Shanghai: Promote the Science and Technology Innovation Board to continue to deepen reforms and continue to expand the scope of application of the fifth set of listing standards on the Science and Technology Innovation Board

The Zhitong Finance App learned that recently, the Finance Committee Office of the Shanghai Municipal Committee of the Communist Party of China, the Shanghai Development and Reform Commission and other departments issued “Certain Measures to Further Strengthen Technology Finance Services by Fully Utilizing the Direct Financing Function in Shanghai”, which proposes to push the Science and Technology Innovation Board to continue to deepen reforms. Promote the introduction of a fifth set of standard listing review guidelines for enterprises such as artificial intelligence and low-altitude economy on the Science and Technology Innovation Board, promote the listing of enterprises in emerging industries and future industries such as controlled nuclear fusion, physical intelligence, big models, quantum computing, and brain-computer interfaces on the Science and Technology Innovation Board, continue to expand the scope of application of the fifth set of listing standards on the Science and Technology Innovation Board, and enhance the institutional inclusiveness and adaptability of the capital market to unprofitable enterprises in the cutting-edge technology sector. Make good use of the pilot IPO pre-review mechanism for high-quality technology companies, and promote the further improvement of the communication mechanism between the Shanghai Stock Exchange and high-quality investment institutions and professional investors.

Facilitate the refinancing of technology companies. Make good use of refinancing support policies, optimize the refinancing review process and refinancing time interval, allow companies listed according to unprofitable standards and enterprises with breakouts to refinance, optimize refinancing application materials, etc., and support technology enterprises to flexibly use various tools such as issuance, allotment of shares, and convertible bonds for financing. Promote the implementation of the refinancing reserve issuance system.

Deepen the construction of a “technology board” for the bond market. Promote the implementation of policy instruments such as scientific and technological innovation and private enterprise bond risk sharing instruments and national financing guarantee funds in Shanghai, encourage financial institutions to create credit risk mitigation tools, form a collaborative credit enhancement system between the central government and the local authorities, and support the issuance of science and technology innovation bonds. Support more eligible companies to issue science and technology innovation bonds. Deepen innovation in science and technology innovation bond products, and support more technology companies to issue equity bond-related products such as science and innovation convertible bonds.

The original text is as follows:

Notice on Issuing “Certain Measures to Further Strengthen Technology Finance Services by Taking Full Advantage of Direct Financing Functions in Shanghai”

All relevant units:

In order to further implement the spirit of “Several Policy Initiatives to Accelerate the Construction of a Technology Finance System to Strongly Support High-Level Technological Self-reliance and Self-Improvement” by seven departments including the Ministry of Science and Technology, and to further implement the Municipal Government General Office's “Certain Measures on Further Promoting the High-Quality Development of Shanghai's Equity Investment Industry” and “Implementation Opinions on Further Exploiting the Role of the Capital Market to Promote High-Quality Development of Science and Innovation Enterprises”, give full play to the advantages of the city's direct financing function and strengthen financial services for technology enterprises throughout the life cycle, with the approval of the municipal government, “Shanghai will give full play to its direct financing function and further strengthen technology finance “Certain Service Measures” have been issued to you, so please follow them carefully.

Certain Measures to Further Strengthen Technology Finance Services by Taking Full Advantage of Direct Financing Functions in Shanghai

In order to thoroughly implement the spirit of the 20th National Congress and the 20th Plenary Session of the Party, accelerate self-reliance and self-improvement in high-level technology, give full play to the advantages of our city's direct financing function, strengthen financial services for technology enterprises throughout the life cycle, and solidly promote the joint development of the Shanghai International Financial Center and the Science and Technology Innovation Center, the following measures have been formulated:

1. Improve early investment lead pricing capabilities

(1) Enhance the function of angel investment social organizations. Strengthen the integration and empowerment of state-owned assets to create an upgraded version of the Shanghai Angel Club. Take the lead in exploring the formation of “qualified angel investors” certification standards, promote facilitation of personnel settlement, medical services, etc., and promote the gathering of angel investors in Shanghai. Establish an angel investment circulation mechanism by comprehensively using various methods such as share transfers, S fund transactions, and corporate listings. (The Finance Office of the Municipal Committee, the Municipal State-owned Assets Administration Commission, and the Municipal Talent Bureau according to the division of responsibilities)

(2) Optimizing the funding mechanism for angel investment. Explore state-owned capital, social capital, etc. to provide financial support for early science and innovation projects in the form of charitable donations, etc. Support industrial capital to invest in seed funds, angel funds and early-stage projects, and provide policy support to affiliated industrial groups according to law and regulations. Encourage all types of guidance funds and parent funds in our city to support angel investment funds focusing on hard technology and long-term investment. (Municipal State-owned Assets Administration Commission, Municipal Economic and Credit Commission, Municipal Bureau of Planning and Natural Resources, Municipal Bureau of Ecology and Environment, Municipal Development and Reform Commission, Municipal Science and Technology Commission, and Municipal Finance Bureau according to division of responsibilities)

(3) Strengthen the leading function of state-owned capital. Accelerate the establishment of the Shanghai Social Security Science and Technology Innovation Fund, select professional market-based investment institutions to set up special sub-funds, and create a “weather vane” for leading investment pricing. Support early-stage investment institutions and teams with strong ability to accurately identify leading investment pricing, such as the Yangtze River Delta Venture Capital Guidance Fund and the Future Industry Fund, and support the selection of sub-funds. Our city's equity investment agglomeration area strengthens comprehensive services to attract high-quality early-stage investment institutions and teams to develop and gather in Shanghai. Early investment institutions are encouraged to cooperate and connect with our city's proof-of-concept platforms, etc., to guide capital investment to key stages such as “pilot testing - industrialization”, and provide sufficient financial support for technology enterprises to achieve leapfrog development. (Municipal State-owned Assets Administration Commission, Municipal Finance Bureau, Municipal Finance Office, Municipal Development and Reform Commission, Municipal Science and Technology Commission according to division of responsibilities)

(4) Improve evaluation and pricing mechanisms. Support technology exchanges, data exchanges, etc. to gather data on R&D, patents, talents, etc. of early technology enterprises, and provide convenient and efficient search and application services for investment institutions. Play the role of Shanghai as a starting community for the future, and connect various actors such as scientists, entrepreneurs, and investors to support investment institutions' understanding and understanding of cutting-edge technology and future industries, and strengthen their ability to make decisions and lead investments. Encourage professional research teams such as securities companies to extend their coverage to the primary market in research fields to enhance value discovery, valuation and pricing capabilities for early science and innovation projects. (Municipal Data Bureau, Municipal Economic and Credit Commission, Municipal Science and Technology Commission, Shanghai Securities Regulatory Bureau according to division of responsibilities)

2. Establish and improve the equity investment continuity mechanism

(5) Establish a long-term mechanism for continuous investment. Accelerate cooperation with the National Social Security Foundation to establish funds for selected projects, and establish a long-term mechanism for capital relay and collaborative empowerment. Research the establishment of S parent funds, guide more S funds to gather in Shanghai, and attract various entities such as insurance companies, financial asset investment companies (AIC), and financial asset management companies (AMC) to invest in the establishment of S funds or participate in share transactions. Explore promoting the inclusion of S funds in the scope of nested tier exemptions. (Municipal State-owned Assets Administration Commission, Municipal Finance Office, Municipal Finance Bureau, Municipal Development and Reform Commission, Municipal Economic and Credit Commission, Shanghai Securities Regulatory Bureau, Shanghai Branch of the People's Bank of China, Shanghai Financial Supervision Bureau according to division of responsibilities)

(6) Enhance the functionality of the fund share transfer platform. Enhance the functions of the Shanghai private equity and venture capital share transfer platform, create an upgraded version of the private equity secondary market, improve the fund share valuation system based on large models, blockchain, etc., and encourage innovative transactions such as continuous and restructuring. Explore expanding the scope of share transfer platform transfer services to the whole country to attract various types of state-owned assets and market-based share listing transactions. Support the exit of our municipal government's investment funds, state-owned funds, and corporate shares through share transfer platforms, improve the valuation transaction process, improve exit efficiency, and help standardize related transactions and raise the level of compliance. (The Finance Office of the Municipal Committee, the Shanghai Securities Regulatory Bureau, the Municipal Finance Bureau, and the Municipal State-owned Assets Administration Commission according to the division of responsibilities)

(7) Improve the technology merger and acquisition ecosystem. Continue to strengthen the disclosure of audit standards for mergers and acquisitions of listed companies and technology enterprises, and support both parties to the transaction to negotiate and determine transaction prices based on diversified evaluation methods. Use the functions of a third-party market-based service platform to build a science and technology enterprise merger and acquisition case library and valuation database. Promote the implementation of typical cases where technology companies apply simple review procedures, and encourage third party mergers and acquisitions. Do a good job in national M&A fund matchmaking services, give full play to the role of our city's state-owned M&A fund matrix, attract market-based M&A funds, and carry out M&A transactions around the technology enterprise industry chain. Domestic insurance companies are encouraged to develop technical cooperation with overseas institutions to develop and launch localized M&A insurance products. (Municipal Committee Finance Office, Municipal Economic and Credit Commission, Municipal Science and Technology Commission, Shanghai Securities Regulatory Bureau, Shanghai Financial Supervisory Authority, Shanghai Stock Exchange, Municipal Development and Reform Commission, and Municipal State-owned Assets Administration Commission according to division of responsibilities)

(8) Optimizing investment relays in the primary and secondary markets. Do a good job of standardizing and cultivating key hard technology enterprises on the Science and Technology Innovation Board, communicating and coordinating overseas listings, and promoting enterprise information by GEM local governments. The city works together to provide corporate compliance guidance to support key technology enterprises in our city to connect with domestic and foreign capital markets. Optimize the listing counseling system for technology companies, integrate intermediary agency resources, and provide accurate capital market training and matchmaking services. Support the establishment of cornerstone investment funds and provide facilities such as review, filing, and exchange for their cross-border investments. Asset management institutions such as public funds and bank wealth management are encouraged to set up more science and innovation themed ETF funds, science and technology innovation wealth management products, etc., to cultivate technology investment power in the secondary market. (The Finance Office of the Municipal Committee, the Municipal Economic and Credit Commission, the Municipal Science and Technology Commission, the Municipal Development and Reform Commission, the Shanghai Securities Regulatory Bureau, the Shanghai Financial Supervisory Authority, and the Shanghai Stock Exchange according to the division of responsibilities)

(9) Strengthen the linkage between direct financing and indirect financing. Support financial institutions to strengthen “credit+financial management subsidiary+AIC+ investment bank” collaboration within the group and strengthen the “loan+direct external investment” linkage. Encourage insurance institutions to explore and launch technology insurance products such as intellectual property infringement liability insurance, R&D interruption insurance, accident insurance for key R&D personnel, and industrial chain “chain owner” insurance. Guide financial leasing institutions to step up efforts to provide leasing services for production and R&D equipment to technology enterprises. Strengthen supply chain finance services for technology enterprises, rely on the shipping trade chain to promote information on-chain and open data sharing on key links such as orders, logistics, and warehousing, and support financial institutions to carry out accounts receivable pledge financing and order financing. (The Shanghai Financial Supervisory Authority, the Shanghai Branch of the People's Bank of China, the Finance Office of the Municipal Committee, the Municipal Economic and Credit Commission, and the Municipal Data Bureau according to the division of responsibilities)

III. Play a key pivotal role in the capital market

(10) Promote the Science and Technology Innovation Board to continue to deepen reforms. Promote the introduction of a fifth set of standard listing review guidelines for enterprises such as artificial intelligence and low-altitude economy on the Science and Technology Innovation Board, promote the listing of enterprises in emerging industries and future industries such as controlled nuclear fusion, physical intelligence, big models, quantum computing, and brain-computer interfaces on the Science and Technology Innovation Board, continue to expand the scope of application of the fifth set of listing standards on the Science and Technology Innovation Board, and enhance the institutional inclusiveness and adaptability of the capital market to unprofitable enterprises in the cutting-edge technology sector. Make good use of the pilot IPO pre-review mechanism for high-quality technology companies, and promote the further improvement of the communication mechanism between the Shanghai Stock Exchange and high-quality investment institutions and professional investors. (Shanghai Stock Exchange, Shanghai Securities Regulatory Bureau, Municipal Finance Office, Municipal Economic and Credit Commission, and Municipal Science and Technology Commission according to division of responsibilities)

(11) Facilitate the refinancing of technology enterprises. Make good use of refinancing support policies, optimize the refinancing review process and refinancing time interval, allow companies listed according to unprofitable standards and enterprises with breakouts to refinance, optimize refinancing application materials, etc., and support technology enterprises to flexibly use various tools such as issuance, allotment of shares, and convertible bonds for financing. Promote the implementation of the refinancing reserve issuance system. (The Shanghai Securities Regulatory Bureau, the Shanghai Stock Exchange, and the Finance Office of the Municipal Committee are divided according to the division of responsibilities)

(12) Deepen the construction of a “technology board” for the bond market. Promote the implementation of policy instruments such as scientific and technological innovation and private enterprise bond risk sharing instruments and national financing guarantee funds in Shanghai, encourage financial institutions to create credit risk mitigation tools, form a collaborative credit enhancement system between the central government and the local authorities, and support the issuance of science and technology innovation bonds. Make good use of our city's relevant interest rate discount policies and support more eligible enterprises to issue science and technology innovation bonds. Deepen innovation in science and technology innovation bond products, and support more technology companies to issue equity bond-related products such as science and innovation convertible bonds. (The Finance Office of the Municipal Committee, the Municipal Science and Technology Commission, the Shanghai Branch of the People's Bank of China, the Shanghai Securities Regulatory Bureau, the Shanghai Financial Supervisory Authority, the Municipal Finance Bureau, and the Shanghai Stock Exchange according to the division of responsibilities)

4. Enrich and diversified long-term capital supply

(13) Expand sources of financial capital. After exploring relevant decision-making procedures, conditions such as differentiated state-owned investment ratios and threshold returns are set for outstanding fund managers to actively attract social security funds, insurance funds, etc. to invest in the establishment of equity investment funds in our city. Guide long-term capital such as insurance and pensions to expand the scale of participation in early stage technology enterprise financing through “preferred share+convertible bonds”. Explore the issuance of structured technology finance products, drawing on the risk stratification design of catastrophe bonds. Encourage our state-owned funds to cooperate with AIC to establish equity investment funds. (The Finance Office of the Municipal Committee, the Municipal State-owned Assets Administration Commission, the Shanghai Securities Regulatory Bureau, the Shanghai Financial Supervisory Authority, the Municipal People's Social Affairs Bureau, the Municipal Finance Bureau, and the Shanghai Branch of the People's Bank of China according to the division of responsibilities)

(14) Expand investment in industrial capital. Promote “chain owner” enterprises, listed companies, etc. to actively develop corporate venture capital (CVC), and increase support for CVC in equity investment clusters. Relying on mechanisms such as the Equity Investment Fund Fast Track to improve the efficiency of CVC implementation services. Encourage CVC to provide comprehensive “capital+technology+market” capabilities to upstream and downstream startups in the industrial chain. Support CVC to rely on the parent company's industrial advantages and international layout, help investee companies link overseas markets and financing channels, carry out strategic mergers and acquisitions and industrial integration, and provide facilitation support in cross-border capital flows, etc. Promote CVC's participation in the formulation of global industrial investment standards, support it to establish cross-border industrial funds with overseas Chinese enterprises, and build a global technology investment network. Encourage CVC established by central enterprises in Shanghai to cooperate with local government guidance funds and social capital in our city to jointly establish special sub-funds focused on filling gaps in the supply chain and overcoming “stuck necks” technology. (The Municipal Economic and Credit Commission, the Municipal State-owned Assets Administration Commission, the Municipal Finance Office, the Municipal Development and Reform Commission, and each equity investment agglomeration area are divided according to responsibilities)

(15) Encourage the efficient use of foreign capital. Deepen qualified overseas limited partner (QFLP) pilot projects, give full play to the local resource advantages of state-owned fund managers, promote the “foreign internal management” model, and attract high-quality overseas capital. Explore the introduction of offshore RMB funds from abroad to support domestic scientific and technological innovation. For foreign investment management agencies with mature operation and good reputation, promote the optimization of the establishment of approval processes, improve the facilitation of exchange of foreign exchange funds, and strengthen operational guidance on tax compliance. (The Finance Office of the Municipal Committee, the Shanghai Branch of the People's Bank of China, the Municipal Commission of Commerce, the Municipal Market Supervision Bureau, and the Municipal Taxation Bureau according to the division of responsibilities)

5. Optimizing the supporting system environment

(16) Optimizing funding requirements for government investment funds and state-owned funds. Government investment fund management requirements are set according to different positioning categories, government investment ratios are reasonably determined, resource sharing and coordination are promoted, social capital is encouraged to actively participate in investment, and the formation of a fund ecosystem that matches the entire life cycle of the industry. Venture capital funds and investment funds in strategic emerging industries that support the key development of the country and our city are appropriately extended, and venture capital funds are actively promoted as patient capital to invest in early, small, and hard technology. (Municipal Finance Bureau, Municipal State-owned Assets Administration Commission, Municipal Development and Reform Commission, and Municipal Science and Technology Commission according to division of responsibilities)

(17) Improve the comprehensive performance evaluation system for government investment funds and state-owned investment funds. Promote the establishment of a cross-cycle long-term assessment mechanism, establish a comprehensive evaluation framework covering economic and social benefits, short-term returns and long-term values, and comprehensively consider financial indicators and non-financial indicators. Carry out credit information registration and investment evaluation work for government investment funds in an orderly manner, scientifically guide social capital investment into key areas and areas in urgent need, and prevent overcapacity and repeated construction at a low level. Implement the “Trial Measures on Assessment, Evaluation and Due Diligence Exemption of Private Equity Investment Funds Supervised by the Municipal State-owned Assets Administration Commission”, and push relevant enterprises to formulate rules such as due diligence exemption lists. Strengthen coordination mechanisms among departments such as state-owned assets, finance, and auditing. (Municipal Finance Bureau, Municipal State-owned Assets Administration Commission, Municipal Development and Reform Commission, Municipal Audit Bureau according to division of responsibilities)

(18) Deepen the construction of digital intelligence in technology finance. Investment institutions are encouraged to step up the application of fintech and use technologies such as artificial intelligence models and smart devices to enhance investment and research capabilities. Explore new paradigms of artificial intelligence to empower scientific research, push state-owned funds to raise the level of intelligence in investment operations, strengthen monitoring of key aspects such as investment decisions, post-investment management, and project exit, establish and improve fund risk warning and prevention mechanisms, and create “agile capital” that conforms to the laws of scientific and technological innovation. (The Finance Office of the Municipal Committee, the Municipal State-owned Assets Administration Commission, and the Shanghai Securities Regulatory Bureau according to the division of responsibilities)

(19) Build a direct financing pilot zone. Relying on our city's equity investment agglomeration areas and high-energy science and innovation clusters such as Zhangjiang Science City and Dazeruo Bay, we plan to build a direct financing pilot zone. Establish a policy evaluation and feedback mechanism, regularly sort out policy implementation blockages, promote timely resolution of implementation, and summarize and form empirical practices that can be replicated and promoted. Promote the formation of a high concentration of capital, talent, technology, and information within the pilot zone, and build a full-chain financing service system covering everything from “0 to 1” concept verification, to “1 to 10” incubation acceleration, to “10 to 100” industrial expansion. (The Finance Office of the Municipal Committee, the Municipal Science and Technology Commission, the Municipal Development and Reform Commission, the Municipal Economic and Credit Commission, the Municipal State-owned Assets Administration Commission, and the Shanghai Securities Regulatory Bureau according to the division of responsibilities)

(20) Strengthen data analysis and monitoring and early warning capabilities. Strengthen data analysis and trend research on direct financing, and do a good job of publicity and guidance. Strengthen follow-up and judgment on all aspects of private equity fund investment management and withdrawal, continue to promote the construction of a financial risk monitoring and early warning system in Shanghai, and enhance risk warning capabilities. (The Financial Services Office of the Municipal Committee, the Shanghai Securities Regulatory Bureau, the Shanghai Branch of the People's Bank of China, and the Shanghai Financial Supervisory Authority according to the division of responsibilities)

This article was selected from “Shanghai Finance Official WeChat”, editor of Zhitong Finance: Jiang Yuanhua.