Industry News | To increase support for science and technology enterprises, the China Securities Regulatory Commission issued the "Sixteen Measures for the Capital Market to Serve the High-level Development of Science and Technology Enterprises"

In recent years, the China Securities Regulatory Commission (CSRC) has adhered to its original mission in implementing the registration system reform, guided by supporting technological development to drive key institutional innovation, and gradually formed a regulatory system and market ecosystem that supports technological innovation. In order to implement the Several Opinions of the State Council on Strengthening Supervision and Preventing Risks to Promote the High quality Development of the Capital Market, better serve technological innovation, and promote the development of new productive forces, the China Securities Regulatory Commission has formulated the Sixteen Measures for the High level Development of Technology Enterprises in the Capital Market, proposing supportive measures from all aspects such as listing financing, mergers and acquisitions, bond issuance, and private equity investment. The main contents include:

One is to establish a "green channel" for financing. Strengthen policy coordination with relevant departments, accurately identify technology-based enterprises, improve the "green channel" mechanism, and prioritize supporting technology-based enterprises that break through key core technologies in capital market financing.

The second is to support equity financing for technology-based enterprises. Coordinate and leverage the functions of various sectors, support technology oriented enterprises in their initial public offerings, refinancing, mergers and acquisitions, and overseas listings, and guide private equity venture capital funds to invest in the field of technology innovation. Improve the methods, targets, and implementation procedures of equity incentives for technology-based enterprises.

The third is to strengthen precise support for the bond market. Promote the high-quality development of technology innovation corporate bonds, focus on supporting the financing of high-tech and strategic emerging industry enterprises through bonds, and encourage policy and market institutions to provide credit enhancement support for private technology-based enterprises to issue science and technology innovation bonds for financing.

The fourth is to improve supporting systems for technological innovation. Intensify the innovation of financial products and urge securities companies to enhance their service technology innovation capabilities. Practice the concept of "open door review" and optimize the service mechanism for technology-based enterprises.

Next, the China Securities Regulatory Commission will follow the overall tone of seeking progress while maintaining stability, strengthen organizational implementation and overall coordination, supervise the implementation and refinement of various institutional measures, implement dynamic monitoring, conduct regular evaluations, and optimize relevant measures and arrangements in a timely manner.

Sixteen Measures for the High Level Development of Technology Enterprises Serving Capital Markets

All dispatched agencies, exchanges, subordinate units, associations, and departments within the China Securities Regulatory Commission:

To further improve the functions of the capital market, optimize resource allocation, and provide greater support for the high-level development of technology enterprises, the China Securities Regulatory Commission proposes the following measures.

1、 Concentrate efforts to support major technological breakthroughs. Strengthen policy coordination with relevant departments, accurately identify technology-based enterprises, prioritize supporting technology-based enterprises that break through key core technologies in listing financing, mergers and acquisitions, and bond issuance, and improve the "green channel" mechanism throughout the entire chain.

2、 Improve equity incentives for technology-based enterprises. Support technology-based enterprises to establish equity incentive plans before going public, and continue to implement incentives after going public, encouraging the inclusion of core technical personnel in the incentive scope. Research and optimize the methods, targets, and pricing principles of equity incentives for technology-based enterprises, simplify the implementation process of equity incentives, and quickly introduce exemption provisions for short-term transactions in the implementation process of equity incentives, in order to better play the role of equity incentives.

3、 Deepen the transformation of issuance supervision. Implement various institutional arrangements for the comprehensive implementation of the stock issuance registration system reform, and drive the transformation of system supervision through the transformation of issuance supervision. Scientifically and reasonably maintain the normalization of new stock issuance, leverage the joint efforts of issuance supervision lines, continuously improve audit efficiency and transparency, and meet the financing needs of technology-based enterprises of different types and stages of development.

4、 Optimize the financing environment for technology-based enterprises going public. Support high-quality unprofitable technology-based enterprises with key core technologies, high market potential, and outstanding scientific and technological innovation attributes to go public in accordance with the law and regulations. Further promote the increase of equity asset allocation for various medium and long-term funds. Support technology-based enterprises to go public overseas in accordance with laws and regulations, implement the management system for overseas listing filing, and better support the development of financing for technology-based enterprises going public overseas.

5、 Coordinate and leverage the functional positioning of each sector. Introduce positioning rules for the motherboard sector, highlighting the industry representative "blue chip" characteristics. The Science and Technology Innovation Board adheres to the positioning of "hard technology", and the Growth Enterprise Board serves growth oriented innovative and entrepreneurial enterprises. The Beijing Stock Exchange and National Equities Exchange jointly create a main battlefield for serving innovative small and medium-sized enterprises. Highlighting the positioning of the Science and Technology Innovation Board and the Growth Enterprise Market, setting an upper limit on the application scale, and providing more precise services to early technology-based enterprises. Strengthen guidance and acceptance, acceptance, review, and registration to ensure the positioning of the sector and optimize the structure of newly listed enterprises.

6、 Solidly promote the high-quality development of the Beijing Stock Exchange. Improve the market access tolerance of the Beijing Stock Exchange, and vigorously attract and cultivate a group of innovative small and medium-sized enterprises to go public. Introduce a mechanism for publicly offering convertible bonds by listed companies on the Beijing Stock Exchange. Guide various types of medium - and long-term funds to actively participate in the Beijing Stock Exchange, and research and enrich the index funds and characteristic products of the Beijing Stock Exchange.

7、 Increase support for refinancing of technology-based enterprises. Give full play to the role of the Science and Technology Innovation Board as a "test field", support the development of growth oriented innovation and entrepreneurship enterprises on the ChiNext board, actively research more financing varieties and methods that meet the needs of technology-based enterprises, and study the establishment of storage and issuance systems on the Science and Technology Innovation Board and the ChiNext board. Improve the effectiveness and convenience of refinancing, and guide listed companies to invest the raised funds in relevant fields that are in line with the national economic development strategy and industry orientation.

8、 Promote efficient implementation of mergers and acquisitions by technology-based enterprises. We will continue to deepen the market-oriented reform of mergers and acquisitions, formulate targeted convertible bond restructuring rules, optimize the small and rapid review mechanism, appropriately improve the inclusiveness of restructuring valuations for light asset technology-based enterprises, support technology-based enterprises to comprehensively use various payment tools such as shares, targeted convertible bonds, and cash to implement restructuring, and help technology-based enterprises improve quality and efficiency, become better and stronger.

9、 Strengthen the precise support of the bond market for technological innovation. Promote the high-quality development of technology innovation corporate bonds, and improve the support mechanism for the bond market to serve technology innovation. We will focus on supporting bond financing for high-tech and strategic emerging industry enterprises, and encourage policy and market institutions to provide credit enhancement support for private technology-based enterprises to issue science and technology innovation bonds for financing. Include high-quality enterprise science and technology innovation bonds as benchmark market making varieties, and guide and promote investors to increase investment in science and technology innovation bonds. Support the issuance of REITs in the field of scientific and technological innovation in new infrastructure such as new infrastructure and data centers, as well as in science and technology innovation industrial parks, with conditions in place, and broaden the sources of incremental funding.

10、 Guide private equity venture capital funds to invest in the field of technology innovation. Improve the regulatory measures for private equity funds, enrich product types, promote the development of parent funds, and leverage the role of private equity venture capital funds in promoting the growth of technology-based enterprises. Implement the policy of "reverse linkage" for private equity funds, expand the pilot of physical distribution of stocks and share transfer for private equity venture capital funds to investors, broaden exit channels, and promote a virtuous cycle of "investment exit reinvestment".

11、 Fully leverage the function of regional equity markets to serve and cultivate standardized technology-based enterprises. Steadily expanding the coverage of regional equity market innovation pilot projects, constructing high-quality "specialized, refined, special, and new" special boards, continuously enriching service tools and financing products for technology-based enterprises, gradually promoting the implementation of equity options, equity incentives, and other businesses, and researching ways to strengthen long-term capital support such as government guided funds through preferred shares (rights). Strengthen the interconnection and interoperability between multi-level capital markets, make good arrangements for the connection of enterprise standardized guidance, financing and equity incentive product research and development, data sharing, and make good use of the regional equity market and the New Third Board connection channel and the public announcement and review system.

12、 Increase efforts in financial product innovation. Further enrich the technology innovation index system and develop more indices that reflect the characteristics of science and technology innovation enterprises. Improve the construction of the exchange's supporting product system. Support securities fund management institutions to develop technology themed fund products, improve proactive management capabilities, and actively invest in technology-based enterprises. Enrich the supply of derivatives on the Science and Technology Innovation Board and the Growth Enterprise Board, actively promote the research and development of stock index futures and options for listing on the Science and Technology Innovation 50 and Growth Enterprise Board.

13、 Continuously improving trading mechanisms. Evaluate and optimize the market maker mechanisms of the Science and Technology Innovation Board and the Beijing Stock Exchange, further promote marketization and facilitation, and improve market price discovery and resource allocation efficiency. Improve the relevant rules for margin trading, securities lending, and refinancing.

14、 Urge securities companies to enhance their service technology innovation capabilities. Promote the high-quality development of securities companies, focus on their main responsibilities and businesses, strengthen professional capacity building, promote functional utilization, and provide services such as equity financing, bond financing, mergers and acquisitions, market making transactions, risk management, and wealth management for technology-based enterprises, helping to build a diversified relay financial service system.

15、 Optimize the service mechanism for technology-based enterprises. Practice the concept of "open door review", improve the pre communication mechanism for listing and refinancing of technology-based enterprises, and enhance the convenience and effectiveness of consulting for technology-based enterprises. Strengthen market cultivation and overall planning, and improve the efficiency of serving technology-based enterprises in key areas.

16、 Consolidate the responsibilities of all parties involved. Adhere to the principle of "declaration is responsibility", strictly enforce the responsibilities of technology-based enterprises and related intermediary institutions that plan to issue securities, ensure the authenticity, accuracy, and completeness of information disclosure, strictly crack down on illegal, irregular, and fraudulent issuance of securities in accordance with the law, and protect the legitimate rights and interests of investors.

China Securities Regulatory Commission

April 19, 2024