On 11 September, 2019, “Xingye Yuanrong-Guangzhou Development Zone Patent License ABS” (shortly referred to as “Guangzhou Patent License ABS”) was successfully launched. It’s another intellectual property rights (IPR) securitization product promoted by SZSE after the issuance of “First Capital - Culture & Technology Leasing ABS (First Tranche)”. The smooth issuance of the product is an innovative practice of SZSE to earnestly implement the plans of the CPC Central Committee and the State Council for conducting IPR securitization, and a powerful measure of the capital market to support national comprehensive reform experiment in respect of IPR application and protection. It will help scientific and technological enterprises further explore effective path to intensify IPR application and broaden the financing channels for these enterprises with asset-light operation.
This year, the CPC Central Committee and the State Council successively formulated and circulated the Outline of Development Plan for the Guangdong-Hong Kong-Macao Greater Bay Area and the Opinions on Supporting the Building of Shenzhen into the Pilot Demonstration Area of Socialism with Chinese Characteristics, explicitly putting forward the idea of exploring and implementing IPR securitization. SZSE has paid high attention to the instruction and actively taken measures. It has given full play to its functional advantages in market, regulation, information, technology and services, etc. to support the efficient fusion of modern finance and technology and talents, and vigorously and steadily carry out related work of IPR securitization.
Securities issued under the “Guangzhou Patent License ABS” registered RMB301 million with an interest of 4% for the priority class. The underlying assets are the creditor’s rights of underlying sponsors under the patent licensing contracts of 11 technological SMEs in Guangzhou development zone. The underlying patents include patent for invention and patent for utility models. Specifically, the patentee has his/her exclusive patent licensed to the underlying sponsor who then re-license it to the patentee. In this way, the patentee obtains the patent licensing fee in one time, achieving the purpose of financing. Issuing IPR securitization products is conducive to meeting financing demands of scientific and technological enterprises with asset-light operation, accelerating the trading and application of corporate IPR and opening up the business chain of “financing, trading and operating” in creating IPR.
In recent years, SZSE has persisted on serving national innovation-driven development strategy and expanded fixed income product systems, continued to roll out innovative financing tools including innovation and entrepreneurship corporate bonds, private placement convertible bonds for non-listed companies and IPR securitization, promoted the connection of scientific and technological achievements with industrial capital and financial resources, and improved capabilities of the capital market serving the real economy. In the next step, SZSE will give full play to the market as a platform and the strength of forming innovative capital in accordance with the arrangement of the CSRC in regard to comprehensively deepening the reform of the capital market, focus on optimizing product supply, make up for market weaknesses, innovate SZSE-listed bonds and assets backed securities, support the development of technological enterprises, help cultivate new impetus of economic development and strive to improve the capital market ecosystem matched with the pilot demonstration area of socialism with Chinese characteristics.