Legislation roundup: VC insurance capital, income tax and stock option trading

Insurance

China Insurance Regulatory Commission, Circular on Matters Relevant to the Investment of Insurance Capital in Venture Capital Funds
中国保险监督管理委员会关于保险资金投资创业投资基金有关事项的通知

The institution that manages a venture capital fund in which insurance capital is invested shall have at least five years of venture capital management experience and aggregate venture capital assets under its management of not less than Rmb1 billion. An insurance company that invests in a venture capital fund shall have a solvency adequacy ratio of not less than 120% as at the end of the preceding quarter before the investment.

See the full translation.

Further reading
Tentative Measures for the Administration of the Application of Insurance Capital (Revised)


Tax

State Administration of Taxation, Measures for the Administration of Individual Income Tax on Income Derived from the Transfer of Equity (Trial Implementation)
国家税务总局股权转让所得个人所得税管理办法 (试行)

For equity obtained by way of a capital contribution in cash, the original value of the equity shall be confirmed as the total of the price actually paid and the reasonable taxes and expenses directly related to the obtaining of the equity.

For equity obtained by way of a capital contribution made in the form of non-monetary assets, the original value of the equity shall be confirmed as the total of the price of the non-monetary assets at the time of the investment as recognised or determined by the tax authority and the reasonable taxes and expenses directly related to the obtaining of the equity.

See the digest for more details

Further reading
PRC Individual Income Tax Law (6th Revision)
Implementing Rules for the PRC Law on the Administration of the Levy and Collection of Taxes (Revised)


Capital markets

China Securities Regulatory Commission, Measures for the Administration of the Pilot Project for Stock Option Trading (Draft for Comments)
中国证券监督管理委员会股票期权交易试点管理办法 (征求意见稿)

Subject to the approval of the China Securities Regulatory Commission (CSRC), a stock exchange may launch stock option trading. The listing, and the suspension, cancellation and resumption of trading of traded stock option products shall be subject to the approval of the CSRC. A securities company may engage in stock option brokerage business, business for its own account and market making business, and a futures company may engage in stock option brokerage business and spot trading securities brokerage business related to stock option covering, position opening and exercising.

Further reading
Regulations for the Administration of Futures Trading (Revised)
PRC Securities Law (Amended)