Original Title: Notice from the Jing’an District Science and Technology Commission Regarding the Extension of the Validity Period of the “Administrative Measures for the Jing’an District Government Industrial Guidance Fund (Trial)”

To all commissions, offices, and bureaus of the District Government; all Subdistrict Offices; and the Pengpu Town Government:

  Following an evaluation, it has been determined that the “Administrative Measures for the Jing’an District Government Industrial Guidance Fund (Trial)” (Jing Ke Wei Gui [2020] No. 1) should continue to be implemented. It is hereby reissued. The validity period shall expire on August 14, 2024.

  This notice is hereby issued.

  Jing’an District Science and Technology Commission, Shanghai

  August 15, 2022

Administrative Measures for the Jing’an District Government Industrial Guidance Fund (Trial)

Chapter I General Provisions

  Article 1 To standardize and strengthen the management of government-funded industrial guidance funds, and to enhance the guiding role and leverage effect of government funds, in accordance with the “Interim Measures for the Administration of Government Investment Funds” (Cai Yu [2015] No. 210), the “Guiding Opinions on Supporting Industrial Development through Fiscal Capital Injections into Funds” (Cai Jian [2015] No. 1062),the “Interim Measures for the Administration of Government-Invested Industrial Investment Funds” (Fa Gai Cai Jin Gui [2016] No. 2800), and the “Guiding Opinions on Further Strengthening the Operation and Management of Municipal Government Investment Funds” (Hu Cai Qi [2016] No. 118), these Measures are hereby formulated.

  Article 2 The term “Government Industrial Guidance Fund” (hereinafter referred to as the “Guidance Fund”) as used in these Measures refers to a policy-oriented guidance fund initiated and established with capital contributions from the Jing’an District Government and operated in a market-oriented manner. The District Finance Bureau shall perform the duties of the government investor on behalf of the District Government in accordance with the District Government’s authorization.

  Article 3 The Guidance Fund primarily leverages the multiplier effect of fiscal funds to guide social capital toward key industries in Jing’an District, such as commerce and trade services, financial services, professional services,cultural and creative industries, information services, and other key sectors, as well as emerging fields such as the digital economy, the health industry, and the platform economy. It aims to promote the development of new technologies, business models, and operational formats—including the Internet, cloud computing, big data, blockchain, artificial intelligence, and the Internet of Things—guide the digital transformation and quality enhancement of traditional industries, and help create new growth points for the regional economy.

  Article 4: The Guidance Fund shall be operated and managed in accordance with the principles of “government guidance, market-oriented operations, scientific decision-making, and risk prevention.”

  Article 5: The scale of the Guidance Fund is 3 billion yuan, with funding sources including funds allocated from the general public budget, government fund budget, and state-owned capital operation budget.

  Article 6: The Guidance Fund may adopt various organizational forms, such as a corporate structure or a contractual arrangement.

Chapter II Organizational Structure and Responsibilities

  Article 7 To ensure the standardized operation and sound development of the Guidance Fund, and to guarantee the scientific and effective nature of its management and investment decisions, the Guidance Fund implements a management system that separates investment decision-making, daily operations, and supervision and management. Accordingly, a Fund Management Committee and its Office, a Fund Operation Platform, and a Supervisory Committee shall be established.

  Article 8 The Guidance Fund shall establish a Management Committee (hereinafter referred to as the “Committee”), which shall serve as the management and decision-making body of the Guidance Fund and be accountable to the District Government.The Director of the Committee shall be the District Governor, and the Deputy Director shall be the Deputy District Governor in charge of relevant affairs. Members shall include the principal leaders of relevant departments such as the District Government Office, the District Finance Bureau, the District Development and Reform Commission, the District Commerce Commission, the District Science and Technology Commission, the District State-owned Assets Supervision and Administration Commission, the District Investment Office, the District Financial Affairs Office, and the Fund Operation Platform. The primary responsibilities of the Committee include:

  (1) Reviewing and approving the development plan for the Guidance Fund;

  (2) Approving the Guidance Fund’s annual work plan, investment proposals, relevant management regulations, and work summaries;

  (3) Approving the selection criteria for the custodian bank of the Guidance Fund and selecting a commercial bank established within China to serve as the custodian;

  (4) Approving major matters concerning the establishment, investment, exit, and disposition of returns of the Guidance Fund, and making major decisions regarding changes or adjustments when necessary;

  (5) Approving performance evaluation reports on the operational management of the Guidance Fund;

  (6) Approve the appointment and replacement of members of the Guidance Fund’s Expert Advisory Committee and Supervisory Committee;

  (7) Hear and deliberate on the opinions and reports of the Guidance Fund Supervisory Committee;

  (8) Other matters that should be reviewed and approved by the Management Committee.

  Article 9 The Management Committee shall establish an Office (hereinafter referred to as the “Management Committee Office”). The Management Committee Office, serving as the daily administrative body, shall be located within the District Science and Technology Commission, and the Director of the Management Committee Office shall be the head of the District Science and Technology Commission. The primary responsibilities of the Management Committee Office include:

  (1) Proposing and organizing plenary meetings, special meetings, and ad hoc meetings of the Management Committee, and drafting the agenda;

  (2) Collecting reports submitted by the fund operation platform regarding the progress of the Guidance Fund’s investments, daily operational management, and periodic reports, and submitting them to the Management Committee;

  (3) Performing other relevant tasks assigned by the Management Committee.

  Article 10 The Fund Operation Platform shall be entrusted to a qualified state-owned enterprise under the jurisdiction of Jing’an District to carry out daily investment operations as the trustee. The primary responsibilities of the Fund Operation Platform include:

  (1) Drafting the development plan for the Guidance Fund;

  (2) Drafting the Guidance Fund’s annual work plan, investment proposals, relevant management regulations, and work summaries;

  (3) Formulating selection criteria for the custodian bank of the Guidance Fund and accepting reports from the custodian bank regarding fund status;

  (4) In accordance with the requirements of the Management Committee, propose recommendations for the selection and appointment of members of the Expert Advisory Committee; provide truthful, objective, and impartial evaluations on major matters such as the Guidance Fund’s investments; and offer professional and legal advisory opinions on the overall operation of the Guidance Fund;

  (5) Implement investment plans approved by the Management Committee;

  (6) Dispatch representatives to investee entities in accordance with investment agreements to participate in or monitor decision-making on major matters. In cases of violations of the Guidance Fund Management Measures, investment activities detrimental to the security of public funds, or situations involving illegal conduct, regulatory violations, or deviation from policy objectives, the cooperation with the fund manager may be terminated in accordance with the agreement. Conduct supervision of the operations of invested funds and perform post-investment management;

  (7) Regularly report to the Management Committee on the operation of the Guidance Fund and the implementation of plans, including timely reporting of major incidents during operations, and cooperate with the Management Committee Office in carrying out daily work;

  (8) Other matters authorized by the Management Committee.

  Article 11 A Supervisory Committee shall be established for the Guidance Fund. The Supervisory Committee shall be selected and appointed by the District Finance Bureau from relevant government departments, financial institutions, and professionals in finance and auditing, and shall be accountable to the Management Committee. The head of the Supervisory Committee shall be concurrently held by the head of the District Finance Bureau. The primary responsibilities of the Supervisory Committee include:

  (1) Formulating relevant regulatory systems for the Guidance Fund and supervising the legality and compliance of the Guidance Fund’s investment operations;

  (2) Organizing and conducting special inspections of the Guidance Fund’s investment operations, fund utilization, balance sheet status, and investment gains and losses, and reporting the results to the Management Committee;

  (3) Commissioning professional institutions to conduct annual and special audits of the Guidance Fund, evaluating the audit reports and operational reports, and reporting to the Management Committee;

  (4) Supervising the work of the custodian bank for the Guidance Fund, conducting annual evaluations, and reporting to the Management Committee.

  The daily operations of the Supervisory Committee shall be convened by the District Finance Bureau, with each member participating in the Committee’s work in an independent capacity. The operating expenses of the Supervisory Committee shall be included in the annual fiscal budget.

Chapter III: Operating Principles and Models

  Article 11: The Guiding Fund’s participation in newly established funds or capital increases for existing funds shall comply with the following requirements:

  (1) The Guide Fund’s investment in any single fund shall not exceed 20% of the Guide Fund’s total asset value. In principle, the maximum investment amount shall not exceed RMB 500 million. The Guide Fund shall not become the largest shareholder or a general partner; however, the Management Committee may make separate resolutions regarding individual funds of strategic significance;

  (2) The total amount of funds invested by the invested fund into enterprises within Jing’an District shall, in principle, be no less than 1.2 times the Guide Fund’s investment in that fund;

  (3) New funds in which the Guidance Fund participates must be registered in Jing’an District (exceptional cases shall be determined by the Management Committee); in principle, the general partner or managing partner of a newly established fund shall be established with equity participation from entities associated with the fund’s operational platform.

  Article 12: The invested funds and their fund managers shall meet the following basic conditions:

  (1) The invested fund shall comply with relevant national laws and policies, have no record of violations, and, in principle, be registered with the market supervision authorities in Jing’an District; a certain proportion of its funds shall be invested in enterprises within Jing’an District or, in accordance with industrial guidelines, prioritize investment in enterprises within Jing’an District;

  (2) The scale of newly established funds in which the Fund invests shall, in principle, be no less than 200 million yuan, with the initial capital contribution amounting to no less than 30% of the total subscribed capital, and all investors shall contribute in cash;

  (3) The term of the fund shall generally not exceed 10 years;

  (4) The fund manager must be registered with the Asset Management Association of China;

  (5) The fund manager must have at least three senior investment managers with more than three years of experience in asset management;

  (6) The manager, its directors, supervisors, senior management, and other employees must have no record of major violations of laws or regulations in the past three years;

  (7) The management team must be stable, highly professional, and free of any record of illegal or disciplinary violations;

  (8) The management team must demonstrate strong professional integrity and a proven track record of investment performance;

  (9) The management team has clearly defined areas of professional investment expertise that align with Jing’an District’s key industries and emerging sectors;

  (10) Management and investment operations are standardized, with strict investment decision-making procedures, risk control mechanisms, and sound financial management systems.

Chapter IV Risk Control and Management

  Article 13 The Guidance Fund shall select a commercial bank established within China to act as its custodian, with the custodian bank performing functions such as fund disbursement, settlement, and daily monitoring.

  Article 14 During its operations, the Guidance Fund 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 sponsorship or donations to any third party (except for approved charitable donations);

  (4) Absorbing or indirectly absorbing deposits, or providing loans or interbank lending to any third party;

  (5) Engaging in external investments that entail unlimited joint and several liability;

  (6) Raising funds through the issuance of trust or collective wealth management products;

  (7) Other business activities prohibited by national laws and regulations.

  Article 15 The Guidance Fund generally does not interfere in the daily operations of the funds in which it invests; however, for acts that violate laws, regulations, or deviate from policy objectives, the investment agreement shall stipulate that the Guidance Fund may exercise a veto right over such investment matters.

  Article 16: Idle funds of the Guidance Fund may only be invested in fixed-income assets with relatively high safety and liquidity, such as bank deposits, government bonds, local government bonds, policy financial bonds, and government-supported bonds.

  Article 17: All investors in the funds invested by the Guidance Fund shall, in accordance with the principle of “shared benefits and shared risks,” clearly stipulate the methods for handling returns and bearing losses. Losses incurred by the invested funds shall be borne jointly by the investors, and the Guidance Fund shall bear limited liability to the extent of its capital contribution.

  Article 18: To better leverage the guiding role of government capital, the government may appropriately forgo certain returns; however, it shall not promise other investors that their principal will not be lost, nor shall it promise a minimum return.

  Article 19: The Guidance Fund shall clearly specify the standards for management fees and custodial fees in legal documents such as its articles of association and delegated management agreements.

  Article 20. The fund management platform shall fulfill its regular reporting obligations. Within 30 days after the end of each quarter, the fund management platform shall submit a report to the Office of the Management Committee detailing the investment operations, fund utilization, existing issues, and recommendations regarding the guiding fund. Within four months after the end of each fiscal year, the fund management platform shall collect and submit the annual investment reports and audited annual financial statements of the portfolio funds to the Office of the Management Committee.

  Article 21 The Fund Operating Platform shall establish and improve internal control systems, establish investment and risk constraint mechanisms, prevent and control risks, and ensure the standardized operation and healthy development of the Guidance Fund. The Fund Operating Platform shall implement full-cycle post-investment management for the funds in which it invests.

Chapter V Fund Exit

  Article 22: The term of funds in which the Guidance Fund invests shall, in principle, not exceed 10 years.

  Article 23. The equity interests or shares formed through the guiding fund’s external investments may be exited through methods such as listing, equity transfer, share transfer, corporate buyback, and liquidation. Where a transferee is available, the guiding fund may exit at any time.Where the Articles of Association or investment agreement clearly stipulate the exit conditions and methods and such provisions have been filed in accordance with regulations, the Guiding Fund may exit in accordance with the prior agreement; where no prior agreement exists or the agreement is unclear, the transfer shall be conducted in accordance with relevant regulations on the supervision and administration of state-owned assets.

  Article 24: The Guidance Fund shall agree with the other investors of the invested fund in the articles of association, partnership agreement, or investment agreement that, in any of the following circumstances, the Guidance Fund shall have the right to choose to exit the invested fund early without the consent of the other investors:

  (1) Where, more than one year after the plan to invest in a newly established fund has been confirmed, the establishment procedures have not been completed in accordance with the prescribed procedures and time requirements;

  (2) The invested fund has not made any actual investments within one year from the date of signing the formal investment agreement;

  (3) The investment sectors and directions do not align with policy objectives;

  (4) Investments are not made in accordance with the provisions of the articles of association or partnership agreement;

  (5) Other circumstances that violate the provisions of the Articles of Association or the Partnership Agreement, or the engagement in any conduct prohibited by laws, regulations, or these Measures.

Chapter VI Supervision and Evaluation

  Article 25 The Supervisory Committee shall regularly conduct supervision and inspections of the investment operations, fund utilization, and financial revenue and expenditure of the Guidance Fund. It may, as needed, commission professional institutions to conduct regular or special audits to effectively prevent risks and ensure the safety and effectiveness of the Guidance Fund.

  Article 26 The Management Committee shall conduct annual evaluations of the Guiding Fund’s achievement of policy objectives and investment operations. The evaluation mechanism shall primarily assess compliance with the policy framework for establishing the Guiding Fund, government requirements, investment objectives, and operational standards.

Chapter VII Supplementary Provisions

  Article 27: Detailed implementation rules regarding the operation of the Guidance Fund shall be formulated separately.

  Article 28. The Office of the Jing’an District Government Industrial Guidance Fund Management Committee shall be responsible for interpreting these Measures.

  Article 29 These Measures shall take effect on August 15, 2022, and shall remain valid for two years.