April 17, 2018
This document was translated from the original Chinese by New America’s DigiChina project. For analysis of its positioning and implications, see the companion piece, Unleashing China’s Capital Markets to Build a ‘Cyber Superpower.’
Guiding Opinions on Promoting Capital Markets to Serve [the Strategy of] Building China Into a Cyber Superpower
Office of the Central Cyberspace Affairs Commission (Cyberspace Administration of China)
China Securities Regulatory Commission
Zhongban Document No. 3, 2018
March 30, 2018
Since the 18th Party Congress, the Party Central Committee with Comrade Xi Jinping at its core has placed a high degree of importance on cybersecurity and informatization work. Since then, China’s cybersecurity and informatization undertaking has made major headway, and [the strategy of] building China into a cyber superpower has moved forward without interruption. This has given rise to a large number of cybersecurity and informatization enterprises in sectors including the Internet, information equipment manufacturing, information transmission, and information technology services, among other sectors, and it has effectively expanded the space for economic development, while providing new momentum to deepen supply-side structural reforms. In recent years, China’s multi-tiered capital markets have steadily developed, and the market’s capacity to allocate resources has continuously increased. These Opinions are put forward in order to give further play to the capital markets’ active role in serving the strategy of building China into a cyber superpower and accelerating the implementation of the cyber superpower strategy, and to advance the standardized development of cybersecurity and informatization enterprises.
I) Overall Requirements
In order to thoroughly implement the spirit of the 19th Party Congress: use Xi Jinping’s Theory of Socialism with Chinese Characteristics for a New Era as a guide, give full play to the capital markets’ important role in allocating resources, establish and perfect an interdepartmental coordination mechanism, standardize and promote the innovative development of Internet-based enterprises, and push forward the building of a cyber superpower and digital China.
(1) Promote coordinated development between the cybersecurity and informatization undertaking and capital markets. Firmly grasp the historic opportunity, within which the world economy is accelerating toward a transition in economic activity that takes its major content from the network and information technology industry, to give full play to the capital markets’ supporting and safeguarding roles, better serve national strategy, accelerate development of the digital economy, energetically train cybersecurity and informatization companies, and inject new momentum for capital markets.
(2) Safeguard national cybersecurity and financial security. Strengthen oversight, perfect the cybersecurity risk management system, guide Internet-based companies to strengthen cybersecurity management as they develop through the capital markets, standardize and strengthen information disclosure among cybersecurity and informatization companies, strengthen the supervision and handling of illegal information on online capital markets, and promote the standardized development of such companies.
(3) Advance joint action in cybersecurity and informatization and securities supervision work. In order to advance the theme of cybersecurity and informatization development centered on capital markets, strengthen coordinated action in cybersecurity and informatization and securities supervision work, give full play to the capital markets’ role in allocating resources, promote the main implementing responsibility of companies, deepen industry supervision and management, build a working consensus, and form collaborative oversight effort.
II) Strengthen policy guidance, and promote the standardized development of cybersecurity and informatization enterprises.
(4) Support cybersecurity and informatization enterprises to serve national strategies. Guide cybersecurity and informatization enterprises to choose development directions that center on the goals of building China into a cyber superpower; actively support important projects that are in keeping with the direction of national strategic plans and industrial policies, are conducive to advancing independent innovation in network and information technologies and mastering key and core technologies, and improve cybersecurity support capabilities.
(5) Improve the standard operating level of cybersecurity and informatization enterprises. Guide cybersecurity and informatization enterprises in compliance with national laws and regulations, industry norms, and business standards; establish a standard corporate governance structure and sound internal control systems; adhere to legal and sound operating principles and models; participate in orderly market competition; ensure that the company’s important assets, core technologies, or other major rights and interests are clear. Guide cybersecurity and informatization enterprises to take measures to prevent illegal securities and futures business activities and unfair market competition or monopolistic behavior.
(6) Implement network and information security safeguards. Guide cybersecurity and informatization enterprises to comply with laws and regulations and systems, including the Cybersecurity Law of the People’s Republic of China, Administrative Measures on Internet Information Services, Internet News Information Service Management Regulations, Internet Products and Services Security Auditing Measures (trial), and other laws, regulations, and systems; improve network and information security awareness; establish and improve the implementation of network and information security assurance measures; safeguard national cyberspace sovereignty, security, and development interests; actively participate in the implementation of security and protection for national critical information infrastructure; safeguard citizens’ cyberspace legitimate rights and interests; and ensure the security of personal information and important data.
(7) Improve the quality of information disclosure. Combine the characteristics of cybersecurity and informatization enterprise operating services and models; advance the scope and soundness of cybersecurity and informatization enterprises’ sub-sectoral information disclosure requirements. Guide cybersecurity and informatization enterprises combining the actual development situation and industry characteristics; strictly implement the information reporting and disclosure system; comprehensively and completely report or disclose: network and information security management, primary business models and operational status, enterprise equity structures, who the actual controllers are, and the status of all beneficiaries and changes, to protect the legitimate rights and interests of investors.
III) Give free rein to the role of capital markets to promote the accelerated development of cybersecurity and informatization enterprises.
(8) Support cybersecurity and informatization enterprises that satisfy conditions to use multi-level capital markets to expand and grow strong. Accelerate support for and cultivation of a set of cybersecurity and informatization enterprises with strong indigenous innovation capabilities and powerful development potential to realize initial public offerings and refinancing on the Main Board, the SME Board, and the Growth Enterprises Market Board [also known as the Second-board Market]. Encourage small and medium-sized cybersecurity and informatization enterprises with a sectoral competitive edge to list themselves on the National Equities Exchange and Quotations Co., Ltd. Encourage medium, small, and micro-sized cybersecurity and informatization enterprises to list on regional equity markets. Broaden bond fundraising channels, and support cybersecurity and informatization enterprises that satisfy conditions to issue corporate bonds, convertible bonds, etc.
(9) Promote mergers, acquisitions, and reorganizations of cybersecurity and informatization enterprises. Encourage cybersecurity and informatization enterprises to perfect industry chains, attract and absorb advanced foreign technology, participate in global resource integration, enhance technological innovation and market competition capabilities through mergers, acquisitions, and reorganizations. Through using capital market mergers, acquisitions, and reorganizations, support the accelerated development of cybersecurity and informatization enterprises deeply integrated with the middle and high-end manufacturing sectors, drive middle and high-end consumption, and forge a set of vanguard cybersecurity and informatization enterprises capable of grasping critical and core technologies, with prominent innovation capabilities and strong international competitiveness.
(10) Perfect and optimize the investment environment. Forge a market environment beneficial to the participation of all kinds of investment entities, optimize investment structures, diversify investment entities, perfect investment guidance policies, give full rein to the role of government investment funds, private equity funds, etc., to provide capital support for the development of cybersecurity and informatization enterprises.
(11) Further strengthen financial services capabilities. Give rein to the positive role of sponsoring bodies, financial consultants, law firms, accounting firms, and other such securities and futures trading and services bodies, enhance specialized service capabilities and professional quality, innovate financial products and services, and stimulate cybersecurity and informatization enterprises to link up efficiently with capital markets.
IV) Strengthen organizational support.
(12) Establish work coordination mechanisms. Establish and improve the work coordination mechanisms of cybersecurity and informatization departments and securities supervision departments, strengthen coordination and cooperation in the initial listings of cybersecurity and informatization enterprises, and mergers and acquisitions, etc. Actively support enterprises that satisfy conditions and national strategies, and comply with the requirements of national cybersecurity management, to make use of capital markets to grow bigger and stronger, and promote capital markets to serve the strategy of building China into a cyber superpower.
(13) Promote information sharing. Strengthen the communication and information sharing between cybersecurity and informatization departments and securities supervision departments, and establish sound information sharing mechanisms. Cybersecurity and informatization enterprises will implement national major strategies, industry supervision policies, and credit violations records; and applications for initial listing, refinancing, mergers, acquisitions, and restructuring, and other information will be included within the scope of information sharing.
(14) Provide professional services. Bring government, industry associations, research institutions, and enterprises into full play, strengthen the investment and financing service system in the cybersecurity and informatization sectors, support the development of investment and financing service institutions, build a professional services platform for investment and financing services, and promote the organization of alliances, forums, and seminars, etc., that will form and promote exchanges and cooperation between cybersecurity and informatization enterprises and investment institutions, intermediary services agencies, etc.
(15) Strengthen policy research and advocacy. Give play to the expert roles of the cybersecurity and informatization and investment and finance industries, and strengthen the training and policy promotion of cybersecurity and informatization enterprises regarding market listing and financial affairs. Study new situations and new issues of cybersecurity and informatization enterprises with respect to accessing capital markets, promote the piloting of capital market reform policies for the cybersecurity and informatization sectors, and focus on improving the alignment and adaptability of regulatory policies.