Anti Non Publicity Month | Forms and Policy Boundaries of "Off site Funding"

Off exchange fund allocation "refers to the activity of lending funds to investors at a ratio several times higher than the margin they pay, organizing investors to use borrowed funds and margin on specific securities and futures accounts for stock and futures trading, and collecting interest, fees, or profit sharing. The behavioral patterns mainly include:

1. System warehousing mode. Mainly refers to the use of account sharding systems by investment intermediaries to split securities and futures accounts into several virtual trading sub accounts, and provide them to investors for stock and futures investment trading.

2. Lending account mode. Mainly refers to the provision of securities and futures accounts owned or controlled by investment intermediaries to investors for stock and futures investment trading.

3. Virtual disk allocation model. Mainly refers to the use of virtual stock and futures trading systems by investment intermediaries to organize investors for stock and futures investment trading, where investors' trading instructions and funds do not actually enter the securities and futures trading markets.

4. Click to purchase and allocate funds mode. The main guidance is for buyers (i.e. fund demanders) to provide stock and futures trading strategies, while investors (i.e. fund providers) provide matching funds and securities and futures accounts. After being matched by matching intermediaries, both parties engage in stock and futures matching transactions and share investment returns as agreed.

According to the relevant provisions of the Securities Law and the Regulations on the Administration of Futures Trading, engaging in "off exchange fund allocation" is suspected of illegal operation of securities and futures business (behavior patterns 1, 2, 4). Engaging in virtual asset allocation is suspected of illegal and criminal activities such as fraud (behavior pattern 3).

Investors should be wary of the behavior of "off exchange fund allocation", choose legitimate institutions in the investment process, adhere to rational investment, and enhance their risk prevention awareness and self-protection ability to guard against being deceived.