Domestic information

1. China Securities Regulatory Commission: Increase support for high-quality enterprises to issue science and technology innovation bonds

The China Securities Regulatory Commission has recently formulated and issued the "Work Plan for Promoting the High Quality Development of Science and Technology Innovation Company Bonds", aiming to improve the quality and efficiency of service for science and technology innovation enterprises. The "Work Plan" consists of five aspects and 18 work measures, with key contents including: firstly, implementing the "green channel" policy of "reporting, reviewing, and issuing" for science and technology innovation enterprises, significantly shortening the time limit for the review and registration of science and technology innovation bonds; The second is to expand the supply of scientific and technological innovation funds and promote the issuance of REITs by enterprises in the field of scientific and technological innovation; The third is to enhance the liquidity of sci-tech innovation bond trading, incorporate high-quality enterprise sci-tech innovation bonds into benchmark market making varieties, and research and launch sci-tech innovation bond ETFs; The fourth is to improve the evaluation and assessment system for science and technology innovation bonds, and include the underwriting situation of science and technology innovation bonds in the evaluation indicators of the bond business practice ability of securities companies; The fifth is to strengthen work collaboration and provide policy support for the financing entities, intermediary institutions, investment institutions, credit enhancement institutions, etc. of science and technology innovation bonds. (Source: China Securities Regulatory Commission official website, Shanghai Securities News)

Recommendation: In recent years, the China Securities Regulatory Commission has actively promoted the construction of a full life cycle bond financing support system for technology innovation enterprises. It is reported that as of now, technology innovation company bonds have supported nearly 190 enterprises to raise more than 210 billion yuan. The "Work Plan" has also provided favorable policies for technology innovation enterprises to issue corporate bonds and REITs, safeguarding the development of technology innovation in financial service enterprises and supporting high-level, high-tech High quality development plays a positive role.

2. China Securities Association: Publicly soliciting opinions on the "Guidelines for the Operation of Private Equity Securities Investment Funds"

On April 28th, the China Securities Investment Fund Industry Association publicly solicited opinions on the "Guidelines for the Operation of Private Securities Investment Funds". The "Operation Guidelines" propose standardized requirements for the fundraising, investment, and operation management of private equity investment funds. Among them, it is specified that the initial fundraising and existing scale of private equity investment funds shall not be less than 10 million yuan, which is in line with the "Measures for the Registration and Filing of Private Equity Investment Funds". In terms of fundraising, clarify the initial fundraising and survival scale of private equity investment funds, strengthen investment scope and investor suitability requirements, standardize redemption management, and arrange warning stop loss lines. In terms of investment, basic investment management requirements with portfolio investment as the core are proposed, prohibiting multi-layer nesting, and regulating bond investment behavior and derivative trading. In terms of operational management, it is required to establish and improve internal control systems, strengthen liquidity management, information disclosure, and information reporting requirements. (Source: Securities Times)

Recommendation: The "Operation Guidelines" allow for differentiated rectification needs based on different situations of existing funds, effectively connecting with the revised "Registration and Filing Measures for Private Equity Investment Funds" and supporting guidelines by the China Securities Association in February this year, and will provide clearer instructions for the operation and supervision of private equity investment funds.

3. Shanghai Stock Exchange: Revised and released guidelines for the disclosure of information on the duration of corporate bonds

On May 5th, the Shanghai Stock Exchange issued and implemented the "Guidelines for the Application of Shanghai Stock Exchange's Self regulatory Rules for Bonds No. 1- Continuous Information Disclosure of Corporate Bonds (Revised in 2023)". This revision mainly includes four aspects: firstly, optimizing and integrating the regulatory requirements for information disclosure in the early stage; Secondly, focus on risk orientation and optimize disclosure standards; Thirdly, further strengthen the normative requirements for information disclosure; The fourth is to clarify the disclosure requirements for bankruptcy proceedings and market-oriented restructuring. (Source: Shanghai Stock Exchange official website)

Recommendation: The Shanghai Stock Exchange continuously improves the regulatory rules for corporate bonds, aiming to consolidate the responsibility of market entities, promote high-quality development of the corporate bond market, and serve the overall development of national strategy and market economy.

4. Shenzhen Stock Exchange: Release two guidelines for corporate bond information disclosure business, continuously improving the quality and efficiency of duration supervision

On May 5th, the Shenzhen Stock Exchange officially released two business guidelines: "Guidelines for the Supervision of Corporate Bond Survival Business No. 1- Regular Report" and "Guidelines for the Supervision of Corporate Bond Survival Business No. 2- Interim Report", which clarify the scope of information disclosure obligations and preparation requirements for annual reports of credit enhancing entities, refine and clarify the disclosure requirements for major matters that may affect their ability to compensate; Clarify the disclosure requirements for professional institutions such as trustee managers regarding their performance matters such as verification of written confirmation of regular reports, verification of the use of raised funds, resale verification, and follow-up of bond default disposal. (Source: Official website of Shenzhen Stock Exchange)

Recommendation: The Shenzhen Stock Exchange continues to improve its corporate bond regulatory system, effectively urging market entities to return to their positions and fulfill their responsibilities, which is conducive to improving the regulatory capacity and service level of the corporate bond market.

5. China Infrastructure Association: actively respond to the market changes brought by digitalization, and promote the Digital transformation of fund custody and service business

On May 4th, the first working meeting of the Third Custody and Operation Committee of the China Securities Investment Fund Industry Association in 2023 was held in Beijing. The meeting believes that fund custody and service institutions should plan to promote the high-quality development of fund custody and service businesses: firstly, deeply promote the improvement of the fund custody system; Secondly, vigorously promote the development of fund service business; Third, actively respond to the market changes brought about by digitalization, and promote the Digital transformation of fund custody and service business; Fourthly, continue to promote the net worth management of asset management products; Fifth, continuously promote the improvement of tax policies in the fund industry; Sixth, increase the promotion of fund custody and services, and cultivate a healthy industry culture. (Source: Securities Times website)

Recommendation: The fund custody system escorts the high-speed and high-quality development of the asset management industry, accelerates the Digital transformation of fund custody and service business, and is conducive to the sound and upward development of the asset management industry.

6. In the first quarter, a total of 367.98 billion yuan was added nationwide for tax reduction, fee reduction, and deferred tax refunds

Since the beginning of this year, the tax authorities have conscientiously implemented two batches of tax and fee preferential policies and related policies deployed and implemented by the State Council, which have been continuously optimized and innovated. In the first quarter, a total of 367.98 billion yuan has been added nationwide for tax reduction and deferred tax refunds. In batches, the first batch of policies implemented at the beginning of the year added 179.69 billion yuan in tax reduction and fee reduction, among which small-scale taxpayers with monthly sales of less than 100000 yuan were exempted from value-added tax, and a new tax reduction of 10.43 billion yuan was added; The policy of reducing the tax collection rate for small-scale taxpayers from 3% to 1% has added a tax reduction of 38.99 billion yuan. On March 24th, the Executive Meeting of the State Council decided to implement the second batch of policies for continuous optimization and innovation, which added 96.26 billion yuan in tax reduction and fee reduction. Among them, the income tax reduction policy for small and micro enterprises added 47.25 billion yuan in tax reduction; Continue to implement the policy of reducing unemployment insurance premiums in stages, with an additional reduction of 39.05 billion yuan; Continue to implement the policy of reducing work injury insurance premiums in a phased manner, adding 3.93 billion yuan in cost reductions. Other policies such as tax refunds and deductions have reduced the burden by 92.03 billion yuan. (Source: People's Daily)

Recommendation: Since the beginning of this year, the country has implemented two batches of policies to reduce taxes and fees, as well as refund environmental fees, giving a large wave of tax dividends to small and micro market entities, and continuously safeguarding the healthy development of small and micro enterprises.

7. A false tax case, rectification of economic regulations, exemption from criminal punishment in the second instance

Xing, the actual controller of a certain engineering company in Wuhu, in order to obtain sufficient value-added tax special invoices to be certified by the tax authorities for tax deduction, in the absence of real transactions with others, he paid a invoicing fee of 6% to 7% of the face amount, and collaborated with others to issue 13 false value-added tax special invoices for a certain engineering company in Wuhu. All the false value-added tax special invoices have been certified by the tax authorities for a total tax deduction of over 170000 yuan. After trial, the first instance court sentenced the defendant Xing to one month's detention and fined 20000 yuan for the crime of falsely issuing value-added tax special invoices. Xing refused to accept the first instance judgment and appealed to the Wuhu Intermediate People's Court. At the same time, Xing and his company submitted an application for corporate compliance rectification to the Wuhu Intermediate People's Court. According to the reform of the Economic Cooperation and Reform Commission, the defendant Xing in the second trial was found guilty of falsely issuing a special value-added tax invoice and was exempted from criminal punishment. (Source: People's Court Report)

Recommendation: Carrying out compliance rectification of the enterprises involved in the case is an important institutional innovation that promotes equal emphasis on "punishment" and "governance", and promotes the lawful and compliant operation of enterprises. Compliance management is an important component of modern management and improved internal governance in enterprises, and it is also an inherent requirement for enterprises to strengthen internal control and operate steadily. It is also the fundamental path for long-term development of enterprises. Enterprises should carry out compliance work as early as possible to avoid risks.

Overseas information

1. The Australian government has started consulting on anti money laundering reform

The Australian government has begun negotiations on expanding the anti money laundering (AML) and counter-terrorism financing (CTF) systems to non-financial entities. (Source: STEP)

Recommendation: Australia is one of the only three countries committed to complying with the Financial Action Task Force (FATF) regulations but not regulating specific non-financial institutions and industries (DNFBPs). This reform will require lawyers to conduct customer due diligence and transaction monitoring in certain high-risk situations, such as holding customer funds on trust.

2. Charities in England and Wales have received new guidance on financial control

The Charity Commission for England and Wales has released the latest guidelines on financial controls for charitable institutions to prevent fraud and the risk of new technologies. (Source: STEP)

Recommendation: The revised "Guidelines for Internal Financial Control of Charity Institutions" (CC8) cover issues that did not exist at the time of initial drafting or were widely related to the Charity Committee. Strong internal financial control can play an important role in ensuring that trustees can protect their resources.