A-shares embrace a new system pilot: VC/PE players are shortlisted as “seasoned veterans”

On July 13th, the Shanghai Stock Exchange officially piloted the introduction of a system for senior professional institutional investors for enterprises applying the fifth set of listing standards on the Science and Technology Innovation Board.

In the "Guidelines No. 8 for the Application of the Rules for Issuance and Listing Review of the Shanghai Stock Exchange - Senior Professional Institutional Investors" (hereinafter referred to as the "Guidelines") issued by the Shanghai Stock Exchange, there are clear guidelines on how to define "senior professional institutional investors".

The reporter noticed that the eligible investment institutions mentioned in the "Guidelines" are mainly VC/PE institutions. In response, Fu Lichun, a financial committee member of the China Market Society, said that this system is beneficial to leading venture capital institutions.

He believes that the "senior professional institutional investor" mechanism will support the pricing and issuance of truly growing enterprises, which helps venture capital institutions to successfully achieve IPO exits. At the same time, leading VC/PE institutions applying to become senior professional institutional investors can further expand their right to speak in the industrial chain. However, for projects that rely on storytelling, high valuations, and low fundamentals, the IPO channel will be significantly narrowed, and the exit pressure will increase. The post - investment empowerment and project quality of venture capital institutions will be more crucial.

Which institutions can apply?

During the 2025 Lujiazui Forum, the China Securities Regulatory Commission launched a series of measures to enhance the inclusiveness and adaptability of the capital market system. Among them, the "1+6" policy of the Science and Technology Innovation Board became the focus of market attention. Among the six reform measures, the first one was to pilot the introduction of a system for senior professional institutional investors for enterprises applying the fifth set of listing standards on the Science and Technology Innovation Board.

The China Securities Regulatory Commission stated that for enterprises applying the fifth set of listing standards on the Science and Technology Innovation Board, the pilot introduction of a system for senior professional institutional investors is to help review institutions and investors enhance their judgment on the scientific and technological innovation attributes and business prospects of enterprises with the professional judgment and real - money investment of these institutional investors.

How to define "senior professional institutional investors" has always been a topic of concern in the market. The "Guidelines" issued yesterday gave clear requirements. Firstly, they should have a sound governance structure, manage a relatively large scale of assets, and have a good credit record. Under this premise, three types of institutions were mentioned:

One is private equity and venture capital fund managers registered with the Asset Management Association of China, private equity investment fund subsidiaries of securities companies, alternative investment subsidiaries of securities companies, and private equity subsidiaries of securities investment fund management companies;

Two is funds established with government funding, such as government investment funds, government - funded industrial investment funds, and government - guided funds;

Three is core enterprises in the industrial chain that master key core technologies and the investment institutions they establish.

In terms of investment experience, the "Guidelines" clearly state that among the invested technology - based enterprises, senior professional institutional investors should have more than 5 enterprises listed on the Science and Technology Innovation Board or more than 10 enterprises listed on major domestic and foreign stock exchanges in the past 5 years.

It is worth noting that if government - affiliated investment institutions and investment institutions under the leading enterprises in the chain that master key core technologies can prove that they have relevant professional investment experience, the number of listed enterprises they have invested in may not be restricted by the above provisions.

According to data from ZERONE, there are more than 170 investment institutions that meet the requirement of "more than 5 enterprises listed on the Science and Technology Innovation Board in the past 5 years", and nearly 80 investment institutions that meet the requirement of "more than 10 enterprises listed on major domestic and foreign stock exchanges".

Strengthen "buyer pricing" and reduce the bubble in issuance valuations

Fu Lichun pointed out that in the past, IPO pricing was often dominated by investment banks, and there was serious gaming in the quotation behavior, resulting in frequent occurrences of the "three highs" problem. The new system clearly requires that the quotations of senior professional institutional investors should have a long - term holding intention and a traceable mechanism, establishing the logic of "who quotes, who pays", which helps to improve the market - based inquiry system under the registration system and promotes the real implementation of "buyer pricing and buyer beware".

"Senior professional institutional investors endorse enterprises with their own funds and reputations, and their share - holding situation is used as a reference for review and registration, forming a substantial risk binding." Lu Zhe, the chief economist of Soochow Securities, told the reporter. "In addition, professional investors have a pricing anchoring effect. The share - holding prices and share - holding ratios of their previous investments in similar companies can be used as a reference for IPO pricing, which helps to reduce the bubble in issuance valuations or the risk of break - even, improve the pricing efficiency of the capital market, and enable more rational allocation of market resources."

Lu Zhe further pointed out that combined with the pre - review mechanism for IPOs, the inquiry cycle can be shortened, further compressing the listing time of high - quality enterprises, improving the overall review efficiency, accelerating the enterprise listing process, and promoting the virtuous cycle of the capital market.

The investment model will shift from "Pre - IPO arbitrage" to full - cycle accompanying

From the perspective of venture capital institutions, the introduction of the "senior professional institutional investor" system is an affirmation of the investment ability of venture capital institutions, and the benefits to leading venture capital institutions are prominent.

The person - in - charge of a state - owned investment institution in North China told the reporter that the fifth set of standards on the Science and Technology Innovation Board is mainly applicable to technology enterprises with high R & D investment, long profit cycles but great growth potential, including biomedicine and semiconductors. However, it is somewhat difficult to identify "hard technology" enterprises in some fields. For example, innovative drugs are characterized by large R & D investment, long cycle for result transformation and application, and high R & D and commercialization risks. Once successful, they may experience explosive or even exponential growth, but it is difficult to judge the investment risk and investment value. "The introduction of senior professional institutional investors is equivalent to adding a judgment indicator."

Sun Jialin, the general manager of Gaotejia Investment Group, pointed out that the introduction of senior professional institutional investors in the "Guidelines" essentially uses professional insights, endorsements, and long - term capital investment to assist regulators and the market in accurately identifying high - quality technology enterprises, reducing the risk of low - quality enterprises "faking it", and guiding funds to flow to the technological frontiers that truly meet the national innovation strategy.

At the same time, Sun Jialin believes that this system is both an opportunity and a challenge for PE institutions. Firstly, the advantages of leading PE institutions are prominent. With rich listing cases, a certain scale of managed assets, and a sound governance structure, leading PE institutions are more likely to meet the recognition criteria for "senior professional institutional investors" and will have a first - mover advantage in the Science and Technology Innovation Board ecosystem, further enhancing their ability to obtain high - quality projects.

"Secondly, it puts forward higher requirements for the professionalism of PE institutions." Sun Jialin believes that the "Guidelines" require that projects should be invested at least 24 months in advance and that investors should continuously hold more than 3% of the shares or an investment amount of no less than 500 million yuan, which means that the investment model will shift from "Pre - IPO arbitrage" to full - cycle accompanying investment, putting forward higher requirements for the professional judgment ability of investment institutions and the matching of fund funds.

In addition, Sun Jialin also said that at the same time, deeply binding the reputation of listed enterprises and professional institutions means that venture capital institutions must strictly control compliance. Therefore, investment institutions must strengthen compliance management. On the one hand, compliance should be pre - positioned, and an independence review mechanism should be established; on the other hand, post - investment management should be strengthened to effectively prevent risks.

This article is from the WeChat public account "FOFWEEKLY", and is published by 36Kr with authorization.