Original Title: Notice on the Issuance of the "Administrative Measures for the Jinshan District Industrial Development Fund"
Chapter I General Provisions
Article 1: To standardize the establishment and operation of the Jinshan District Industrial Development Fund, in accordance with the Ministry of Finance’s “Notice on Issuing the <Interim Measures for the Administration of Government Investment Funds>” (Cai Yu [2015] No. 210), the “Guiding Opinions of the Ministry of Finance on the Injection of Fiscal Funds into Government Investment Funds to Support Industrial Development” (Cai Jian [2015] No. 1062), andthe “Guiding Opinions of Shanghai Municipality on Further Strengthening the Operation and Management of Municipal Government Investment Funds” (Hu Cai Qi [2016] No. 118), as well as the “Guiding Opinions of Jinshan District on Strengthening the Standardized Operation of District Government Investment Funds” (Jin Cai Qi [2017] No. 102), these Measures are hereby formulated.
Article 2 The Jinshan District Industrial Development Fund (hereinafter referred to as the “Fund”) is established with the approval of the District Government. It aims to leverage the guiding and promotional role of fiscal funds to advance the industrial transformation and upgrading as well as major development initiatives in Jinshan District, and to facilitate economic restructuring and the optimal allocation of resources. The Fund operates through Shanghai Jinshan Science and Technology Venture Capital Co., Ltd. as its investment platform.
Chapter II Organizational Structure and Responsibilities of the Fund
Article 3 The Fund Management Committee (hereinafter referred to as the “Fund Management Committee”) is responsible for decision-making and coordination on major matters. It operates under the leadership of the Jinshan District Government Investment Fund Leading Group and is accountable to the District Government. Its primary responsibilities include: reviewing and approving key management systems of the Fund; determining the composition of the Investment Decision-Making Committee; reviewing and approving the Fund’s primary investment directions; deliberating on the Fund’s annual work plans and annual work reports; and making decisions and coordinating major matters such as Fund capital raising, disposition of returns, renewal, and liquidation.
The Fund Management Committee shall be chaired by the Deputy District Governor in charge of industry, with the principal leader of the District Investment Promotion Office serving as Vice Chair. Members shall include the leaders in charge from the District Finance Bureau, District Development and Reform Commission, District Science and Technology Commission, District Economic Commission, District State-owned Assets Supervision and Administration Commission, and the District Investment Promotion Office.
The Fund Management Committee shall establish an Office, which shall be located within the District Investment Promotion Office.
Article 4 The Fund Investment Decision-Making Committee (hereinafter referred to as the “Fund Investment Committee”) is responsible for decisions related to investment projects. It is composed of members of the Fund Management Committee, representatives of the Fund Management Institution, and relevant experts. Its specific responsibilities include: reviewing the Fund Management Institution’s investment proposals for prospective projects and the evaluation opinions and recommendations of third-party experts regarding such projects; making decisions on prospective projects and determining investment plans; deciding on specific plans for the realization of equity interests in investment projects and the Fund’s exit from investee projects; and handling other matters authorized by the Management Committee.
Article 5 The Fund Management Institution is responsible for the Fund’s daily investment operations, including investment, post-investment management, and investment exits, and shall report on investment operations to the Fund Management Committee on a regular basis.
The Fund Management Institution shall be served by Jinshan Capital Management Group Co., Ltd. (hereinafter referred to as “Jinshan Capital Group”), which shall designate a dedicated fund management company to be responsible for the Fund’s daily operations.
Chapter III Fund Size and Sources of Funds
Article 6 The scale of the Industrial Development Fund is 700 million yuan. The scale of the Fund may be adjusted with the consent of the District Government.
Article 7 The sources of funds for the Industrial Development Fund include: the general public budget, returns from fund operations, and other sources of funds.
Article 8: Proceeds generated from the exit of the Industrial Development Fund’s external investments shall be fully returned to the fund’s custodial account and may be used for the fund’s rolling development.
Chapter IV Fund Investment and Term of Operation
Article 9: The investment term of the Fund shall be six years from the date of its establishment. With the consent of the Fund Management Committee, the investment term may be extended.
Article 10: The duration of the Fund is 10 years from the date of its establishment. If an extension of the duration is deemed necessary, it shall be processed in accordance with relevant procedures after obtaining approval from the District Government.
Chapter V: Fund Investment Focus and Operational Methods
Article 11 Fund investments shall comply with national, municipal, and Jinshan District industrial policies and relevant plans. They shall primarily support industrial sectors with distinct foundational, catalytic, and strategic characteristics, focusing on industries identified as priorities in Jinshan District’s economic transformation and upgrading plans, as well as key areas of significant importance to Jinshan’s high-quality development.
Article 12. The Fund’s investment targets include sub-funds (hereinafter referred to as “Portfolio Funds”) and enterprises (hereinafter referred to as “Portfolio Enterprises”) that meet the requirements of Article 11. Portfolio Funds shall give priority to investing in enterprises located within the jurisdiction of this District.
Article 13: The Fund’s external investments shall be conducted in accordance with the following procedures:
(1) The Fund Management Institution shall, in accordance with the annual plan, publicly solicit equity investment management institutions or management teams intending to cooperate with the Fund;
(2) The Fund Management Institution shall conduct due diligence on the screened projects (including projects of Invested Funds and Invested Enterprises, hereinafter referred to as “Projects”) and submit investment recommendations;
(3) Depending on the characteristics of the Invested Funds and Projects, the Office of the Fund Management Committee may entrust relevant investment industry associations or organize industry experts to conduct expert reviews of projects that have undergone due diligence, and provide review opinions and recommendations;
(4) The Fund Investment Decision-Making Committee shall make investment decisions regarding the projects based on the results of the due diligence, the investment recommendations under subparagraph (2) of this Article, and the expert review opinions and recommendations under subparagraph (3) of this Article.
Article 14 The Fund Management Institution shall conduct post-investment management of the invested projects in accordance with the investment agreement. If an invested project violates laws or regulations, breaches contractual terms, or deviates from the policy orientation as stipulated in the agreement, the Fund Management Institution may take necessary remedial measures in accordance with the investment agreement.
Article 15: The Fund shall bear limited liability for all types of investments up to the amount of its capital contribution and shall not engage in the following activities:
(1) Engaging in guarantee, mortgage, or entrusted loan businesses other than financing guarantees;
(2) Investing in secondary market stocks, futures, real estate, securities investment funds, corporate bonds rated below AAA, trust products, non-principal-protected wealth management products, insurance plans, and other financial derivatives;
(3) Providing sponsorships or donations to any third party (except for approved charitable donations);
(4) Absorbing or indirectly absorbing deposits, or providing loans or interbank lending to third parties;
(5) Engaging in external investments that entail unlimited joint and several liability;
(6) Issuing trust or collective wealth management products to raise funds;
(7) Other business activities prohibited by national laws and regulations.
Article 16 Unless approved by the Fund Management Committee, the Fund’s idle funds shall be limited to bank deposits, the purchase of government bonds, and financial products that comply with relevant national regulations.
Chapter VI Fund Investment Exit
Article 17 Fund shares or equity interests formed through fund investments may be exited through means such as public listing, private transfer, repurchase, and liquidation.
Article 18: The Fund may exit early as agreed upon, provided that the transfer price of the fund shares or equity interests formed through the Fund’s investments is not lower than the original investment amount. If the invested project meets the pre-agreed industrial development objectives, the Fund may grant appropriate concessions, such as prioritizing dividends for social investors within the threshold return or ceding a portion of dividends; however, the Fund shall not promise other investors that their principal will not be lost, nor shall it promise a minimum return.
Article 19: With respect to fund shares or equity interests formed through the Fund’s investments, if the exit conditions and methods were specified in the investment agreement and related contracts at the time of investment, the Fund may exit in accordance with the prior agreements in such agreements or contracts; if no exit conditions or methods were agreed upon at the time of investment, the Fund may, after conducting an asset appraisal in accordance with regulations, exit at a price not lower than the appraised value, or exit by publicly listing the assets for transfer on a property rights trading market based on the appraised value.
Chapter VII Risk Control
Article 20. The Fund shall select a custodian bank through a public tender. The custodian bank shall be a commercial bank established within China with relevant experience.
Article 21 The custodian bank shall, in accordance with the custodian agreement, be responsible for daily operations such as fund account management, fund disbursement and settlement, and asset safekeeping, and shall conduct dynamic supervision of investment activities. The custodian bank shall report on the status of fund custody on a regular basis and promptly report any abnormal fund flows.
Article 22 The fund management institution shall establish and improve internal management control and risk prevention mechanisms to ensure the safe operation of the fund.
Article 23 The Fund shall be subject to audit supervision by the State Audit Office in accordance with the law. The Fund Management Committee shall supervise and evaluate the performance of the Fund Management Institution in the performance of its duties in accordance with relevant regulations, and may, as needed, entrust professional institutions to audit the Fund.
Chapter VIII Performance Evaluation and Incentives
Article 24. The Fund Management Committee shall organize and conduct performance evaluations of the Fund in a timely manner in accordance with relevant regulations.
Article 25. A management fee of 1% of the fund’s scale shall be paid annually to the fund management institution. With the approval of the Fund Management Committee, up to 20% of the fund’s investment returns from excess returns may be allocated as incentives to the fund management institution to encourage it to continuously improve its operational management standards.
Chapter IX Supplementary Provisions
Article 26 These Measures shall take effect on the date of issuance and remain valid until August 31, 2024. The District Investment Promotion Office shall be responsible for their interpretation.
