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the financial supervision administration recently issued the "notice on expanding the pilot program for equity investment of financial asset investment companies" (jinbanfa [2024] no. 100, hereinafter referred to as the "pilot work notice") and the "notice on expanding the scope of the pilot program for equity investment of financial asset investment companies" (jinbanbianhan [2024] no. 1210, hereinafter referred to as the "pilot scope notice"). the heads of relevant departments of the financial supervision administration answered reporters' questions on relevant policies and measures.

1. what is the background for the formulation of relevant policies and measures?

at present, indirect financing still occupies the main position in my country's total social financing, which means that it is necessary to embark on a development path of science and technology finance with chinese characteristics, especially science and technology investment. since 2020, financial asset investment companies under large commercial banks have explored paths, accumulated experience, and trained teams through the early equity investment pilot in shanghai, and have met the conditions for expanding the pilot. according to the relevant deployment of the "several policy measures to promote the high-quality development of venture capital" (guobanfa [2024] no. 31) issued by the general office of the state council in june 2024, in order to effectively play the leading and driving role of the pilot, encourage the development of venture capital, and cultivate and expand patient capital, the financial supervision administration has recently issued the "pilot work notice" and "pilot scope notice" on the basis of fully absorbing the opinions of relevant ministries, financial institutions, and local governments.

2. which cities will be included in the pilot scope in the next step?

the pilot notice states that the regions included in the pilot program for equity investment by financial asset investment companies should meet the following conditions: strong economic strength, a large number of technology companies, large r&d investment, and active equity investment. based on the above conditions, the relevant business departments will expand the pilot program for equity investment by financial asset investment companies from shanghai to 18 large and medium-sized cities including beijing, tianjin, shanghai, chongqing, nanjing, hangzhou, hefei, jinan, wuhan, changsha, guangzhou, chengdu, xi'an, ningbo, xiamen, qingdao, shenzhen, and suzhou.

3. compared with the shanghai pilot, what are the main policy adjustments made in this expansion of the equity investment pilot?

the pilot work notice mainly made the following adjustments to the shanghai pilot policy: first, appropriately relax the restrictions on the amount and proportion of equity investment. the proportion of the amount of equity investment by the on-balance sheet funds of financial asset investment companies to the company's total assets at the end of the previous quarter was increased from 4% to 10%, and the proportion of the amount invested in a single private equity investment fund to the issuance scale of the fund was increased from 20% to 30%. second, further improve the due diligence exemption and performance appraisal system. guide financial asset investment companies to implement due diligence exemption requirements in accordance with the laws and characteristics of equity investment business, improve the fault tolerance and error correction mechanism, and establish a sound long-term, differentiated performance appraisal system.

4. what are the main requirements for the management and risk control of the pilot equity investment business of financial asset investment companies?

the "pilot work notice" requires financial asset investment companies to strictly abide by relevant regulations and regulatory requirements, establish and improve relevant institutional processes for equity investment business, and carry out equity investment business pilots in accordance with the principles of marketization and rule of law, under the premise of compliance with laws and regulations, controllable risks, and commercial sustainability. financial asset investment companies need to carry out equity investment through the issuance of private equity investment funds by their subsidiaries, and relevant businesses should comply with relevant laws and regulations on the supervision and management of private investment funds; they should enhance the risk management capabilities of equity investment business, establish and improve the risk management system, consolidate the foundation of risk management, and effectively prevent and control various risks; they should optimize internal management processes, establish and improve a hierarchical authorization management system, strengthen the construction of a talent team, and continuously improve the level of venture capital and equity investment.

5. what work will the state administration of financial regulatory affairs carry out next?

the financial supervision administration will guide the five financial asset investment companies to earnestly implement relevant policies and measures and actively promote the implementation of more projects. at the same time, it will work with relevant departments to timely summarize experience, continuously optimize supporting policies, continue to study the expansion of the scope of pilot cities, and effectively promote the effectiveness of the pilot work.

source: website of the financial regulatory authority

edited by wang mengying