CCTV News: In this year's government work report, there is a new term that is eye-catching, which is the "differentiated regulatory system for venture capital funds." What is the "differentiated regulatory system for venture capital funds"? Why propose this system? What does this system mean? Let’s see the expert’s interpretation.

Simplely understand, the "Visit Capital Fund Differentiated Supervision System" is a differentiated regulatory policy for different types of venture capital funds based on investment stage, risk characteristics, investment strategies and other characteristics. Why does this year's government work report emphasize this system?

Tian Xuan, dean of the National Institute of Finance at Tsinghua University, said: "Our country's venture capital market is actually developing very fast. So this time, the government work report proposes that we need differentiated supervision, which is actually to adapt to local conditions and not to have a one-size-fits-all approach."

Value capital funds face different risks and needs at different investment stages, and the industry focus of different venture capital funds is also different. Experts said that differentiated supervision can better adapt to the needs of the venture capital industry and promote the healthy development of venture capital funds.

Dong Ximiao, chief researcher of China Merchants Union, said: "A unified regulatory framework is difficult to fully adapt to the needs of the industry, and differentiated supervision has always been the voice of the market. Through differentiated supervision, the characteristics of different types of funds can be better matched, regulatory efficiency can be improved, and compliance costs can be reduced."

How to achieve differentiated supervision of venture capital funds?

Differential supervision is so important, so how should it be implemented specifically? Experts said that in view of the three major characteristics of "high risk, long cycle and strong professionalism" in the venture capital industry, the policy has built a three-dimensional regulatory system.

Tian Lihui, professor of finance at Nankai University, said: "Implement 'step access' for angel, early and growth-stage funds. For funds that focus on 'investment early and small', moderately relax the fundraising threshold and establish a fault-tolerant and exemption mechanism; for mature funds, strengthen penetration supervision and establish a leverage dynamic monitoring mechanism."

It can be understood in this way that with a differentiated regulatory system, it is equivalent to "tailoring" different venture capital funds: early-stage funds are like "seedling breeders", and need to loosen the soil to cultivate innovative seedlings; mature funds need "gatekeepers" to keep a close eye on risks and build a solid defense line.

Of course, this system is not only differentiated in supervision based on scale, but also customized according to industry. For example, for strategic emerging industries such as integrated circuits and biomedicine, there are "policy gift packages" such as tax refunds and risk compensation. For high-leverage mergers and acquisitions, a "circuit breaking mechanism" is set up to ensure that the risk prevention and control threshold is moved forward.

Tian Xuan, dean of the National Institute of Finance at Tsinghua University, said: "For example, funds investing in mergers and acquisitions, we may pay more attention to anti-monopoly, such as whether this market concentration is involved to prevent unfair competition."

Differential supervision Venture capital ushers in more patient capital

In the interview, experts said that the differentiated supervision of venture capital funds requires more policy-based financial support, and ultimately achieve the growth of patient capital and accelerate the development of venture capital.

The differentiated supervision of venture capital funds requires financial support. On the one hand, the investment costs of venture capital funds can be reduced and the enthusiasm for investment can be increased through tax incentives, financial subsidies, loan interest subsidies, etc.; on the other hand, long-term funds such as insurance funds, bank funds and social security funds are encouraged to gradually enter the venture capital field and further expand the source of financing. Dong Ximiao, chief researcher of China Merchants Union, said: "Strengthening policy-based financial support is to leverage more long-term and low-cost funds into the field of scientific and technological innovation to solve the problem of long-term and medium- and long-term capital shortage."

Of course, funds must not only enter the venture capital field, but also be patient and become patient capital that can accompany the growth of enterprises for a long time and bear higher risks. To cultivate patient capital, government departments, financial institutions, enterprises and other companies need to work together and implement it.

Dong Ximiao said: "To strengthen patient capital not only requires entrepreneurs to have a long-term vision, but also requires building an institutional environment and market environment where funds are invested in and capital are "long-term". For example, by extending investment cycles and optimizing exit mechanisms, capital is encouraged to accompany enterprises to cross the "death valley" of innovation; through macro-policy regulation, it provides a stable, transparent and predictable policy environment for patient capital."

Experts said that improving the differentiated regulatory system for venture capital funds, strengthening policy-based financial support, accelerating the development of venture capital, and strengthening patient capital will inject more long-term capital into the venture capital industry and lead more capital to gather in the field of cultivating new quality productivity.

Tian Lihui, professor of finance at Nankai University, said: "I believe that under the guidance of policies and the promotion of the market, my country's venture capital fund industry will usher in a broader development prospect and contribute more to scientific and technological innovation and industrial upgrading. This policy orientation not only points out the development direction for the venture capital industry, but also injects new impetus into the high-quality development of our country's economy."