Article 1    In order to thoroughly implement the Outline of the National Plan for Long-term and Medium-Term Scientific and Technological Development, accelerate the promotion of the transformation and application of scientific and technological achievements, and guide social forces and local governments in increasing investment in the transformation of scientific and technological achievements, the central treasury established the national guiding fund for the transformation of scientific and technological achievements (hereinafter referred to as the "Transformation Fund"). These Measures are formulated for regulating the management of the Transformation Fund.

 Article 2    The Transformation Fund is mainly used for supporting the transformation of scientific and technological achievements that are made with financial funds, including the scientific and technological plans (special projects or projects) of the State (industries or departments), the local scientific and technological plans (special projects or projects), and other new technologies, new products, new techniques, new materials, new devices and their systems, etc., created by institutions.

 Article 3    The source of the fund of the Transformation Fund is from the central treasury allocation, investment returns and donations from the society.

 Article 4    The Transformation Fund offers support by way of establishing venture capital sub-funds, providing compensation for loan risks and performance rewards, etc.

 Article 5    The Transformation Fund follows the principles of providing guidance, being indirect, non-profit making and market-orientation.

 Article 6    The national database of projects on the transformation of scientific and technological achievements established by the Ministry of Science and Technology and the Ministry of Finance (hereinafter referred to as the "achievement database") provides information support for the transformation of scientific and technological achievements.

The entities that complete the application projects (topics) under the national scientific and technological plan shall submit the achievement information to the achievement database.

Scientific and technological achievements made by the scientific and technological plans (special projects or projects) of industries, departments and local regions may be included in the achievement database after being examined, approved and recommended by the relevant competent departments and the departments of science and technology of the provinces, autonomous regions, municipalities directly under the Central Government and specially designated cities in the State plan (hereinafter referred to as "at the provincial level"). Other scientific and technological achievements made by institutions subordinate to departments and local regions may be included in the achievement database after being examined, approved and recommended by the relevant competent departments and the departments of science and technology at the provincial level.   

 Article 8    Unless it involves State security, major social public interest and trade secrets, the summary information of the scientific and technological achievements in the achievement database shall be disclosed to the public.

 Article 9    The Transformation Fund and investment institutions that meet the conditions jointly establish venture capital sub-funds (hereinafter referred to as "sub-funds") by way of promotion to make equity investment in enterprises that transform scientific and technological achievements. The Ministry of Science and Technology is responsible for approving the establishment of sub-funds by way of promotion in accordance with the provisions.

The local venture capital guiding funds are encouraged to participate in the establishment of sub-funds by way of promotion.

 Article 10    The Transformation Fund shall not be the largest shareholder or capital contributor of a sub-fund. The shareholding ratio of the Transformation Fund in the sub-fund shall be 20% to 30% of the total value of the sub-fund. The remaining fund shall be raised by the investment institution in accordance with the law.

 Article 11    A sub-fund shall invest in an enterprise that transforms scientific and technological achievements included in the achievement database with the fund that is not less than three times the capital contribution made by the Transformation Fund. Other investment directions shall be in line with the high and new technological areas receiving key support from the State.

 Article 12    A sub-fund shall not offer loans or invest in shares (except investment in listing of enterprises), futures, real estate, securities investment funds, enterprise bonds and financial derivatives and shall not be used for paying for expenditures such as sponsorship and donations. Funds to be invested shall be deposited in banks or used for the purchase of government bonds.

 Article 13    In general, the duration of a sub-fund shall not exceed eight years. Other investors are encouraged to purchase the Transformation Fund's equity interest in the sub-fund.

 Article 14    A sub-fund shall open a custody account at a bank selected by the Ministry of Science and Technology and the Ministry of Finance through a tender. The fund arising from the transfer of equity interest, dividend distribution and liquidation during the duration shall be deposited into the custody account of the sub-fund and shall not be recycled for investment.

 Article 15    A sub-fund shall entrust an investment management company or a management team with management.

 Article 16    The Transformation Fund shall designate a representative to a sub-fund to exercise the duties of a capital contributor towards the sub-fund.

 Article 17    If the annual average return on a sub-fund meets a certain requirement when the duration of the sub-fund ends, the investment management company or the management team may withdraw a certain percentage of the result as the performance commission. All the capital contributors of the sub-fund receive investment return according to their ratios of capital contribution or the stipulations of the relevant agreements and may distribute part of the return as a reward to the investment management company or the management team.

 Article 18    A sub-fund shall set out clearly the relevant matters prescribed in this Chapter in the investor agreements and the articles of association of the sub-fund.

 

 Article 19    The Ministry of Science and Technology and the Ministry of Finance determine cooperative banks through tenders. The Transformation Fund may offer risk compensation in a certain amount for loans extended by cooperative banks that meet the following conditions (hereinafter referred to as the "achievement transformation loans"):

(1) The loan extended to a medium or small enterprise in the scientific and technological field with an annual sales amount of less than RMB 300 million and to be used for the transformation of the scientific and technological achievements included in the achievement database;

(2) The team of the above loan shall be at least one year; and

(3) The compensation for the risk of the achievement transformation loan shall be provided jointly with the capital contribution from the provincial government of the place where the loan is offered.   

 Article 22    The amount of the annual risk compensation amount shall be verified based on the amount of achievement transformation loans extended by the cooperative bank in that year. The compensation ratio shall not exceed 2% of the loan amount.

 Article 23    The cooperative banks shall strengthen the examination, management and supervision of the achievement transformation loans.

 Article 24    The Transformation Fund may offer a one-off fund reward to the enterprises, scientific research institutions, institutions of higher learning, and science and technology-related intermediary service institutions that make outstanding contributions in the transformation of scientific and technological achievements.

 Article 25    The achievements transformed by the targets receiving the performance reward shall meet the following conditions:

(1) Belonging to the scientific and technological achievements prescribed in Article 2 of these Measures;

(2) Playing an important role in fostering strategic emerging industries and supporting the development of the current key industries and critical areas of the State; and

(3) Not receiving funding support provided by the central and local treasury for the transformation of scientific and technological achievements.   Article 26    The projects receiving performance rewards shall be recommended by the relevant departments and the departments of science and technology and the departments of finance at the provincial level to the Ministry of Science and Technology and the Ministry of Finance.

 Article 27    The Ministry of Science and Technology and the Ministry of Finance organize experts or authorize intermediary institutions to evaluate the economic and social benefits of the projects that apply for performance rewards. The Ministry of Science and Technology recommends the targets to be offered the performance rewards and the quota of the performance rewards based on the evaluation results and submits the recommendation to the Ministry of Finance.

 Article 28    The funds from the performance rewards shall be used for the following purposes:

(1) The research and development activities of the enterprises that receive the rewards;

(2) The research and development activities and the activities of achievement transfer and transformation conducted by the scientific research institutions and institutions of higher learning that receive the rewards;

(3) The technological transfer activities of the science and technology-related intermediary service institutions that receive the rewards; and

(4) The rewards given by the entities receiving the rewards to the scientific research personnel making scientific and technological achievements and providing technological services.

 Article 29    The Ministry of Science and Technology and the Ministry of Finance organize the establishment of the expert advisory committee of the Transformation Fund to provide advisory services for the Transformation Fund. The members of the advisory committee are experts in areas such as science and technology, management, law, finance, investment and fiscal matters.

 Article 30    The Ministry of Science and Technology and the Ministry of Finance jointly authorize an institution that meet the conditions to take charge of the routine management work of the Transformation Fund and provide guidance, conduct supervision and organize appraisal.

 Article 31    The management institution being entrusted shall establish the team, internal organization body, management system and risk control mechanism, etc., that fit in with the management and working needs of the Transformation Fund.

 Article 32    The entity that is involved in the provision of information in the implementation process of the Transformation Fund shall guarantee the truthfulness of the information provided and shall assume liability for the consequence caused by the provision of false information.

 Article 33    The Transformation Fund establishes the public disclosure system.

Chapter 7: Supplementary Provisions

 Article 34    The Ministry of Science and Technology and the Ministry of Finance formulate the detailed implementation rules related to the Transformation Fund in accordance with these Measures.

 Article 35    These Measures may apply as the reference for local regions to establish guiding funds for the transformation of scientific and technological achievements.

 Article 36    The Ministry of Finance and the Ministry of Science and Technology are responsible for interpreting these Measures.