Over-the-counter fund-raising refers to the public lending of money to customers by stock fund-raising companies other than margin financing and securities lending. Generally speaking, the fund-raising company will charge certain interest and management fees to customers according to the net amount of funds and the fund-raising period. At the same time, customers will also give shares and deposits to the fund-raising company as a guarantee, and at the same time set up a liquidation line to protect the interests of the fund-raising company.

Basic business model of OTC financing

Off-exchange fund-raising is essentially a fund lending relationship. Fund-matching companies lend their own funds and funds raised from the market to investors through the platform to realize leveraged trading of investors. Fund-raising companies provide securities accounts and funds and charge interest. In order to ensure the safety of the lent funds, the fund-raising company monitors the funds in the customer's account and sets up a liquidation line and an early warning line. The fund-raising company will inform customers to lighten their positions or make up their own deposits. Once the client's funds touch the liquidation line, the fund-raising company has the right to liquidate immediately, and the leverage ratio of off-site fund-raising is extremely high, often reaching more than 10, which is much higher than the leverage ratio of on-site fund-raising 1 0. The annualized interest rate is generally between 20% and 33%, which is also much higher than the 6%-9% of on-site fund-raising.

Common methods for fund-raising companies to attract customers

Over-the-counter fund-raising companies introduce the fund-raising business to ordinary investors through various channels, such as telephone marketing, SMS, instant messaging software, mass e-mail, advertisements on financial websites and self-media. In order to attract people's attention and develop business rapidly, there are all kinds of publicity about off-site fund-raising, such as "low threshold, leverage 10 times, fund-raising funds arrive every second" and "recharging to send interest-free red envelopes", etc. Some fund-raising companies have violated regulations.

Illegal off-exchange fund-raising has revived. The so-called OTC fund-raising platform is not qualified to engage in securities business, some are suspected of engaging in illegal securities business activities, and some even engage in illegal and criminal activities such as fraud by means of "virtual disk".