2024 World Investor Week – "16 Measures for Sci-Tech Innovation"

2024 Year 4 Month 19 On the same day, to implement the "Several Opinions of the State Council on Strengthening Regulation, Preventing Risks, and Promoting High-Quality Development of the Capital Market," and to better serve technological innovation while fostering the growth of new-quality productivity, the China Securities Regulatory Commission (CSRC) issued the "16 Measures for Capital Market Services Supporting the High-Level Development of Technology Enterprises." These measures provide supportive initiatives covering areas such as IPO financing, mergers and acquisitions, bond issuance, and private equity investment. Specifically:

0 1 Concentrate efforts to support major scientific and technological breakthroughs

Strengthen policy coordination with relevant departments, accurately identify technology-driven enterprises, and prioritize supporting those companies that have achieved breakthroughs in critical core technologies—whether through IPO financing, mergers and acquisitions, or bond issuance—while simultaneously enhancing the comprehensive support system across the entire value chain. “ Green Lane ” Mechanism.

02 Enhance Equity Incentives for Technology-Based Enterprises

Support the establishment of equity incentive plans for technology-based enterprises before their IPOs, and ensure continuous implementation of incentives after listing, encouraging the inclusion of core technical personnel within the incentive scope. Conduct research to optimize the methods, target groups, and pricing principles for equity incentives in tech companies, streamline the procedures for implementing these plans, and promptly introduce exemption rules for short-term trading during the equity incentive process, thereby enhancing the effectiveness of equity incentives.

03 Deeply advance the transformation of issuance regulation

Implement all institutional arrangements for the comprehensive reform of the stock issuance registration system, leveraging the transformation of issuance oversight to drive a systemic regulatory overhaul. Scientifically and reasonably maintain the normalization of new share offerings, harness the combined strengths of the issuance oversight teams, continuously enhance review efficiency and transparency, and effectively meet the financing needs of tech-driven enterprises at various stages of growth and across diverse business models.

04 Optimizing the Listing and Financing Environment for Technology-Driven Enterprises

Support, in accordance with laws and regulations, the listing of high-quality, yet-to-profit technology companies that possess critical core technologies, demonstrate strong market potential, and exhibit prominent science and innovation attributes. Further encourage various types of medium- to long-term capital to increase their allocation to equity-based assets. Additionally, provide support for technology firms seeking overseas listings in compliance with legal and regulatory requirements, ensure the effective implementation of the overseas listing filing system, and better facilitate these companies' access to overseas financing and growth opportunities.

05 Coordinately leverage the functional positioning of each sector

Introduce rules for positioning the main board segment, emphasizing those with industry-leading representation. “ Large-cap blue chips ” Features. The STAR Market adheres to “ Hard Technology ” The ChiNext Board is positioned to serve growth-oriented, innovation-driven, and entrepreneurial enterprises, while the Beijing Stock Exchange and the National Equities Exchange and Quotation Company are jointly building a premier platform dedicated to supporting innovative small and medium-sized enterprises. By emphasizing the unique roles of the STAR Market and the ChiNext Board, setting an upper limit on the scale of applications, and providing more targeted support for early-stage technology firms, the new system will strengthen oversight at every stage—guidance & acceptance, application processing, review, and registration—while also optimizing the structure of newly listed companies.

06 Steadily advance the high-quality development of the Beijing Stock Exchange

Enhance the inclusiveness of market access on the Beijing Stock Exchange, and vigorously attract and nurture a group of innovative small and medium-sized enterprises to go public. Introduce a mechanism allowing listed companies on the Beijing Stock Exchange to publicly issue convertible bonds. Encourage various types of long-term and medium-term capital to actively participate in the exchange, and explore ways to enrich index funds and specialized products tailored for the Beijing Stock Exchange.

07 Strengthen Support for Refinancing of Technology-Driven Enterprises

Leverage the STAR Market “ Experimental Field ” This measure supports the growth of innovative and entrepreneurial enterprises on the ChiNext Board, actively exploring additional financing instruments and approaches tailored to the needs of technology-driven companies. It also involves studying the establishment of a shelf-registration system for both the STAR Market and the ChiNext Board. Furthermore, the initiative aims to enhance the efficiency and convenience of refinancing, guiding listed companies to channel raised funds into sectors aligned with national economic development strategies and industry priorities.

08 Driving Technology-Focused Enterprises to Efficiently Implement Mergers and Acquisitions Reorganizations

Continuously deepen market-oriented reforms in mergers and acquisitions as well as corporate restructuring, formulate targeted convertible bond restructuring rules, optimize the streamlined review mechanism for small-scale transactions, and appropriately enhance the inclusiveness of valuation assessments for light-asset, technology-driven enterprises during restructuring. This will support tech firms in comprehensively leveraging diverse payment instruments—such as shares, targeted convertible bonds, and cash—to execute restructuring initiatives, thereby helping them improve quality, boost efficiency, refine operations, and strengthen their competitive edge.

09 Strengthen the bond market's targeted support for technological innovation

To promote the high-quality development of science and technology innovation corporate bonds, we will strengthen the bond market's mechanisms that support technological innovation. Specifically, we will prioritize supporting bond financing for companies in high-tech and strategic emerging industries, while encouraging both policy-based and market-oriented institutions to provide credit enhancement support for private-sector tech firms issuing sci-tech innovation bonds. Additionally, high-quality sci-tech innovation bonds from leading enterprises will be included as benchmark market-making instruments, guiding and incentivizing investors to increase their investments in these bonds. Finally, we will back initiatives like new infrastructure projects—such as data centers—and innovative tech industry parks, enabling them to tap into financing opportunities within the science and technology innovation sector. REITs , broadening sources of incremental funding.

10 Guide Private Equity and Venture Capital Funds Toward the Science and Technology Innovation Sector

Improve the regulatory measures for private equity funds, diversify product types, promote the development of fund-of-funds, and leverage private equity and venture capital funds to foster the growth of technology-driven enterprises. Implement the private equity fund regulations effectively. “ Reverse Hook ” Policies will expand the pilot program allowing private equity and venture capital funds to distribute stocks in kind to investors, as well as pilot programs for transferring fund shares, thereby broadening exit channels and fostering… “ Investment - Exit - Reinvestment ” A virtuous cycle.

11 Fully leverage the regional equity market's role in nurturing and supporting innovative, technology-driven enterprises.

Steadily expand the coverage of regional equity market innovation pilots, and build them with high quality. “ Specialized, Specialized, and New ” The specialized board continuously enriches its service tools and financing products tailored for technology-driven enterprises, steadily advancing the implementation of businesses such as equity warrants and equity incentive plans. It is also exploring ways to strengthen long-term capital support from government-guided funds and other sources, including through preferred stocks (or equity rights). Furthermore, the board will enhance connectivity among multi-tiered capital markets, ensuring seamless coordination in areas like corporate compliance guidance, financing solutions, equity incentive product development, and data sharing. Finally, it will effectively leverage the regional equity market's integration channels with the New Third Board, along with its transparent review and approval system.

12 Strengthen the Efforts to Innovate Financial Products

Further enrich the science and technology innovation index system and develop more indices that reflect the unique characteristics of sci-tech enterprises. Enhance the construction of the exchange's complementary product ecosystem. Support securities and fund management institutions in launching science-and-technology-themed fund products, strengthen their active management capabilities, and actively invest in innovative tech companies. Additionally, expand the supply of derivatives for the STAR Market and the ChiNext Board, and proactively advance initiatives related to sci-tech innovation. 50 The research, development, and launch of ChiNext index futures and options.

13 Continuously improve the trading mechanism

Evaluate and optimize the market maker mechanisms for the STAR Market and the Beijing Stock Exchange, further promoting market-oriented and streamlined operations while enhancing price discovery and resource allocation efficiency. Additionally, refine the rules governing securities lending and borrowing as well as stock lending programs.

14 Urge securities firms to enhance their capabilities in serving technological innovation.

Promote the high-quality development of securities firms by focusing on their core responsibilities, strengthening professional capability building, and enhancing their ability to deliver value. Provide services such as equity financing, bond financing, mergers and acquisitions, restructuring, market-making transactions, risk management, and wealth management tailored to technology-driven enterprises, thereby helping to establish a diversified, relay-style financial service ecosystem.

15 Optimizing Service Mechanisms for Technology-Driven Enterprises

Put into practice “ Conduct audits with an open-door policy ” The concept of soundly supporting technology-driven enterprises in going public and raising additional capital. “ Pre-communication ” Mechanisms to enhance the convenience and effectiveness of consulting services for technology-driven enterprises. Strengthen coordinated efforts in market development to improve the efficiency of services provided to technology firms in key areas.

16 Strengthen the responsibilities of all parties

Persist “ Filing means taking responsibility ” Principles dictate that the responsibilities of technology-driven enterprises planning to issue securities, as well as their related intermediary institutions, must be strictly enforced and firmly upheld. This ensures the authenticity, accuracy, and completeness of information disclosure, while rigorously cracking down on illegal and non-compliant disclosure practices and fraudulent issuance in accordance with the law, thereby safeguarding the legitimate rights and interests of investors.