A few days ago, the General Office of the State Council issued the "Several Policies and Measures to Promote the High-quality Development of Venture Capital" (hereinafter referred to as the "Policy Measures"), clarifying five key measures.
On June 26, the State Council Information Office held a regular briefing on the policies of the State Council, at which Li Chunlin, deputy director of the National Development and Reform Commission, Wang Hailin, director of the Capital Operation and Income Management Bureau of the State-owned Assets Supervision and Administration Commission of the State Council, Li Mingxiao, director of the Policy Research Department of the State Administration of Financial Regulation, and Wu Meng, director of the Second Department of Market Supervision of the China Securities Regulatory Commission, introduced the relevant situation of the "Policy Measures" at the meeting and answered questions from reporters.
Solve the problem of "lack of long money" and "no rice in the pot" in the industry
What are the key measures of the Policy Measures?
Li Chunlin: The "Policies and Measures" put forward the following policy measures around the whole chain and life cycle of venture capital "fundraising, investment, management and withdrawal".
On the fund-raising side, we will guide long-term funds such as insurance funds to invest in venture capital, expand the pilot scope of direct equity investment by financial asset investment companies, mobilize qualified social capital to do "patient capital", and solve the problems of "lack of long money" and "no rice to cook" in the industry.
On the investment side, in response to the problem that many venture capital institutions report that "it is difficult to invest even if there is money", the National Development and Reform Commission will take the lead, in conjunction with relevant ministries and commissions, to establish a docking mechanism between venture capital and innovation and entrepreneurship projects, so as to provide a number of high-quality and good projects that are in line with the national development direction and strategic orientation for the majority of venture capital institutions, and solve the problem of where to invest money.
On the management side, it is proposed to continue to strengthen the management of venture capital funds funded by the government and state-owned enterprises, and establish and improve the management system and due diligence compliance liability exemption mechanism in line with the characteristics and development laws of the industry. In view of the tax and regulatory issues that are of general concern to all parties, it is proposed to continue to implement the preferential tax policies for venture capital enterprises. At the same time, in accordance with the relevant requirements of the Regulations on the Supervision and Administration of Private Investment Funds, differentiated regulatory policies are implemented for venture capital funds that are treated differently from other private funds.
On the exit side, the focus is on broadening exit channels and optimizing the exit policy of venture capital funds.
Research and increase the investment of insurance funds in entrepreneurship
The upper limit of the concentration ratio of investment funds
How to guide long-term funds such as insurance funds to enter the venture capital industry and attract fresh water for the industry?
Li Mingxiao: The financial regulatory authorities continue to optimize the regulatory policies for insurance funds, and have successively issued five regulatory policy documents to comprehensively remove the institutional obstacles that hinder insurance funds from carrying out equity investment, venture capital, and support for scientific and technological innovation, allowing insurance funds to invest in equity investment funds actually controlled by non-insurance financial institutions, abolishing the restriction on the scale of investment in a single venture capital fund, supporting insurance institutions to strengthen cooperation with professional equity investment institutions, and broadening the sources of long-term funds for start-up enterprises. At present, the investment of insurance funds in venture capital funds is smooth at the level of regulatory policies.
In order to further guide insurance funds to play the role of long-term capital and patient capital, and better support venture capital, the State Administration of Financial Supervision issued the Notice on Optimizing the Regulatory Standards for the Solvency of Insurance Companies, which clarifies the minimum standards for the measurement of property insurance risk factors applicable to science and technology insurance, and promotes the release of more insurance funds into the field of scientific and technological innovation.
In addition, in order to meet the multi-level investment needs of the financial market, the State Administration of Financial Supervision actively supports trust companies, wealth management companies and other asset management institutions to increase their support for venture capital, and develops long-term investment asset management products that are compatible with venture capital in accordance with the principle of "sellers are responsible, buyers are responsible".
In the next step, the State Administration of Financial Supervision will continue to optimize the rules for the use of insurance funds, study and increase the upper limit of the proportion of insurance funds investing in venture capital funds, and better guide insurance funds and related asset management institutions to increase the allocation of venture capital funds under the premise of legal compliance and controllable risks, and actively promote the high-quality development of venture capital.
Create a more favorable market environment for venture capital
What are the specific measures taken by the CSRC to optimize the venture capital market environment?
Wu Meng: The China Securities Regulatory Commission (CSRC) has always attached great importance to creating a more favorable market environment for venture capital based on the capital market, mainly in three aspects:
First, we will continue to deepen the reform of the capital market, improve the service coverage and accuracy of the multi-level capital market, and strive to provide more effective tools and platforms for venture capital to play its role.
Second, make differentiated regulatory arrangements. From the institutional point of view, in July last year, the "Regulations on the Supervision and Administration of Private Investment Funds" was officially issued, which clearly implemented classified supervision of venture capital funds, and also set up a special chapter, in terms of investment scope, investment period, investment strategy, etc., have clarified the relevant conditions that should be met, and also made it clear that differentiated supervision and self-discipline management should be implemented in terms of registration and filing, fund raising, investment operation, risk monitoring, on-site inspection, etc., for those who are mainly engaged in long-term investment, value investment, Venture capital funds for the transformation of major scientific and technological achievements provide facilitation for investment exit.
Third, actively support the industry to continuously improve its comprehensive capabilities. Strengthen coordination with relevant parties, and optimize support policies around the whole chain of "fundraising, investment, management and withdrawal". Guide private equity venture capital funds to "invest early, invest small, and invest long", and better reflect and play the role of patient capital; At the same time, we will support the industry to enhance its comprehensive strength, including establishing differentiated and forward-looking research, screening and valuation capabilities, strengthening risk management and compliance capacity building, and continuously improving the level of risk management and standardized operation.
Give greater support to the central enterprise venture capital fund
The activity of state-owned capital in the venture capital market is increasing, and the venture capital fund business carried out by central enterprises has attracted much attention. What's next?
Wang Hailin: Up to now, the central enterprises have managed a total of 126 venture capital funds, with a subscription scale of 52.9 billion yuan and an investment amount of 31.3 billion yuan, mainly invested in advanced manufacturing, energy, electronic information and other fields, and have achieved positive results in promoting scientific and technological research and increasing investment in scientific research.
In the next step, the SASAC will be based on its own responsibilities and positioning, strengthen communication and coordination with relevant departments, and give greater support to the central enterprise venture capital fund in terms of relaxing scale restrictions, increasing the proportion of capital contribution, focusing on overall performance and long-term return assessment, and clarifying the conditions for due diligence and fault tolerance.
At the same time, the State-owned Assets Supervision and Administration Commission will also guide the central enterprises to make full use of the current relevant policies, focus on the main responsibilities and main businesses, combine their own advantages and conditions, use venture capital funds to increase investment in industry science and technology leaders, the transformation of scientific and technological achievements and the upstream and downstream small and medium-sized enterprises in the industrial chain, encourage early, small, long-term, and hard technology, give full play to the role of long-term patient capital, support strategic emerging industries and future industries, help cultivate and develop new quality productivity, and further promote the high-quality development of the real economy.
Research and exploration are promoted and expanded
Pilot scope of financial asset investment companies
The "Policy Measures" want to expand the direct equity investment methods of financial asset investment companies, is there any new arrangement and progress in this regard of the State Administration of Financial Supervision?
Li Mingxiao: The State Administration of Financial Supervision attaches great importance to the financing demands of the real economy, especially private, small and micro science and technology enterprises, and actively complies with the market's voices. Thoroughly sort out and summarize the experience of direct equity investment carried out in Shanghai in the early stage, study and explore the expansion of the scope of pilot areas of financial asset investment companies, give full play to the professional advantages of financial asset investment companies in venture capital, equity investment and enterprise restructuring, and increase support for scientific and technological innovation.
Under the premise of compliance with laws and regulations and controllable risks, the State Administration of Financial Supervision actively supports relevant banks and financial asset investment companies to carry out business cooperation, promote project information sharing and exchange, give full play to the two mechanisms and two types of advantages of equity financing and debt financing, actively explore diversified financial service models for scientific and technological innovation, encourage banks and venture capital funds to strengthen docking, and standardize the development of "loan + external direct investment". effectively solve the financing difficulties and pain points of start-ups, and promote the virtuous cycle of "capital-capital-assets" of enterprises.
Promote the implementation of measures such as "improving the exit mechanism for venture capital".
What are the considerations for broadening exit channels and optimizing the exit process?
Wu Meng: In recent years, the China Securities Regulatory Commission (CSRC) has attached great importance to this issue, continuously deepened the reform and opening up of the capital market, and strived to provide a good foundation for alleviating the "difficulty in exiting".
First, optimize the functions and mechanisms of the multi-level capital market. Since the beginning of this year, the China Securities Regulatory Commission has successively issued the "Sixteen Measures for Capital Market Service Technology Enterprises" and the "Eight Measures for Deepening the Reform of the Science and Technology Innovation Board" to establish and improve the "green channel" for equity financing, mergers and acquisitions and restructuring for "hard technology" enterprises that carry out key core technology research. At the same time, we will actively improve the support policies for mergers and acquisitions, improve the inclusiveness of the valuation of mergers and acquisitions, enrich the payment tools for mergers and acquisitions, and encourage buyout funds to play a better role.
Second, take multiple measures at the same time to broaden diversified exit channels. For example, the China Securities Regulatory Commission (CSRC) is carrying out a pilot project for the physical distribution of shares by private equity venture capital funds, allowing the shares of listed companies held by them to be distributed to investors through non-transaction transfers, which not only enriches the exit channels, but also helps to alleviate the impact on the market. In another example, the China Securities Regulatory Commission (CSRC) has successively carried out pilot work on the transfer of shares of private equity funds in seven places, including Beijing, Shanghai, Guangdong, Zhejiang, Ningbo, Jiangsu, and Anhui, and has completed the transfer of private equity shares of 23.2 billion yuan. The pledge financing of private shares is 31.6 billion yuan, and this pilot work will also be conducive to supporting the further development of the second-hand share transfer fund.
Thirdly, the China Securities Regulatory Commission (CSRC) continues to keep the channels for overseas listings unimpeded. The "Trial Measures for the Administration of Overseas Issuance of Securities and Listing of Domestic Enterprises" was implemented in March last year, and by June 21, a total of 158 enterprises had completed the filing of overseas listings, of which 85 were listed in Hong Kong and 73 were listed in the United States.
Subsequently, the China Securities Regulatory Commission will continue to strengthen coordination and cooperation with all parties, strengthen the dynamic evaluation of policies, and promote the implementation and implementation of measures such as "improving the exit mechanism for venture capital".
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Source: Financial Times Client Reporter: Ma Ling Editor: Liu Nengjing E-mail: [email protected]