the completion of the european research area . ### the eit will strongly contribute to the objectives set out in horizon 2020 , in particular by addressing societal challenges in a complementary way to other initiatives in these areas . within horizon 2020 , the eit will be part of the ‘ tackling societal challenges’ objective but following the approach of seamless interaction across objectives , it will also contribute to ‘ industrial leadership and competitive frameworks’ by stimulating results - driven research and fostering the creation of high growth innovative smes . finally , it will contribute to the creation of an ‘ excellent science base’ by fostering mobility across boundaries – of disciplines , sectors and countries – and by embedding entrepreneurship and a risk - taking culture in innovative post - graduates degrees . the eit must support cross - border and cross - sector cooperation and mobility in research and innovation between academia , research institutes and business . the eit will create a joint innovation and knowledge sharing platform that will help support areas which are not directly participating in kics and , in the longer term , help achieve the priorities of the horizon 2020 framework programme . a separate priority needs to be established to define the specific scope within which the eit will operate in the context of cooperation on research and innovation with third countries and international organisations , thus helping to disseminate good community practices . the eit will thereby significantly contribute to promoting the framework conditions that are needed to realise the innovative potential of eu research and to promote the completion of the european research area .


### moreover , the eit brings a fully fledged education dimension to the eu ' s research and innovation policy . via innovative , entrepreneurial education it plays an important bridging role between the research and innovation framework and education policies and programmes and provides the long term commitment needed to deliver sustainable changes in higher education . notably through new , trans and interdisciplinary eit - labelled degrees the eit is leading a collaborative effort towards education for innovation with clear spill over effects on the broader european agenda for the modernisation of higher education institutions thereby promoting the european higher education area . ### moreover , the eit brings a full - fledged education component to the eu ' s research and innovation policy as the only instrument within horizon 2020 framework which has strong emphasis on the educational aspect , including through open access to research publications . hence , the eit should ensure that the kics ' masters and phd programmes are properly funded . via innovative , entrepreneurial education it plays an important bridging role between the research and innovation framework and education policies and programmes and provides the long term commitment needed to deliver new ways to adapt higher education to the unfolding requirements of the respective societies . particular attention needs to be paid to ensuring that universities and other higher education institutions are adequately funded . this will ensure that there is a level playing field for institutions aspiring to attain the highest european standard . at the same time , support will be maintained for research and education centres that are already recognised as centres of excellence . notably through new , trans and interdisciplinary eit - labelled degrees the eit is leading a collaborative effort towards education for innovation with clear spill over effects on the broader european agenda for the modernisation of higher education systems , while upholding , at the same time , the humanistic tradition of european higher education , thereby promoting the european higher education area .


### moreover , there are opportunities for mutually reinforcing interaction with the union ' s cohesion policy by addressing the linkages between the local and global aspects of innovation . co - location centres provide for cross - border collaboration and are well positioned to capitalise on various funding schemes from their respective regions . the co - location centres play a major role in strengthening the local - global connectivity of the kic as a whole , including through close co - operation with regional authorities , in particular those involved in designing and delivering the regional innovation strategies for smart specialisation . furthermore , linkages between kics and local cluster organisations could be strengthened to increase the involvement of smes in the activities of the kics . while opportunities for synergies differ depending on the thematic area of a kic , a number of initiatives and programmes at eu level seem particularly prone to offering benefits from cooperation and coordination . as the very concept of the eit / kics rests on adding value to existing european excellence , the kics – present and future – will by definition seek to explore these synergies to a maximum . kics will add value to initiatives that may exist in the relevant areas , including joint programming initiatives , european innovation partnerships and public private partnerships . ### moreover , there are opportunities for mutually reinforcing interaction with the union ' s cohesion policy by addressing the linkages between the local and global aspects of innovation . co - location centres provide for cross - regional and cross - border collaboration and are well positioned to capitalise on various funding schemes from their respective regions . the co - location centres play a major role in strengthening the local - global connectivity of the kic as a whole , including through close co - operation with regional authorities , in particular those involved in designing and delivering the regional innovation strategies for smart specialisation . furthermore , linkages between kics and local cluster organisations could be strengthened to increase the involvement of smes in the activities of the kics . while opportunities for synergies differ depending on the thematic area of a kic , a number of initiatives and programmes at eu level seem particularly prone to offering benefits from cooperation and coordination . as the very concept of the eit / kics rests on adding value to existing european excellence , the kics – present and future – will by definition seek to explore these synergies to a maximum . kics will add value to initiatives that may exist in the relevant areas , including joint programming initiatives , european innovation partnerships and public private partnerships . safeguards shall be created in order to avoid double funding . any reduction in funding of other education - related programmes should be avoided .


### joint programming initiatives , a key instrument for addressing fragmentation in research , should provide the nucleus of the pan - european kic research base . in turn , kics can speed up and foster the exploitation of excellent public research pooled together by the jpis , thereby addressing fragmentation in innovation . the joint technology initiatives and the newly established public and private partnerships provide platforms for promotion of large - scale industry - driven research and enhance the development of major technologies . kics can help catalysing these major research investments to boost technology transfer and commercialisation and to develop new ventures within existing business via entrepreneurial talent . through its knowledge triangle approach , the eit will complement investment of the european research council on world - class frontier research by addressing the whole innovation chain from ideas to application and exploitation and provide additional opportunities in innovation and exposure to entrepreneurship to ‘ marie curie’ researchers and ‘ erasmus for all’ students . ### joint programming initiatives , a key instrument for addressing fragmentation in research , should provide the nucleus of the pan - european kic research base . in turn , kics can speed up and foster the exploitation of excellent public research pooled together by the jpis , thereby addressing fragmentation in innovation . the joint technology initiatives and the newly established public and private partnerships provide platforms for promotion of large - scale industry - driven research and enhance the development of major technologies . kics can help to catalyse these major research investments to boost technology transfer and commercialisation and to develop new ventures within existing business via entrepreneurial talent . through its knowledge triangle approach , the eit will complement investment of the european research council on world - class frontier research by addressing the whole innovation chain from ideas to application and exploitation and guarantee the development of the european research area , providing new opportunities for researchers in the context of maria skłodowska - curie activities . the eit will take advantage of europe’s intellectual capital with a view to acquiring new skills in innovation and exposure to entrepreneurship thanks to the correlation with the ‘ erasmus for all’ programme .


### the upcoming european innovation partnerships will provide overarching frameworks to facilitate alignment and synergies among supply and demand - driven research and innovation instruments and policies . the kics can contribute to the eips through their distributed nature and on the ground experience , and in particular by developing the necessary human capital , educating key actors such as entrepreneurs and researchers , and identifying framework conditions and best practise on policy , regulatory or standardisation issues in their relevant sector . ### the upcoming european innovation partnerships will provide overarching frameworks to facilitate alignment and synergies among supply and demand - driven research and innovation instruments and policies . the eip can be the link between the societal challenges and the eit , playing the role of agenda setter and looking into the need of establishing a kic regarding certain themes . the kics can contribute to the eips through their distributed nature and on the ground experience , and in particular by developing the necessary human capital , educating key actors such as entrepreneurs and researchers , and identifying framework conditions and best practise on policy , regulatory or standardisation issues in their relevant sector .


### the process of setting up the initial kics has involved a substantial ‘ learning by doing’ . it has shown that kics are novel concepts and the challenge of getting legally organised as a kic and forming contractual relationships with kics and their partners was underestimated by all parties involved in the process . a lack of awareness of the suitability of different forms of legal entity did not help smoothing the set - up process . while the bottom - up approach , which gives substantial leeway to each kic to organise their partnerships is to be maintained , further guidance should be given to identify suitable legal set - ups . moreover , the challenge of bringing different academic and business cultures together into one legal entity should not be underestimated ; hence the importance of sharing common values at both kic and eit level . furthermore , kics are large scale institutional innovations , and no two kics are the same . this offers a rich array of innovation models , but also renders the overall coordination and monitoring of kics more challenging . ### the process of setting up the initial kics has involved a substantial ‘ learning by doing’ . it has shown that kics are novel concepts and the challenge of getting legally organised as a kic and forming contractual relationships with kics and their partners was underestimated by all parties involved in the process . a lack of awareness of the suitability of different forms of legal entity did not help smoothing the set - up process . while the bottom - up approach , which gives substantial leeway to each kic to organise their partnerships is to be maintained , further guidance should be given to identify suitable legal set - ups . moreover , the challenge of bringing different academic and business cultures together into one legal entity should not be underestimated ; hence the importance of sharing common values at both kic and eit level . furthermore , kics are large scale institutional innovations , and no two kics are the same . this offers a rich array of innovation models , but also renders the overall coordination and monitoring of kics more challenging . therefore a tailor - made approach towards the different kics is necessary .


### in the future , clearer guidance should be given upstream since the selection process to ensure that essential strategic features are shared by all kics , while allowing for differentiated approaches in kics organisation , delivery and funding approaches . finally , the current total number of three kics does not yet provide the critical mass for the eit to develop its full potential as a leading innovation institute . with only three kics there are limited opportunities to achieve cross - kic benefits of adjacent innovation opportunities as well as to reap economies of scale in administration and dissemination . it also means that the eit is not of a sufficient scale to truly act as a european institution in its own right . in this respect additional kics are required in order for the eit to gain the critical mass for being more than simply the ‘ sum of its parts’ . if the eit is to explore new innovation governance and management models through the kics , a limited number of additional partnerships need to be set up in order to enlarge the sample on which the eit experience is based upon . ### in the future , clearer guidance should be given upstream since the selection process to ensure that essential strategic features are shared by all kics , while allowing for differentiated approaches in kics organisation , delivery and funding approaches . the eit has to play a more active role in advising and supporting the kics in administrative matters . for that purpose , the eit has to develop a strategy to reduce administrative burden and create a best - practices guide that disseminates good practices and experiences of existing kics to new kics . finally , the current total number of three kics does not yet provide the critical mass for the eit to develop its full potential as a leading innovation institute . with only three kics there are limited opportunities to achieve cross - kic benefits of adjacent innovation opportunities as well as to reap economies of scale in administration and dissemination . it also means that the eit is not of a sufficient scale to truly act as a european institution in its own right . in this respect additional kics are required in order for the eit to gain the critical mass for being more than simply the ‘ sum of its parts’ . if the eit is to explore new innovation governance and management models through the kics , a limited number of additional partnerships need to be set up in order to enlarge the sample on which the eit experience is based upon .


### building on these lessons the eit aims to consolidate and further develop its role as an ' investor ' which nurtures and enables existing centres of excellence in research , business and higher education in europe to come together and foster their long - term systematic collaborations through the kics . ### building on these lessons the eit aims to consolidate and further develop its role as an ' investor ' which nurtures and enables existing centres of excellence in research , business and higher education in europe to come together and foster their long - term systematic collaborations through the kics . with this in mind , information campaigns , making use of all relevant means and avenues of communication , should be launched to ensure that both universities and students have sufficient access to information on the functioning and the scope of the eit and the kics .


### the ‘ eit investor’ approach stands for a focus on identifying best strategic opportunities and selecting a portfolio of world - class partnerships – the kics – to deliver on these . as part of this approach , the eit awards the annual grants to the kics based on their past performance and proposed activities in their business plan . the assessment of the business plans will be supported by external , independent experts . in this perspective , the eit should not only set out broad directions and visions , but needs to provide kics with an appropriate level of support and monitor their performance . at the same time , kics are given a substantial degree of leeway to define their internal strategies and organisation as well as to deliver their activities and mobilise the talent and resources needed . ### the ‘ eit investor’ approach stands for a focus on identifying best strategic opportunities and selecting a portfolio of world - class partnerships – the kics – to deliver on these . as part of this approach , the eit awards the annual grants to the kics based on their past performance and proposed activities in their business plan . the assessment of the business plans will be supported by external , independent experts . in this perspective , the eit should not only set out broad directions and visions , but needs to provide kics with an appropriate level of support and monitor their performance . at the same time , kics are given a substantial degree of leeway to define their agenda , internal strategies and organisation as well as to deliver their activities and mobilise the talent and resources needed .


### returns on eit investment in kics will be measured in terms of tangible benefits for the european economy and society at large , such as creation of new business , products and services in existing and future markets , better skilled entrepreneurial people , new and more attractive job opportunities and the attraction and retention of talent from across the eu and abroad . ### returns on eit investment in kics will be measured in terms of tangible benefits for the european economy and society at large , such as creation of new business , products and services in existing and future markets , better skilled entrepreneurial people , new and more attractive job opportunities and the attraction and retention of talent from across the eu and abroad . however , also qualitative performance indicators will be set out to assess the kics .


### · incentivise kics to develop joint activities on cross - cutting issues . ### · incentivise cross - co - location work within each kic and stimulate kics to develop joint activities on cross - cutting issues .


###  set up a system of peer evaluations for eit labelled qualifications and engage in dialogue with national and international quality assurance bodies . ###  actively ensure consistency and equivalence across the eit by setting up a system of peer reviews for eit labelled qualifications and engage in dialogue with national and international quality assurance bodies .


###  encourage kics to develop a greater variety of educational and training activities . ###  encourage kics to develop a greater variety of educational and training activities , in particular , activities designed to give the kics the opportunity to share their knowledge with institutions which may be interested in participating in future kics , and to raise awareness about the existence of these educational programmes .


### the kics will provide an ideal testing ground for new approaches to funding and management of innovation . through kics ' experimentation and experience , the eit will deliver a simplification agenda in key areas such as contractual agreements , simplified reporting , lumps sums and flat rates . ### the kics will provide an ideal testing ground for new approaches to funding and management of innovation . through kics ' experimentation and experience , the eit will deliver a simplification agenda in key areas such as contractual agreements , simplified reporting , lumps sums and flat rates in order to reduce the administrative burden for the kics .


### determining factors in this regard are size , composition and procedures of the governing board . the principle of independent members , combined with a limited number of elected members representing the kic community , has proven its value and allows gathering of expertise from across the knowledge triangle . the initial model with 18 elected members plus , more recently , four additional kic representatives has , however , shown its limitations . a board scaled down in size will lead to more efficient decision - making and reduce administrative overheads . finally , further efficiency can be gained by re - focusing the eit governing board towards its core role of providing strategic guidance . moreover , coherence with other eu initiatives will be further strengthened via reinforced consultation with the european commission on the eit triennial work programme . the information on eit and kics from the eit triennial work programme will enable to assess and ensure complementarity with the other parts of horizon 2020 and other union policies and instruments . all these changes have been incorporated in the modified eit regulation accompanying the sia . ### determining factors in this regard are size , composition and procedures of the governing board . the principle of independent members , combined with a limited number of elected members representing the kic community , has proven its value and allows gathering of expertise from across the knowledge triangle . the initial model with 18 elected members plus , more recently , four additional kic representatives has , however , shown its limitations . a board scaled down in size will lead to more efficient decision - making and reduce administrative overheads . finally , further efficiency can be gained by re - focusing the eit governing board towards its core role of providing strategic guidance . for this purpose a committee of academic experts providing valuable assistance and consultancy to the governing board could be more than useful on issues related mostly to the academic strategy and the educational practices of the kics ' whose role will be to provide oversight on the content of the programmes , their quality criteria and their social and cultural aspects . moreover , coherence with other eu initiatives will be further strengthened via reinforced consultation with the european commission on the eit triennial work programme . the information on eit and kics from the eit triennial work programme will enable to assess and ensure complementarity with the other parts of horizon 2020 and other union policies and instruments . all these changes have been incorporated in the modified eit regulation accompanying the sia .


### determining factors in this regard are size , composition and procedures of the governing board . the principle of independent members , combined with a limited number of elected members representing the kic community , has proven its value and allows gathering of expertise from across the knowledge triangle . the initial model with 18 elected members plus , more recently , four additional kic representatives has , however , shown its limitations . a board scaled down in size will lead to more efficient decision - making and reduce administrative overheads . finally , further efficiency can be gained by re - focusing the eit governing board towards its core role of providing strategic guidance . moreover , coherence with other eu initiatives will be further strengthened via reinforced consultation with the european commission on the eit triennial work programme . the information on eit and kics from the eit triennial work programme will enable to assess and ensure complementarity with the other parts of horizon 2020 and other union policies and instruments . all these changes have been incorporated in the modified eit regulation accompanying the sia . ### determining factors in this regard are size , composition and procedures of the governing board . the principle of independent members , combined with a limited number of elected members representing the kic community , has proven its value and allows gathering of expertise from across the knowledge triangle . within the board there should be a good balance between members of the stakeholders in the innovation process , business , government and science . the initial model with 18 elected members plus , more recently , four additional kic representatives has , however , shown its limitations . a board scaled down in size will lead to more efficient decision - making and reduce administrative overheads . finally , further efficiency can be gained by re - focusing the eit governing board towards its core role of providing strategic guidance . moreover , coherence with other eu initiatives will be further strengthened via reinforced consultation with the european commission on the eit triennial work programme . the information on eit and kics from the eit triennial work programme will enable to assess and ensure complementarity with the other parts of horizon 2020 and other union policies and instruments . all these changes have been incorporated in the modified eit regulation accompanying the sia .


### moving away from a merely administrator role , the eit headquarters will optimise their operational functions to steer the kics to maximum performance and make good results widely available . there are efficiency gains to be achieved from providing a number of centralised services and functions , rather than at individual kic level . while all kics work on specific themes , a number of elements are of a cross - cutting nature and it is precisely there where the eit can provide tangible added value . such knowledge provider functions can relate notably to the eit headquarters becoming an information broker and resourceful interlocutor , e . g . in fostering cross - kic exchange and mutual learning , facilitating relations with the eu institutions and other key organisations , such as the organisation for economic co - operation and development , or on specific cross - cutting issues , such as counselling on ip , technology and knowledge transfer , benchmarking against international best practices , or undertaking anticipation and foresight studies to identify future directions for the eit and the kics . the eit and kics should decide together where these tasks can be most effectively dealt with . in this regard , it will be of crucial importance for the eit and the kics to establish viable mechanisms for systematic collaboration around cross - cutting issues . ### moving away from a merely administrator role , the eit headquarters will optimise their operational functions to steer the kics to maximum performance and make good results widely available . there are efficiency gains to be achieved from providing a number of centralised services and functions , rather than at individual kic level . while all kics work on specific themes , a number of elements are of a cross - cutting nature and it is precisely there where the eit can provide tangible added value . such knowledge provider functions can relate notably to the eit headquarters becoming an information broker and resourceful interlocutor , e . g . in fostering cross - kic exchange , transparency , information provision , and developing mutual learning , facilitating relations with the eu institutions and other key organisations such as the organisation for economic co - operation and development . it can thus focus on specific cross - cutting issues , such as counselling on open research , collaborative research , ip and competition law , and technology and knowledge transfer , benchmarking against international best practices , or undertaking anticipation and foresight studies to identify future directions for the eit and the kics . the eit and kics should decide together where these tasks can be most effectively dealt with . in this regard , it will be of crucial importance for the eit and the kics to establish viable mechanisms for systematic collaboration around cross - cutting issues .


### moving away from a merely administrator role , the eit headquarters will optimise their operational functions to steer the kics to maximum performance and make good results widely available . there are efficiency gains to be achieved from providing a number of centralised services and functions , rather than at individual kic level . while all kics work on specific themes , a number of elements are of a cross - cutting nature and it is precisely there where the eit can provide tangible added value . such knowledge provider functions can relate notably to the eit headquarters becoming an information broker and resourceful interlocutor , e . g . in fostering cross - kic exchange and mutual learning , facilitating relations with the eu institutions and other key organisations , such as the organisation for economic co - operation and development , or on specific cross - cutting issues , such as counselling on ip , technology and knowledge transfer , benchmarking against international best practices , or undertaking anticipation and foresight studies to identify future directions for the eit and the kics . the eit and kics should decide together where these tasks can be most effectively dealt with . in this regard , it will be of crucial importance for the eit and the kics to establish viable mechanisms for systematic collaboration around cross - cutting issues . ### moving away from a merely administrator role , the eit headquarters will optimise their operational functions to steer the kics to maximum performance and make good results widely available . there are efficiency gains to be achieved from providing a number of centralised services and functions , rather than at individual kic level . while all kics work on specific themes , a number of elements and challenges are of a cross - cutting nature and it is precisely there where the eit can provide tangible added value . such knowledge provider functions can relate notably to the eit headquarters becoming an information broker and resourceful interlocutor , e . g . in fostering cross colocation and cross - kic exchange and mutual learning , facilitating relations with the eu institutions and other key organisations , such as the organisation for economic co - operation and development , or on specific cross - cutting issues , such as counselling on ip , technology and knowledge transfer , benchmarking against international best practices , or undertaking anticipation and foresight studies to identify future directions for the eit and the kics . the eit and kics should decide together where these tasks can be most effectively dealt with . in this regard , it will be of crucial importance for the eit and the kics to establish viable mechanisms for systematic collaboration around cross - cutting issues .


### the eit designed an original funding model which builds on joint strengths and resources of existing excellent organisations ; eit funding acts as a catalyst to leverage and pool together supplementary financial resources from a wide range of public and private partners . on this basis , the eit provides on average up to 25% of the total kic funding , while the remaining minimum 75% should come from non - eit sources . this includes kic partners ' own revenues and resources , but also public funding at national , regional and eu level , in particular the – current and future – structural funds and the framework programme for research and innovation . in the latter case the kics apply for funding in accordance with the respective rules of the programmes and on an equal footing with other applicants . the contribution from kic partners is not a classic grant ‘ co - financing’ requirement , but a pre - requisite for a minimum level of involvement of existing organisations and their financial commitment to the kic . this bottom - up approach guarantees strong commitment from kic partners , incentivizes investment and stimulates structural and organizational change among kic partners and beyond . the experience of the initial kics shows that industry is financially committed to the delivery of the kic business plans and that the share of the kic budget from industrial partners amounts between 20% - 30% of the total kic annual budget . furthermore , kics have managed to align and pool additional streams of national funding , which would not have been available otherwise . ### the eit designed an original funding model which builds on joint strengths and resources of existing excellent organisations ; eit funding acts as a catalyst to leverage and pool together supplementary financial resources from a wide range of public and private partners . on this basis , the eit provides on average up to 25% of the total kic funding , while the remaining minimum 75% should come from non - eit sources . this includes kic partners ' own revenues and resources , but also public funding at national , regional and eu level , in particular the – current and future – structural funds and the framework programme for research and innovation . in the latter case the kics apply for funding in accordance with the respective rules of the programmes and on an equal footing with other applicants . the contribution from kic partners is not a classic grant ‘ co - financing’ requirement , but a pre - requisite for a minimum level of involvement of existing organisations and their financial commitment to the kic . this bottom - up approach guarantees strong commitment from kic partners , incentivizes investment and stimulates structural and organizational change among kic partners and beyond . however a top - down construction should not be excluded , especially in research initiatives that are already based on such a construction . the experience of the initial kics shows that industry is financially committed to the delivery of the kic business plans and that the share of the kic budget from industrial partners amounts between 20% - 30% of the total kic annual budget . furthermore , kics have managed to align and pool additional streams of national funding , which would not have been available otherwise .


### kics go through various development phases with different characteristics of their total budgets before reaching cruising speed . the absorption capacity of a kic is relatively limited at the very beginning , but develops substantially over the following years . ### kics go through various development phases with different characteristics of their total budgets before reaching cruising speed . the absorption capacity of a kic is relatively limited at the very beginning , but develops substantially over the following years . however , business sectors can be very different from one another and ask for a different approach . some kics become very big and have large financial needs , whereas other ones stay small and need less financing . the eit should therefore apply a tailor - made approach towards the kics and their specific funding needs .


### the eit ' s budget needs in the period 2014 - 2020 are 3 , 1 billion euro and are based on three main components : the necessary expenditure for consolidation of the existing three kics , gradual development towards new kics in 2014 and 2018 respectively , and dissemination and outreach activities and administrative expenditure . ### the eit ' s budget needs in the period 2014 - 2020 are 3 , 1 billion euro and are based on three main components : the necessary expenditure for consolidation of the existing three kics , gradual development towards new kics , and dissemination and outreach activities and administrative expenditure .


### similarly , it would also liaise with the cip eco - innovation market replication projects , where material recycling is one of the priority areas . such experience will continue with horizon 2020 , namely in the context of the climate action , resource efficiency , and sustainable supply of raw materials societal challenges . ### similarly , it would also liaise with the cip eco - innovation market replication projects , where material recycling is one of the priority areas . such experience will continue with horizon 2020 , namely in the context of societal challenges in the form of climate action , resource efficiency , and the sustainable supply of raw materials , encouraging the use of materials for cultural heritage that will better stand up to the effects of time .


### the scope of this directive should be confined to the management of collective investment undertakings which raise capital from a number of investors with a view to investing it in accordance with a defined investment policy on the principle of risk - spreading for the benefit of those investors . this directive should not apply to the management of pension funds or managers of non - pooled investments such as endowments , sovereign wealth funds or assets hold on own account by credit institutions , insurance or reinsurance undertakings . this directive should neither apply to actively managed investments in the form of securities , such as certificates , managed futures , or index - linked bonds . it should , however , cover managers of all collective investment undertakings which are not required to be authorised as ucits . investment firms authorised under directive 2004 / 39 / ec on markets in financial instruments should not be required to obtain an authorisation under this directive in order to provide investment services in respect of aif . investment firms can however only provide investment services in respect of aif , if and to the extent the units or shares thereof can be marketed in accordance with this directive . ### the scope of this directive should cover the management of collective investment undertakings which raise capital from a number of investors with a view to investing it in accordance with a defined or discretionary investment policy for the benefit of those investors . this directive should also apply to single investor funds and leveraged managed accounts , in order to preserve a level playing field between similar types of investment vehicles . it should not apply to public interest entities . this directive should neither apply to actively managed investments in the form of securities , such as certificates , managed futures , or index - linked bonds . nor should this directive apply to holding companies insofar as they hold shares in their subsidiaries , given that such holding companies are not established for the main purpose of generating returns for their investors by means of , in particular , the divestment of their subsidiaries within a set timeframe , but which are aimed at carrying out a business strategy through their subsidiaries . it should , however , cover managers of all collective investment undertakings which are not required to be authorised as ucits . investment firms authorised under directive 2004 / 39 / ec on markets in financial instruments should not be required to obtain an authorisation under this directive in order to provide investment services in respect of aif . investment firms can however only provide investment services in respect of aif , if and to the extent the units or shares thereof can be marketed in accordance with this directive .


### the scope of this directive should be confined to the management of collective investment undertakings which raise capital from a number of investors with a view to investing it in accordance with a defined investment policy on the principle of risk - spreading for the benefit of those investors . this directive should not apply to the management of pension funds or managers of non - pooled investments such as endowments , sovereign wealth funds or assets hold on own account by credit institutions , insurance or reinsurance undertakings . this directive should neither apply to actively managed investments in the form of securities , such as certificates , managed futures , or index - linked bonds . it should , however , cover managers of all collective investment undertakings which are not required to be authorised as ucits . investment firms authorised under directive 2004 / 39 / ec on markets in financial instruments should not be required to obtain an authorisation under this directive in order to provide investment services in respect of aif . investment firms can however only provide investment services in respect of aif , if and to the extent the units or shares thereof can be marketed in accordance with this directive . ### the scope of this directive should be confined to the management of collective investment undertakings which raise capital from a number of investors with a view to investing it in accordance with a defined investment policy on the principle of risk - spreading for the benefit of those investors . it should cover managers of all such collective investment undertakings which are not required to be authorised as ucits . this directive should not apply to the management of pension funds or managers of non - pooled investments such as endowments , sovereign wealth funds or assets held on own account by credit institutions , insurance or reinsurance undertakings . this directive should neither apply to actively managed investments in the form of securities , such as certificates , managed futures , or index - linked bonds . nor , for the purposes of this directive , should an undertaking which principally acts as a holding entity for a group of subsidiary undertakings , and which owns strategic stakes in undertakings with a view to long - term holding rather than for the purpose of generating returns through divestment within a defined timeframe , be regarded as a collective investment undertaking . investment firms authorised under directive 2004 / 39 / ec on markets in financial instruments should not be required to obtain an authorisation under this directive in order to provide investment services in respect of aif . investment firms can however only provide investment services in respect of aif , if and to the extent the units or shares thereof can be marketed in accordance with this directive .


### given that aifm employing high levels of leverage in their investment strategies may , under certain conditions , contribute to the build up of systemic risk or disorderly markets , special requirements should be imposed on aifm using certain techniques giving rise to particular risks . the information needed to detect , monitor and respond to those risks has not been collected in a consistent way throughout the community , and shared across member states so as to identify potential sources of risk to the stability of financial markets in the community . to remedy this situation , special requirements should apply to aifm , which consistently use high levels of leverage in their investment strategies . those aifm should be obliged to disclose information regarding their use and sources of leverage . that information should be aggregated and shared with other authorities in the community , so as to facilitate a collective analysis of the impact of the leverage of those aifm on the financial system in the community , as well as a common response . ### given that aifm employing high levels of leverage in their investment strategies may , under certain conditions , contribute to the build up of systemic risk or disorderly markets , special reporting requirements should be imposed on aifm using leverage . the information needed to detect , monitor and respond to those risks has not been collected in a consistent way throughout the community , and shared across member states so as to identify potential sources of risk to the stability of financial markets in the community . to remedy this situation , special reporting requirements should apply to aifm which use high levels of leverage in their investment strategies . those aifm should be obliged to disclose information regarding their use and sources of leverage . that information should be aggregated in a central register under the auspices of the european systemic risk board established by regulation 2009 / . . . / ec and shared with other authorities in the union , the esma and competent authorities in third countries , where appropriate , so as to facilitate a collective analysis of the impact of the leverage of those aifm on the financial system in the union , as well as a common response . a central register under the auspices of the esrb for banks that provide prime broker services to aif shall also be set up in directives 2006 / 48 / ec and 2006 / 49 / ec .


### in particular the commission should be empowered to adopt the measures necessary for the implementation of this directive . in this respect , the commission should be able to adopt measures determining the procedures under which aifm managing portfolios of aif whose assets under management do not exceed the threshold set out in this directive may exercise their right to be treated as aifm covered by this directive . these measures are also designed to specify the criteria to be used by competent authorities to assess whether aifm comply with their obligations as regards their conduct of business , the type of conflicts of interests aifm have to identify , as well as the reasonable steps aifm are expected to take in terms of internal and organizational procedures in order to identify , prevent , manage and disclose conflicts of interest . they are designed to specify the risk management requirements to be employed by aifm as a function of the risks which the aifm incurs on behalf of the aif that it manages as well as any arrangements needed to enable aifm to manage the particular risks associated with short selling transactions , including any relevant restrictions that might be needed to protect the aif from undue risk exposures . they are designed to specify the liquidity management requirements of this directive and in particular the minimum liquidity requirements for aif . they are designed to specify the requirements that originators of securitisation instruments have to meet in order for an aifm to be allowed to invest in such instruments issued after 1 january 2011 . they are as well designed to specify the requirements that aifm have to comply with when investing in such securitisation instruments . they are designed to specify the criteria under which a valuator can be considered independent in the meaning of this directive . they are designed to specify the conditions under which the delegation of aifm functions should be approved and the conditions under which the manager could no longer be considered to be the manager of the aif in case of excessive delegation . they are designed to specify the content and format of the annual report that aifm have to make available for each aif they manage and to specify the disclosure obligations of aifm to investors and reporting requirements to competent authorities as well as their frequency . they are designed to specify the disclosure requirements imposed on aifm as regards leverage and the frequency of reporting to competent authorities and of disclosure to investors . they are designed to setting limits to the level of leverage aifm can employ when managing aif they are designed to determine the detailed content and the way aifm acquiring controlling influence in issuers and non - listed companies should fulfil their information obligation towards issuers and non - listed companies and their respective shareholders and representatives of employees , including the information to be provided in the annual reports of the aif they manage . they are designed to specify the types of restrictions or conditions that can be imposed on the marketing of aif to professional investor in the home member state of the aifm . they are designed to specify general criteria for assessing equivalence of valuation standards of third countries where the valuator is established in a third country , the equivalence of legislation of third countries regarding depositaries and , for the purpose of the authorisation of aifm established in third countries , the equivalence of prudential regulation and ongoing supervision . they are designed to specify general criteria for assessing whether third countries grant community aifm effective market access comparable to that granted by the community to aifm from third countries . they are designed to specify the modalities , content and frequency of exchange of information regarding aifm between the competent authorities of the home member state of the aifm and other competent authorities where the aifm individually or collectively with other aifm may have an impact on the stability of systemically relevant financial institutions and the orderly functioning of markets . they are designed to specify the procedures for on - the - spot verifications and investigations . ### the commission should be empowered to adopt delegated acts in accordance with article 290 of the treaty on the functioning of the european union , in order to determine the procedures under which aifm managing portfolios of aif whose assets under management do not exceed the threshold set out in this directive may exercise their right to be treated as aifm covered by this directive . these delegated acts may also specify the criteria to be used by competent authorities to assess whether aifm comply with their obligations as regards their conduct of business , the type of conflicts of interests aifm have to identify , as well as the reasonable steps aifm are expected to take in terms of internal and organizational procedures in order to identify , prevent , manage and disclose conflicts of interest . they may specify the risk management requirements to be employed by aifm as a function of the risks which the aifm incurs on behalf of the aif that it manages as well as any arrangements needed to enable aifm to manage the particular risks associated with short selling transactions , including any relevant restrictions that might be needed to protect the aif from undue risk exposures . they may specify the liquidity management requirements of this directive and in particular the minimum liquidity requirements for aif , they may specify the requirements that originators of securitisation instruments have to meet in order for an aifm to be allowed to invest in such instruments issued after 1 january 2011 . they may as well specify the requirements that aifm have to comply with when investing in such securitisation instruments . they may specify the criteria under which a valuator can be considered independent in the meaning of this directive . they may specify the conditions under which the delegation of aifm functions should be approved and the conditions under which the manager could no longer be considered to be the manager of the aif in case of excessive delegation . they may specify the content and format of the annual report that aifm have to make available for each aif they manage and to specify the disclosure obligations of aifm to investors and reporting requirements to competent authorities as well as their frequency . they may specify the disclosure requirements imposed on aifm as regards leverage and the frequency of reporting to competent authorities and of disclosure to investors . they may set limits to the level of leverage aifm can employ when managing aif . they may determine the detailed content and the way aifm acquiring controlling influence in issuers and non - listed companies should fulfil their information obligation towards issuers and non - listed companies and their respective shareholders and representatives of employees , including the information to be provided in the annual reports of the aif they manage . they may specify the types of restrictions or conditions that can be imposed on the marketing of aif to professional investor in the home member state of the aifm . they may specify general criteria for assessing equivalence of valuation standards of third countries where the valuator is established in a third country , the equivalence of legislation of third countries regarding depositaries and , for the purpose of the authorisation of aifm established in third countries , the equivalence of prudential regulation and ongoing supervision . they may specify general criteria for assessing whether third countries grant community aifm effective market access comparable to that granted by the community to aifm from third countries . they may specify the modalities , content and frequency of exchange of information regarding aifm between the competent authorities of the home member state of the aifm and other competent authorities where the aifm individually or collectively with other aifm may have an impact on the stability of systemically relevant financial institutions and the orderly functioning of markets . they specify the procedures for on - the - spot verifications and investigations . they state that the fund valuation standards of a specific third country are equivalent to those applicable in the union where the valuator is established in a third country . they may state that the legislation on depositaries of a specific third country is equivalent to this directive . they may state that the legislation on prudential regulation and ongoing supervision of aifm in a specific third country is equivalent to this directive . they may state whether a specific third country grants community aifm effective market access comparable to that granted by the union to aifm from that third country . they may specify standard models for notification and attestations and to specify the procedure for the exchange of information between competent authorities .


### ucits or their management or investment companies authorised in accordance with directive 2009 / … / ec [ the ucits directive ] ; ### ucits or their management or investment companies authorised in accordance with directive 2009 / … / ec [ the ucits directive ] in so far as those management or investment companies do not manage aif ;


### ' alternative investment fund ' or aif means any collective investment undertaking , including investment compartments thereof whose object is the collective investment in assets and which does not require authorisation pursuant to article 5 of directive 2009 / &#8230 ; / ec [ the ucits directive ] ; ### ' alternative investment fund ' or ' aif ' means any collective investment undertaking which raises capital from a number of investors with a view to investing it in accordance with a defined investment policy on the principle of risk - spreading for the benefit of those investors , including investment compartments of any such undertaking , and which does not require authorisation pursuant to article 5 of directive 2009 / &#8230 ; / ec [ the ucits directive ] ;


### ' marketing ' means any general offering or placement of units or shares in an aif to or with investors domiciled in the community , regardless of at whose initiative the offer or placement takes place ; ### ' marketing ' means any general offering or placement of units or shares in an aif , at the initiative of the aifm managing such aif , to or with investors domiciled in the union ;


### aifm may be authorised to provide management services either for all or certain types of aif . ### aifm may be authorised to provide management services either for all or certain types of aif . an aif may be managed by a single aifm .


### aifm shall , before implementation , notify the competent authorities of the home member state of any change regarding the information provided in their initial application that may substantially affect the conditions under which the authorisation has been granted , in particular changes of the investment strategy and policy of any aif managed by it , of the aif rules or instruments of incorporation and the identity of any further aif the aifm intends to manage . the competent authorities shall , within a month of receipt of that notification , either approve , or impose restrictions , or reject those changes . ### aifm shall , before implementation , notify the competent authorities of the home member state of any material changes to the conditions for initial authorisation or registration , in particular changes in the programme of activity of the aifm or the investment strategy and policy of any aif managed by it . the aifm shall inform the competent authority of any change concerning the persons effectively conducting the business of the aifm . the competent authorities shall , within a month of receipt of that notification , approve , impose restrictions or reject those changes . the competent authorities shall , where duly justified , reject changes regarding the investment strategy and policy of an aif or changes regarding rules or instruments of incorporation if those have been agreed upon by the investors .


### no investor may obtain a preferential treatment , unless this is disclosed in the aif rules or instruments of incorporation . ### no investor may obtain a material preferential treatment vis - à - vis other investors pertaining to the same aif unless the nature and character of that preferential treatment is referred to in the aif rules or instruments of incorporation .


### the commission shall adopt implementing measures further specifying the following : ### the commission is empowered to adopt , in accordance with article 49 of this directive , delegated acts specifying the following :


### the commission shall adopt implementing measures determining : ### the commission is empowered to adopt , in accordance with article 49 of this directive , delegated acts determining :


### the commission shall , in accordance with the procedure referred to in article 49 , adopt implementing measures specifying the following : ### the commission is empowered to adopt , in accordance with article 49 of this directive , delegated acts specifying the following :


### where the value of the portfolios of aif managed by the aifm exceeds eur 250 million , the aifm shall provide an additional amount of own funds ; that additional amount of own funds shall be equal to 0 . 02 % of the amount by which the value of the portfolios of the aifm exceeds eur 250 million . ### where the value of the portfolios of aif managed by the aifm exceeds eur 250 million , the aifm shall provide an additional amount of own funds ; that additional amount of own funds shall be equal to 0 . 02 % of the amount by which the value of the portfolios of the aifm exceeds eur 250 million . however , the required total of the initial capital and the additional amount shall not exceed eur 10 000 000 .