Attention:all Districts People’s Governments, and all Commissions, Offices and Bureaus (Administrations) of the Municipal People’sGovernment:

With the consent of the Municipal People’sGovernment, we hereby issue the Several Opinions on Accelerating Building Shanghai into a Global Asset Management Center to you, and request you to implement them conscientiously. 

General Office of Shanghai Municipal People’s Government

May 14, 2021

 

Several Opinions on Accelerating Building Shanghai into a

Global Asset Management Center

 

According to the requirements of the 14^th Five-Year Plan for Shanghai Municipality National Economic and Social Development and the Outline of Long-term Goals for 2035, the several opinions on accelerating building Shanghai into a Global Asset Management Center are put forward as follows:

I. Guiding Ideology

Guided by Xi Jinping’s Thought on Socialism with Chinese Characteristics for a New Era, thoroughly implement the spirit of General Secretary Xi Jinping’s important speech on his visit to Shanghai and the important speech at the 30^th Anniversary of Pudong’s Development and Opening Up, fully implement the requirements of the “Three Tasks” and the “Four Functions”, seize the opportunity of global economic and financial reformation, focus on the core elements, advance opening up, speed up the transformation of science and technology into productivity, strengthen service guarantee, and build a sound, innovative and dynamic asset management ecosystem. Promote the transformation of direct investment, improve the efficiency of capital supply, support high-quality economic development, enhance the ability of global resource allocation, and further enhance the radiation and influence of Shanghai International Financial Center.

II. Basic Principles

1. Adhere to the policy of overall planning and focus on the key breakthroughs. Scientifically plan the overall development of Shanghai asset management industry and optimize the industry layout. Focus on and take the lead in exploring the key areas and key links.

2. Adhere to the international benchmarks and highlight the characteristics of Shanghai. Learn from the useful experience of the mature global asset management centers and other regions in China so as to learn widely from others’ strong points. Give full play to the development advantages of Shanghai International Financial Center, being leading and innovative.

3. Adhere to the policy of laying down a solid foundation and lay more emphasis upon brand building. Strengthen the cultivation of asset management institutions and the construction of supporting items such as industry standardization, self-discipline, rule of law and credit, and build a solid foundation for healthy development. Forge a Shanghai asset management brand, and expand industry reputation and international influence.

4. Adhere to market guidance theory and a policy of strengthening government services. Give play to the decisive role of market allocation of resources and gather various elements of the asset management industry. Continuously optimize government services and create a world-class development environment.

III. Development Goals

By 2025, Shanghai will strive hard to basically build a comprehensive and open asset management hub with high concentration of managerial elements, high internationalization level and relatively complete ecological system, and become an important hub of asset management in Asia and enter the forefront list of global asset management centers .

Shanghai Municipality will attract and foster more than 10 leading asset management institutions in the world, and more than 100 influential ones, and gather a group of professional, international and innovative asset management talents to become a “gathering place” for the like institutions and talents. Build an innovative mechanism of benign interaction between market and supervision and organic combination of asset management and financial technology, and become an “innovative place” for products and services with complete categories, of various varieties and with professional standards. Improve the opening-up level of the financial market and the asset management industry, build the central node of cross-border financial resource allocation, and become the “junction” of market and capital. Promote market entities, industry self-discipline, financial supervision and government services to form a joint force, jointly strengthen investor education and protection of their rights and interests, and become a “new highland” for environment and services.

IV. Key Tasks

1. Improve the Diversified Institutional System And Enrich the Entities of the Asset Management Industry

(1) Gather and foster asset management institutions. Actively introduce institutions such as bank financial management, insurance asset management and financial asset investment and their professional subsidiaries, support securities, funds, trusts, futures and other institutions and their professional subsidiaries to settle down, and attract asset management institutions such as private banks, family trusts and fund sales. Support qualified foreign investors to take the lead in setting up securities, funds and pension management institutions with sole or joint investment, and financial management companies and investment research, sales and operation, compliance and risk control platforms with joint investment in Shanghai. Gather all kinds of private placement investment funds and private equity funds (venture capital funds). Explore the establishment of seed funds to support the development of small and medium-sized asset management institutions, and encourage the establishment of equity transferring funds. Strengthen the cultivation of asset management institutions, support qualified fund management and other asset management institutions to be listed on multi-level capital markets, and expand the business layout at home and abroad.

(2) Improve the service capacity of professional institutions. Focus on the development of service institutions such as fund registration, valuation accounting, fund evaluation, currency brokerage as well as consultation and information, and introduce intermediary institutions such as accounting and auditing, legal services, credit rating and asset evaluation.  Research and establish professional trusteeship institutions. Promote professional institutions to enhance their professional capabilities, and encourage industry self-regulatory organizations to establish service quality evaluation mechanisms for professional institutions.

(3) Strengthen the compliance operation of asset management institutions. Guide asset management institutions to strengthen the investor-centered service idea and improve internal control and accountability mechanisms. Promote asset management institutions to accurately carry out risk assessment of asset management products and strengthen investor suitability management; Follow the principle of prudent operation and formulate scientific and reasonable investment strategies and risk management systems. Promote asset management institutions to strengthen investor education and improve their financial knowledge and risk awareness; Improve the initiative, authenticity, accuracy, completeness and timeliness of information disclosure of asset management products.

2. Innovate Asset Management Products And Services To Meet the Diversified Needs of Investors

(4) Enhance the innovation of asset management products. Enrich the categories of fixed-income products and increase the distribution of equity products. On the basis of CSI Zhangjiang Independent Innovation 50 Index, launch the Exchange Traded Fund (ETF) products to promote the linkage between the Shanghai International Financial Center and the Shanghai Science and Technology Innovation Center. Formulate special policies to support the pilot projects of the Real Estates Investment Trusts (REITs) in the field of infrastructure, and build the most-preferred place for issuing and trading infrastructure REITs products nationwide. Enrich commodity fund products and enhance the price influence of important commodities. Strengthen the research and development of products such as Manager of Managers (MOM) and Fund of Funds (FOF). Improve the service standards of family trust products. Promote the expansion of pilot institutions and products of personal tax-deferred type of commercial pension insurance, and innovate pension financial products such as pension insurance and pension trust. Support asset management institutions to apply for the Shanghai Financial Innovation Award.

(5) Expand the service modes and fields of asset management. Support banks, funds, securities and other institutions to apply for securities fund investment consultant qualification, and encourage the establishment of investment consulting professional subsidiaries. Support banks, financial management subsidiaries of banks, and insurance institutions to cooperate with asset management institutions in Shanghai. Promote asset management institutions to participate in the management of basic old-age insurance funds, enterprise annuities and occupational annuities. Support asset management institutions to increase investment in new infrastructure construction, new urbanization construction and major project construction in this Municipality. Support financial management subsidiaries of banks, and specialized subsidiaries of financial asset investment companies in Shanghai to invest in equities of key construction projects and unlisted enterprises in Lingang Special Area of Pilot Free Trade Zone and in the Yangtze River Delta. Improve the convenience of registration and establishment of charitable foundations, and encourage asset management institutions to provide quality services.

(6) Increase investment in the environment-protection field. Expand the issuance scale of green bonds, promote securitization of green credit assets, account receivables of energy conservation and emission reduction projects, and guide asset management institutions to allocate green assets. Develop green stock index, green bond index and related investment products, and carry out green funds, green trusts and other businesses. Encourage asset management institutions to disclose environmental, social and governance (ESG) information and strengthen ESG product research and development. Cultivate carbon asset management institutions and professional investors, and promote their active participation in carbon market transactions. Promote asset management institutions to carry out carbon accounting, develop carbon financial products such as carbon fund, carbon trust, carbon index and carbon forward trading, and study climate investment and financing products, so as to build Shanghai into a green financial hub connecting China with foreign countries, and help achieve the goal of “carbon peaking and carbon neutrality”.

(7) Deepen the digital application of the asset management industry. Promote asset management institutions to increase the use of next-generation digital technologies such as information and communication, artificial intelligence, blockchain, industrial internet and 5G. Encourage large asset management institutions to set up fintech subsidiaries and fintech research and development centers in Shanghai. Support asset management institutions to participate in the financial science and technology innovation supervision pilot program. Promote fintech enterprises to provide asset management institutions, lawfully, with services in the fields of sales channels, investment research and trading, consulting, compliance risk control, accounting management valuation, customer service, etc. and research and develop general technology products applicable in the middle and background of small and medium-sized asset management institutions.

3. Give Play to the Basic Role of the Financial Market And Enhance the Global Resource Allocation Capacity

(8) Improve asset allocation and risk management functions. Enhance the global resource allocation capacity of the Shanghai financial market, and provide diversified trading services and risk hedging tools for the asset management industry. Expand the opening-up of the bond market to the outside world and enrich the types and quantity of overseas investors. Develop the RMB interest rate and foreign exchange derivative products market, and enrich RMB interest rate options and other product types. Enrich stocks, bonds, funds and other products of the stock market. Optimize the investor structure in the futures market and promote the establishment of a nationwide registration center for commodity warehouse receipts. Introduce more derivatives with international influence, such as commodity futures options, treasury bonds futures options and stock index futures options. Further improve the product system and service functions of the gold market, and consolidate Shanghai’s position in the international gold market. Create more standardized bill products and optimize the function of bill platform in supply chain. Improve the registration function of trust products, and explore the construction of a nationwide centralized trading platform for beneficiary rights of trust products. Support the regional equity market to build an equity investment and venture capital share transfer platform, and broaden the exit channels of private equity and venture capital.

(9) Smooth investment channels for asset management. Support the cooperation between the inter-bank bond market and the exchange bond market. Encourage banks to participate in the exchangebond investment, and promote more banks, insurance institutions and fund management institutions to participate in treasury bond futures trading. Research the possibility for banks to enter the commodity futures market, and promote insurance funds to invest in gold, oil and other commodities  through relevant Shanghai exchanges. Support asset management products to participate in fixed placement, offline subscription and other businesses. Encourage multinational companies to set up global or regional fund management centers in Shanghai, which may enter the inter-bank foreign exchange market for transactions upon approval.

(10) Promote international cooperation in financial markets. Broaden the scope of countries and regions with mutual exchange of securities transactions and mutual recognition of funds, and develop depositary receipts business. Expand the internationalization of specific varieties of commodity futures such as energy, the chemical industry and non-ferrous metals. Explore the possibility of qualified foreign investors to participate in treasury bond futures trading. Gradually promote the transformation of domestic settlement agents into custodian banks, and provide diversified services for foreign investors to enter the inter-bank bond market. Encourage financial markets to strengthen regulatory mutual recognition and business cooperation with major overseas financial markets.

4. Expand the Opening up of the Industry And Improve the Internationalization Level of Asset Management 

(11) Promote pilot programs in opening and innovation. Build an international financial asset trading platform. Promote domestic and foreign long-term funds such as social security funds, insurance funds and qualified sovereign funds and pension funds to enter the market according to regulations. Support foreign banks in Shanghai to apply for the securities investment fund custody business qualification, and the underwriter qualification in the inter-bank bond market. Deepen the business of “Bond Connect”, “Shanghai-Hong Kong Stock Connect” and “Shanghai-London Stock Connect”, and explore the establishment of cross-border financial management channels for residents. Support qualified asset management institutions to apply for the Qualified Domestic Institutional Investor (QDII) business qualification. Encourage the asset management institutions in this Municipality to set up, acquire and participate in asset management institutions overseas.

(12) Deepen the QFLP and the QDLP pilot projects. Promote the Qualified Foreign Limited Partner (QFLP) piloting to manage domestic RMB funds, and encourage qualified domestic-funded institutions to participate in the QFLP pilot. Promote QFLP pilot institutions to invest in the equity of domestic non-listed companies, private placement of listed companies, mezzanine funds, special assets, private equity, venture capital funds, etc. Support overseas well-known asset management institutions and qualified domestic institutions to apply for the Qualified　Domestic　Limited　Partner (QDLP) pilot qualification. Support the QDLP pilot institutions to invest in overseas private equity funds and unlisted enterprises’ equity and creditor’s rights, securities market, commodities, financial derivatives and other fields. Explore and promote foreign-funded asset management institutions to carry out the QDLP business, theWhole Foreign Owned Enterprise or Private Fund Management (WFOE PFM) business and other businesses as one entity. Encourage pilot institutions to set up global or regional management centers in this Municipality to carry out cross-border two-way investment management. Promote cooperation of the institutions of banks financial management and insurance asset management with the pilot institutions.

(13) Promote the opening-up of key areas to a higher level. Support asset management institutions to carry out business innovations such as offshore securities investment and offshore fund management, and explore the development of offshore RMB transactions. Explore effective ways for cross-border fund management of asset management institutions in Lingang Special Area of Pilot Free Trade Zone, and research offshore financial system suitable for a higher level of opening-up. Explore the safety assessment and classified management mechanism of cross-border financial data flow of asset management institutions, support qualified foreign-funded asset management institutions to submit relevant data overseas due to the needs of group management, and open up the channels for asset management institutions to obtain and provide financial information overseas.

5. Strengthen the Introduction And Training of High-end Talents And Cultivate Fertile Soil for Asset Management Talents

(14) Vigorously introduce world-class asset management talents. Actively seek the support from the national financial management department to enable Shanghai to take the lead in piloting international asset management talents’ employment access and cross-border performance of duties. Upon qualified asset management talents’ successful registration, their overseas experience shall be deemed as domestic experience. Recruit high-end talents from overseas well-known asset management institutions. In accordance with the relevant provisions of the State and this Municipality, provide convenience for talents in short supply in the asset management industry in terms of household registration, work permit, permanent residence, talent apartments, etc.

(15) Actively cultivate various kinds of asset management talents. Asset management talents will be included in the key support scope of Shanghai overseas, leading and young talents. Give play to the role of asset management institutions and industry self-discipline organizations, and carry out professional qualification training. Relying on the Shanghai Financial Talents Practice Base and Training Base, strengthen the cultivation of core asset management talents. Deepen the cooperation between industry and education, encourage colleges and universities to set up related courses, research and set up undergraduate and postgraduate programs in asset management, and cultivate basic talents in the asset management industry. Establish a talent database of the asset management industry.

6. Improve Comprehensive Service Capabilities And Optimize the Development Environment of Asset Management

(16) Carry out the construction of legal credit in the asset management industry. Research and promote the docking of policies and systems in related fields of asset management at home and abroad, and asset management institutions may choose to apply overseas laws according to actual conditions through contractual agreements. Support the Shanghai Financial Court to study the trial guidelines for foreign-related asset management cases, and issue typical cases of foreign-related financial disputes. Strengthen intellectual property protection in asset management. Give play to the role of CSI Small and Medium Investors Service Center, the Shanghai Court of Financial Arbitration and the Shanghai International Economic and Trade Arbitration Commission, and build a diversified dispute resolution mechanism with mediation, arbitration and litigation organically linked. Support asset management institutions to use the credit information system of the People’s Bank of China, the capital market integrity information database of the CSRC and the public data platform of the Municipal Big Data Center, and encourage asset management institutions and the Municipal Big Data Center to explore the two-way opening of data according to regulations. Strengthen the exchange and sharing of relevant data and information in the asset management field between administrative and judicial departments.

(17) Strengthen policy support for the asset management industry. Incorporate qualified asset management institutions and professional service institutions into the relevant municipal and district policy support scope, and provide support in the aspects of institution start-up, talent introduction, renting and purchasing office space, etc. Eligible asset management institutions and professional service institutions may enjoy relevant tax policies such as research and development expenses weighted deduction. Optimize the process of registration and alteration of asset management institutions, and continuously improve the convenience of business operation.

(18) Build asset management industry clusters. Make a reasonable geographical planning of asset management institutions based on “one city, one belt and one zone”, of which “one city” refers to building the core functional zone of global asset management center relying on Lujiazui Financial City, “one belt” refers to supporting the north-south extension of the Bund financial agglomeration belt and its deep expansion to form an asset management institution agglomeration belt, and “one zone” refers to building a cross-border asset management demonstration zone in Lingang Special Area of Pilot Free Trade Zone. Encourage relevant districts to build parks, townships and other spatial carriers suitable for the growth and development of asset management institutions, and form a regional asset management layout with distinctive characteristics and complementary development.

(19) Strengthen the brand building of the asset management industry. Support the construction of self-discipline organizations in the asset management industry and set up an expert consultation mechanism for the construction of a global asset management center. Regularly publish the report on the construction of an asset management center, and publish a bilingual Shanghai investment guide for overseas asset management institutions both in Chinese and English. Carry out information monitoring and statistical analysis on the quantity, category and business scale of asset management institutions in Shanghai. Explore the compilation of Shanghai asset management industry development index. Hold international forums on the asset management industry and strengthen exchanges with domestic and foreign asset management center cities. Support financial markets to set up roadshows for financial product distribution. Promote the establishment of asset management research institutions in universities and think tanks. Create a good atmosphere to promote the healthy development of the asset management industry.

V. Organizational Guarantee

Incorporate the creation of a global asset management center into the scope of responsibilities of the Shanghai International Financial Center Construction Promotion Mechanism, and form joint efforts of all parties. Give play to the role of the local coordination mechanism (Shanghai Municipality) of the Office of the Financial Stability Development Committee of the State Council, and promote the interconnection of regulatory information and policies. Relevant districts may formulate policies according to the actual situation.

These opinions shall be effective as of June 1, 2021.