People's Bank of China, China Securities Regulatory Commission: Enrich the Bond Product System for Technological Innovation and Accelerate the Construction of a Multi-tiered Bond Market

The People's Bank of China (PBOC) and the China Securities Regulatory Commission (CSRC) announced that they would enrich the product lineup of sci-tech innovation bonds and accelerate the construction of a multi-tiered bond market.

(1) Three types of institutions, namely financial institutions, sci-tech enterprises, and private equity and venture capital investment institutions (hereinafter referred to as "equity investment institutions"), may issue sci-tech innovation bonds to raise funds for supporting investment and financing in the field of sci-tech innovation.

(2) Financial institutions, including commercial banks, securities companies, and financial asset investment companies, may issue sci-tech innovation bonds, focusing on their core businesses and leveraging their professional strengths in investment and financing services. They may use the raised funds in accordance with the law through various channels, such as loans, equity, bond, and fund investments, and capital intermediary services, to specifically support businesses in the field of sci-tech innovation.

(3) Sci-tech enterprises may issue sci-tech innovation bonds to raise funds for product design, R&D, project construction, operation, and mergers and acquisitions in the field of sci-tech innovation.

(4) Equity investment institutions with extensive investment experience, outstanding management performance, and excellent management teams may issue sci-tech innovation bonds to raise funds for the establishment and expansion of private equity investment funds.

(5) Issuers may flexibly choose the issuance method and financing term, and innovatively set bond terms, including arrangements for equity-linked structures, issuance payments, principal and interest repayments, etc., to better match the characteristics of fund usage and financing needs.

Announcement No. 8 [2025] of the People's Bank of China and the China Securities Regulatory Commission

To implement the spirit of the Third Plenary Session of the 20th CPC Central Committee, accelerate the development of a multi-tiered bond market, establish a sci-tech financial system compatible with sci-tech innovation, strengthen financial support for major national sci-tech tasks and sci-tech small and medium-sized enterprises, and improve support policies for long-term capital investment in early-stage, small-scale, long-term, and hard-tech projects, we hereby announce the following matters regarding the support for the issuance of sci-tech innovation bonds:

I. Enrich the product lineup of sci-tech innovation bonds and accelerate the construction of a multi-tiered bond market

(1) Three types of institutions, namely financial institutions, sci-tech enterprises, and private equity and venture capital investment institutions (hereinafter referred to as "equity investment institutions"), may issue sci-tech innovation bonds to raise funds for supporting investment and financing in the field of sci-tech innovation.

(2) Financial institutions, including commercial banks, securities companies, and financial asset investment companies, may issue sci-tech innovation bonds, focusing on their core businesses and leveraging their professional strengths in investment and financing services. They may use the raised funds in accordance with the law through various channels, such as loans, equity, bond, and fund investments, and capital intermediary services, to specifically support businesses in the field of sci-tech innovation.

(3) Sci-tech enterprises may issue sci-tech innovation bonds to raise funds for product design, R&D, project construction, operation, and mergers and acquisitions in the field of sci-tech innovation.

(IV) Equity investment institutions with extensive investment experience, outstanding management performance, and excellent management teams may issue science and technology innovation bonds to raise funds for the establishment and expansion of private equity investment funds.

(V) Issuers may flexibly choose the issuance method and financing term, and innovatively set bond terms, including arrangements for equity-linked structures, issuance payments, principal and interest repayments, etc., to better match the characteristics of fund utilization and financing needs.

II. Improve the Supporting Mechanisms for Science and Technology Innovation Bonds to Facilitate Financing

(VI) Optimize the issuance management process for science and technology innovation bonds to enhance financing efficiency, and support issuers in flexibly issuing bonds in phases according to the characteristics of fund utilization. Simplify the information disclosure rules for science and technology innovation bonds, and issuers may agree with investors to exempt the disclosure of relevant information. Financial institutions may adopt a balance management approach when issuing science and technology innovation bonds.

(VII) Innovate the credit rating system for science and technology innovation bonds. Credit rating agencies may break away from the traditional asset- and scale-focused rating approach and reasonably design specialized rating methods and symbols based on the characteristics of equity investment institutions, technology-based enterprises, and science and technology innovation businesses, to improve the forward-looking nature and differentiation of ratings.

(VIII) Establish a specialized underwriting evaluation system and market-making mechanism for science and technology innovation bonds, organize market makers to provide specialized market-making quotation services for science and technology innovation bonds, and establish a linkage mechanism between underwriting and market-making. Increase the weight of underwriting and market-making of science and technology innovation bonds in the evaluation systems of underwriters and market makers.

(IX) Various financial institutions, asset management institutions, social security funds, enterprise annuities, insurance funds, pension funds, etc., may invest in science and technology innovation bonds. Encourage the creation of science and technology innovation bond indices and products linked to relevant indices.

(X) Improve the risk diversification and sharing mechanism for science and technology innovation bonds. Financial institutions such as commercial banks, insurance companies, and securities companies, as well as professional credit enhancement institutions and guarantee institutions, may support the issuance and investment transactions of science and technology innovation bonds by engaging in businesses such as credit protection tools, credit risk mitigation warrants, credit default swap contracts, and guarantees, based on their own risk pricing capabilities and management levels.

(XI) Qualified localities may rely on their own financial resources to establish risk compensation funds or introduce other preferential policy measures to provide support measures such as interest subsidies and government financing guarantees for science and technology innovation bonds.

(XII) Strengthen the ex-post management of science and technology innovation bonds to ensure that the raised funds are used to support the development of the science and technology innovation sector. Include science and technology innovation bonds in the evaluation of the quality and efficiency of financial institutions' science and technology financial services.

(XIII) Self-regulatory organizations in the interbank bond market and the exchange bond market should expedite the improvement of supporting rules for science and technology innovation bonds. Relevant market infrastructure institutions may provide specialized services for science and technology innovation bonds, including issuance, trading, registration and custody, clearing and settlement, and appropriately reduce or exempt relevant service fees.

People's Bank of China

China Securities Regulatory Commission

May 6, 2025