China Securities Regulatory Commission issued “Implementation Opinions on the “Five Major Articles” on Good Finance in the Capital Market

The Zhitong Finance App learned that on February 7, the China Securities Regulatory Commission issued the “Implementation Opinions on the “Five Major Articles” on Good Finance in the Capital Market. Among them, it was mentioned that systems such as mergers, acquisitions and restructuring of technology-based listed companies and equity incentives should be optimized. Implement the “Opinions on Deepening Market Reform of M&A and Restructuring of Listed Companies”, and take more measures to revitalize the M&A and restructuring market. Encourage technology-based enterprises to carry out mergers and acquisitions in upstream and downstream industries in the same industry, and support listed companies to carry out mergers, acquisitions and restructuring around industrial transformation and upgrading and finding a second growth curve. Support listed companies to acquire high-quality unprofitable assets that help strengthen the chain and improve key technical levels. Support technology-based enterprises to rationally carry out cross-border mergers and acquisitions. Improve the inclusiveness of mergers, acquisitions and restructuring valuations of technology-based enterprises, and support the adoption of diversified valuation methods adapted to the characteristics of new productivity.

Among them, it was mentioned that private equity venture capital funds should be guided to invest early, small, long-term, and hard technology. Implement the policies and arrangements of the General Office of the State Council to promote the high-quality development of venture capital, clear diversified exit channels for private equity venture capital funds, and promote a virtuous cycle of “fundraising, investment management and withdrawal.” Optimize the exit of private equity venture capital funds from the “reverse linking” policy. Promote a pilot project for private equity venture capital funds to distribute shares in kind to investors. Research and improve the private equity venture capital fund share transfer system mechanism. Support the development of private equity secondary market funds (S funds). Support direct equity investment pilot projects for financial asset investment companies. Expand the funding sources of private equity venture capital funds through multiple channels, make greater efforts to attract social capital participation, and actively develop patient capital.

Among them, it was also mentioned that high-quality technology-based enterprises are issued and listed. Continue to promote the implementation of a package of policies and measures such as the “16 Measures on Servicing the High-Level Development of Technology Enterprises in the Capital Market” and “Eight Measures on Deepening the Reform of the Science and Technology Innovation Board to Serve Scientific and Technological Innovation and the Development of New Quality Productivity”. Adhere to the “four directions”, further enhance inclusiveness for new industries, new business formats and new technologies, and increase support for strategic industries such as next-generation information technology, artificial intelligence, aerospace, new energy, new materials, high-end equipment, biomedicine, and quantum technology. Actively explore ways to combine an effective market with a promising government, further improve the institutional mechanism for accurately identifying technology-based enterprises, and more strongly support the issuance and listing of technology-based enterprises breaking through key core technologies in new industries, new business formats, and new technology fields. Continue to support the issuance and listing of high-quality unprofitable technology-based enterprises.

The original text is as follows:

The China Securities Regulatory Commission issued “Implementation Opinions on the Capital Market's “Five Major Articles” to do a good job in finance

In order to thoroughly implement the requirements of the Third Plenary Session of the 20th CPC Central Committee, the Central Financial Work Conference, the Central Economic Work Conference, and the new “National Nine Rules” on doing a good job in technology finance, green finance, inclusive finance, pension finance, and digital finance, actively play the functions of the capital market and improve the quality and efficiency of serving the real economy, the China Securities Regulatory Commission formulated the “Five Major Articles” (hereinafter referred to as the “Implementation Opinions”).

The “Implementation Opinions” focus on supporting the development of new quality productivity, highlighting deepening comprehensive capital market investment and financing reforms, enhancing the inclusiveness and adaptability of the system, and promoting the concentration of factor resources in major strategies, key areas, and weak links such as scientific and technological innovation, advanced manufacturing, green and low-carbon, and people's livelihood inclusion. Eighteen policy measures have been proposed to strengthen financial services throughout the entire life cycle of technology-based enterprises, enrich the capital market's product system to promote green and low-carbon transformation, enhance the efficiency of capital market services and financial inclusion, promote the capital market to better meet diversified pension finance needs, accelerate the promotion of digitalization and intelligence to empower the capital market, strengthen the “Five Big Articles” service capabilities of industry institutions, and enhance the capital market's “Five Major Articles” in finance.

In the next step, the China Securities Regulatory Commission will adhere to steady progress and promote stability through progress, coordinate all tasks of risk prevention, strong supervision, and promotion of high-quality development, strengthen policy coordination, organizational implementation, publicity and guidance, solidly push the capital market to do a good job in the “Five Major Articles” of finance, and better serve the overall situation of Chinese-style modernization and high-quality economic and social development.

Implementation opinions on the “Five Big Articles” on how to do a good job in finance in the capital market

All agencies, exchanges, subordinate units, associations, departments and bureaus of the China Securities Regulatory Commission:

In order to thoroughly implement the spirit of the Third Plenary Session of the 20th CPC Central Committee, the Central Financial Work Conference, the Central Economic Work Conference and the “Certain Opinions of the State Council on Strengthening Supervision and Risk Prevention to Promote High-Quality Development of the Capital Market” (Guofa (2024) No. 10), actively play the functions of the capital market, focus on the “five major articles” of technology finance, green finance, inclusive finance, pension finance, and digital finance to better serve high-quality economic and social development, this implementation opinion was formulated.

I. General Requirements

Guided by Xi Jinping's ideology of socialism with Chinese characteristics in the new era, fully implement the spirit of the 20th National Congress and the Second and Third Plenums of the 20th CPC Central Committee, fully and accurately implement the new development concept, focus on building institutional mechanisms to support comprehensive innovation and the development of new quality productivity, deepen financial supply-side structural reforms, improve the basic system of the capital market, enhance inclusiveness and adaptability, strengthen the function of the capital market in promoting capital formation and optimizing resource allocation, and promote the gathering of factor resources into major strategies, key areas, and weak links such as scientific and technological innovation, advanced manufacturing, green and low-carbon, and inclusive people's livelihood. Meet the demand for high-quality financial services for high-quality development and help Chinese-style modernization.

——Adhere to political leadership and serve the overall situation. Deeply grasp the political and popular nature of capital market work, adhere to the natural duty of serving the real economy, establish the concept of finance for the people, and provide higher quality and more efficient financial services for economic and social development.

——Adhere to problem orientation and precise policies. Focus on key points, strive for practical results, focus on opening up the capital market to do a good job in the “Five Big Articles” of finance, create a good institutional environment, improve the accuracy and effectiveness of policies, and promote a virtuous economic and financial cycle.

——Adhere to integrity, innovation, and progress steadily. Make good use of the “key measure” of reform and insist on promoting capital market innovation and development on the path of market-based legalization. Handle the relationship between the government and the market, deepen comprehensive capital market investment and financing reforms, and strengthen risk prevention, control and regulatory capacity building.

——Adhere to system integration and collaboration. To do a good job in the “five major articles” on finance, the capital market must not only focus on each article, but also focus on systemicity, integrity, and synergy, and strengthen coordination and links with policies in the fields of finance, finance, taxation, industry, etc.

II. Strengthen financial services throughout the entire life cycle of technology-based enterprises

(1) Support the issuance and listing of high-quality technology-based enterprises. Continue to promote the implementation of a package of policies and measures such as the “16 Measures on Servicing the High-Level Development of Technology Enterprises in the Capital Market” and “Eight Measures on Deepening the Reform of the Science and Technology Innovation Board to Serve Scientific and Technological Innovation and the Development of New Quality Productivity”. Adhere to the “four directions”, further enhance inclusiveness for new industries, new business formats and new technologies, and increase support for strategic industries such as next-generation information technology, artificial intelligence, aerospace, new energy, new materials, high-end equipment, biomedicine, and quantum technology. Actively explore ways to combine an effective market with a promising government, further improve the institutional mechanism for accurately identifying technology-based enterprises, and more strongly support the issuance and listing of technology-based enterprises breaking through key core technologies in new industries, new business formats, and new technology fields. Continue to support the issuance and listing of high-quality unprofitable technology-based enterprises. Improve information disclosure rules for technology-based enterprises. Optimize the IPO underwriting mechanism, dynamically evaluate the effects of the Science and Technology Innovation Board's pilot implementation of the deepening issuance and underwriting system, and expand the scope of application in due course. Steadily promote the implementation of the “light asset, high investment in R&D” certification standards, and the publication and implementation of the refinancing reserve issuance system. Guide technology-based enterprises to make rational use of the “two markets and two resources” of domestic and foreign listings, and support high-quality technology-based enterprises listed overseas to return to A-shares.

(2) Optimizing systems such as mergers, acquisitions and restructuring of technology-based listed companies, and equity incentives. Implement the “Opinions on Deepening Market Reform of M&A and Restructuring of Listed Companies”, and take more measures to revitalize the M&A and restructuring market. Encourage technology-based enterprises to carry out mergers and acquisitions in upstream and downstream industries in the same industry, and support listed companies to carry out mergers, acquisitions and restructuring around industrial transformation and upgrading and finding a second growth curve. Support listed companies to acquire high-quality unprofitable assets that help strengthen the chain and improve key technical levels. Support technology-based enterprises to rationally carry out cross-border mergers and acquisitions. Improve the inclusiveness of mergers, acquisitions and restructuring valuations of technology-based enterprises, and support the adoption of diversified valuation methods adapted to the characteristics of new productivity. Improve the rules of the merger and absorption system and support listed companies to carry out mergers and acquisitions. Technology-based listed companies are encouraged to comprehensively use various payment instruments such as shares, targeted convertible bonds, and cash to implement mergers, acquisitions and restructuring, and establish an installment payment mechanism for share consideration. Promoting the implementation of simple procedures for mergers, acquisitions and restructuring reviews has been effective. Encourage the development of M&A funds. Compile more science and technology innovation indices, and develop more science and technology innovation-themed public funds and related futures options products. Enhance the inclusiveness and flexibility of equity incentives for technology-based enterprises, optimize implementation procedures and reserve equity arrangements, and apply short-term transactions and window periods to optimize the granting and ownership of equity incentives.

(3) Guide private equity venture capital funds to invest early, small, long-term, and hard technology. Implement the policies and arrangements of the General Office of the State Council to promote the high-quality development of venture capital, clear diversified exit channels for private equity venture capital funds, and promote a virtuous cycle of “fundraising, investment management and withdrawal.” Optimize the exit of private equity venture capital funds from the “reverse linking” policy. Promote a pilot project for private equity venture capital funds to distribute shares in kind to investors. Research and improve the private equity venture capital fund share transfer system mechanism. Support the development of private equity secondary market funds (S funds). Support direct equity investment pilot projects for financial asset investment companies. Expand the funding sources of private equity venture capital funds through multiple channels, make greater efforts to attract social capital participation, and actively develop patient capital.

(4) Increase support for scientific and technological innovation in the multi-level bond market. Promote the high-quality development of science and technology innovation corporate bonds, optimize the issuance and registration process, encourage relevant institutions to provide credit enhancement support for technology enterprise bonds in accordance with the principles of marketization and legalization, and explore the development of more science and innovation themed bonds. Include high-quality enterprise science and innovation bonds as benchmark market-making varieties, and increase policy support for exchange pledged repurchase discount factors. Explore the intellectual property asset securitization business. Support the issuance of real estate investment trust funds (REITs) for new infrastructure such as artificial intelligence, data centers, smart cities, and science and technology innovation industrial parks to promote the revitalization of existing assets and support the digital transformation of traditional infrastructure.

3. Enrich the capital market's product system system to promote green and low-carbon transformation

(5) Improve the capital market green finance standard system. Continuously optimize green bond standards, unify the use of capital raised, information disclosure and regulatory requirements, and study and improve evaluation and certification standards. Rating agencies are encouraged to include environmental information indicators in bond issuance rating methods. Implement the exchange's sustainable information disclosure rules and continue to strengthen the information disclosure requirements for listed companies to implement green development. Research and strengthen the construction of a sustainable rating and certification system, and improve supervision mechanisms. Actively participate in the formulation of international sustainability guidelines and promote the International Sustainability Standards Council to further enhance the inclusiveness and operability of the standards. Research and formulate green stock standards and unify business rules. Promote the improvement of the green finance statistics system.

(6) Enrich the capital market with green finance products. Support eligible green industry enterprises to issue listings, finance mergers and acquisitions, and issue green bonds and green asset-backed securities. Further enhance the convenience of accepting green bond applications, reviewing and registering them. Launch more green themed public funds. Encourage the development of green private equity venture capital funds. Promote the construction of a carbon futures market and the development and listing of carbon emission rights futures in a steady and orderly manner, and support eligible financial institutions to participate in carbon emission rights trading on the premise that they comply with the law and that risks are manageable. Develop more types of green and low-carbon futures options that meet the needs of the real economy. Support the Guangzhou Futures Exchange to build a green futures exchange. Enrich the green index system and its derivatives. Continue to deepen green international cooperation and promote the two-way opening of the green securities market.

IV. Improving the efficiency of capital market services and financial inclusion

(7) Improve institutional arrangements for capital markets to serve micro, small and medium-sized enterprises. Further promote the Beijing Stock Exchange and the New Third Board of inclusive finance pilot projects, and support the listing of high-quality small and medium-sized enterprises such as “specialized, special and new”. Accelerate the establishment of a statistical evaluation system for inclusive financial services from the Beijing Stock Exchange and the New Third Board, play the “baton” role of evaluation, guide market institutions to lean resources towards inclusive financial services, and increase the docking services for micro, small and medium-sized enterprises. Standardize the development of regional equity markets, improve the comprehensive services of “specialized, special and new” special boards, and strengthen organic links with national stock exchanges. Promote the interface of regional equity market rules and the unification of standards.

(8) Enrich the ways in which the capital market serves agricultural entities. Improve the “insurance+futures” model, steadily promote normalized operation, promote more capital participation, and expand the implementation area according to local conditions. Support the development of agricultural futures options varieties. Actively develop rural revitalization company bonds, further enhance the convenience of review and registration, and support enterprises to issue bonds for use in modern rural industries and integrated development of rural industries. Support agricultural science and technology enterprises to grow bigger and stronger through capital markets, and research and compile indices reflecting rural revitalization, modern agriculture, animal husbandry and aquaculture, etc., focusing on the “three rural areas”.

(9) Better meet the diversified investment needs of residents. Promote securities fund management institutions to speed up the transformation of wealth management. Enrich the spectrum of public fund products with different risk-return characteristics. Steadily reduce comprehensive rates in the public fund industry, standardize the fee mechanism for fund sales, and guide short-term transaction funds to long-term allocation of funds. Improve the rules of the investment advisory system, promote the transformation of public fund investment business from pilot to routine, explore the establishment of industry practice standards, cultivate and expand the talent pool, and expand the range of investable products in an orderly manner.

5. Promote the capital market to better meet diversified pension finance needs

(10) Steady value-added goals for medium- to long-term capital such as service pensions. Implement the “Guiding Opinions on Promoting the Entry of Medium- and Long-Term Funds into the Market” and the implementation plan to break up the blockages of medium- and long-term capital entry cards such as social security, insurance, and financial management. Promote the inclusion of eligible equity public funds such as index funds in the scope of personal pension investments. Promote the improvement of the insurance fund equity investment supervision system, better encourage and guide insurance companies to carry out long-term equity investments, and expand the scope of insurance funds to carry out pilot long-term stock investment. Support qualified employers to explore and liberalize individual enterprise annuity choices, and encourage enterprise annuity fund managers to explore and develop differentiated investments. Support various medium- and long-term funds to carry out hedging transactions for financial futures and derivatives. Promote investors from various professional institutions to establish and improve long-term assessment mechanisms for at least three years.

(11) Provide high-quality pension financial products and services. Support equity and bond financing for eligible health and pension economy enterprises, and explore the issuance of asset-backed securities and REITs using pension facilities as basic assets. Support public fund management companies to set up subsidiaries specializing in pension finance services. Promote securities fund management institutions to step up their aging-friendly transformation of business outlets, service apps, etc. Strengthen the popularization and education of the elderly in financial knowledge to protect the legitimate rights and interests of elderly investors.

6. Accelerate the promotion of digitalization and intelligence to empower the capital market

(12) Raise the level of digitalization in the securities and futures industry. Drive the digital transformation of industry organizations. Steadily promote the capital market fintech innovation pilot and the “Data Factor x Capital Market” special pilot project, and steadily promote the application and implementation of technology related to data elements in key areas of the capital market. Improve the functions of the unified search platform for public fund account share information, and steadily advance the pilot conversion of securities company account management function optimization to routine. Promote the implementation of “green light” projects to issue shares and bonds for more digital economy and platform enterprises.

(13) Strengthen the construction of digital infrastructure for securities and futures. Improve the smart supervision platform. Further promote the construction of supervised big data warehouses and industry infrastructure databases, optimize and improve industry data standards, open up data silos, continue to carry out data governance actions, and enhance data service capabilities. Accelerate the transformation of intelligent supervision, strengthen system interoperability, strengthen cross-departmental data and information sharing, and further improve supervision efficiency and risk identification and prevention capabilities. Strengthen information security management and continuously improve the autonomous security and controllability of technical information throughout the market and industry.

7. Strengthen the financial “five major articles” service capabilities of industry institutions

(14) Improve the positioning and governance of industry institutions. Urge securities and futures management institutions to correct their business philosophy and put functionality first. Guide industry organizations to incorporate the “five major articles” of good finance into long-term business development strategies, strengthen organizational management systems, and make appropriate preferences in terms of internal institutional set-up, resource investment, and performance evaluation. Guide industry organizations to combine shareholders' characteristics, regional advantages, talent reserves and other resource endowments to prepare “five major articles” in finance according to local conditions. Encourage industry organizations such as securities companies and futures companies to actively participate in rural revitalization projects and carry out “one division, one county” twinning assistance. Establish and improve the statistics, assessment and evaluation system for the “five major articles” of finance in the capital market, and improve the classification and evaluation index system for industry institutions such as service scientific and technological innovation and information technology investment. Cultivate a good industry culture and strengthen capital market talent team building.

(15) Strengthen compliance management and risk prevention and control. Industry organizations are urged to establish the concept of “compliance creates value”, implement comprehensive risk management and compliance management requirements for all employees, insist on “if you can't see clearly, don't exhibit”, avoid rushing to the top, and strictly prevent “fake innovation” and “random innovation.” In response to the risk characteristics of the “Five Major Articles” of finance, explore the establishment of a hard restraint system for early risk correction, and urge industry institutions to improve risk identification, monitoring, early warning, and stress testing mechanisms.

8. Enhancing the capital market's synergy of “five major articles” in finance

(16) Improve working mechanisms. Strengthen coordination and coordination with relevant departments and local governments, do a good job of coordinating policy research and formulation, continue to promote the improvement of the capital market's “Five Major Articles” financial regulations and policy systems, and supervise the implementation of various measures. Make effective use of all aspects of subjective activism, and steadily carry out research and promotion of innovative initiatives.

(17) Coordinate the work of risk prevention and strong supervision. Strengthen risk monitoring, early warning and early correction, achieve early identification, early warning, early exposure, and early treatment of possible risks, improve risk assessment and feedback improvement mechanisms for innovative activities, and maintain the smooth operation of the capital market. Adhere to the main business of supervision, strictly crack down on all kinds of illegal and irregularities carried out under the name of the “Five Major Articles” of finance, strictly prevent false, entertain oneself, and effectively protect the legitimate rights and interests of investors.

(18) Strengthen publicity and guidance. Focus on the capital market to better serve the development of new types of productivity, strengthen the capital market to publicize and interpret major financial “Five Major Articles” and important policies, and strive to create a favorable public opinion environment. Carry out various forms of publicity and education activities to strengthen investor education. Summarize experiences and practices in a timely manner, and increase publicity and promotion of typical practices and model cases. Dynamically evaluate the effects of policies and optimize relevant measures and arrangements in due course.

China Securities Regulatory Commission

February 7, 2025

This article was edited by China Securities Regulatory Commission, Zhitong Finance Editor: Chen Wenfang.