According to different trading venues, funds can be divided into two types: on-site funds and over-the-counter funds.

Funds.

OTC funds refer to funds that are not listed and traded on stock exchanges, but are traded on banks, securities companies, third-party financial management platforms or direct sales platforms of fund companies. Currently, most funds are OTC funds.

On-exchange funds refer to securities investment funds that can be listed and traded on stock exchanges like stocks. Common exchange-traded funds include closed-end funds, listed open-end funds (LOF), exchange-traded open-end funds (ETF), and tiered funds. On-site funds have two investment methods: primary market subscription and redemption and secondary market transactions. The secondary market trading method of on-site funds is the same as that of stocks. 100 fund shares are considered as one lot, and bidding transactions are conducted based on market quotations.

The difference between on-exchange funds and over-the-counter funds is:

First, the trading venues of over-the-counter funds and on-exchange funds are different. The trading venues of OTC funds are outside the stock exchange. By opening an account with a bank, securities company, third-party financial management platform or fund company, you can conduct fund transactions such as subscription, subscription, redemption, fixed investment, and conversion. On-site fund trading requires opening an account at a stock exchange and conducting transactions through the securities company's trading software.

Second, transaction rates are different. The subscription (subscription) fee rate for OTC funds is generally between 0-1.5% depending on the investment objects. However, currently each platform fund subscription fee rate generally has varying degrees of discounts, which depends on the specific conditions of each platform. Also depending on the investment objects, different types of funds have different redemption rates. Generally, the redemption rate is around 0.5% of the redemption amount. In order to encourage investors to hold the fund for a long time, the redemption fee usually decreases as the holding time increases. Generally, the redemption fee is waived if the holding time is more than 2 years. It is worth noting that starting from March 31, 2018, new rules on short-term fund redemption fees were officially implemented: Except for currency funds and ETFs, investors who hold open-end funds for less than 7 days will be charged a non-stop fee. Less than 1.5% redemption fee. The buying and selling of on-site funds is similar to stock transactions, and the transaction fees incurred are executed based on the commission rate signed between the customer and the securities company, and there are different standards for different customers.

Third, the transaction objects are different. Funds traded on the exchange are generally exchange-traded open-end funds (ETF), listed open-end funds (LOF), closed-end funds, etc.; funds traded over-the-counter include most open-end funds (including LOF and ETF corresponding of open-end fund shares).

Fourth, the transaction prices are different. On-site fund secondary market transactions are similar to stock transactions. Transactions are matched at real-time prices based on supply and demand. The prices are different at different trading times on the trading day. The price of OTC funds is fixed, and subscriptions and redemptions are made based on the net value of the fund on that day.

Fifth, the arrival time is different. Generally speaking, funds on the exchange can be sold T+1 working days after they are purchased. The funds are available on the same day and can be withdrawn the next day (working day). OTC funds can usually be redeemed on the second working day after subscription, and the fund arrival time is generally T+1 to T+7 working days (including QDII funds).

Sixth, the methods of dividend distribution are different. OTC fund dividends can be distributed in two ways: cash dividends and dividend reinvestment. The only way to distribute dividends from on-market funds is in cash, and the dividends cannot be reinvested.