9.1 Balance Access

9.1 Balance Sweep

9.1A Question: What rules trigger automatic redemptions for Balance Sweep? Can it be used to offset subscriptions to other funds or IPO applications?

Answer: 1. Funds generate subscription and redemption channel orders on each trading day; however, settlement (reconciliation) depends on the fund company’s actual return of subscription confirmation units and the timing of redemption confirmation amounts. The T+ designation set by the fund is for display purposes only. When a client purchases stocks, a T+2 settlement is required; after the purchase, the available cash for withdrawal may become negative, which will immediately trigger an automatic redemption through Balance Sweep. The fund company will remit funds to the account on T+1, and manual clearing and settlement must be completed in WBO on the same day so that the client’s account has funds available for the T+2 stock settlement.

1. In principle, funds cannot be purchased using Balance Sweep, because purchasing a fund requires debiting the client and remitting the money to the fund company on the same day, leaving no time for the Balance Sweep redemption to occur. Use of Balance Sweep for IPO subscriptions is subject to time restrictions: if the user’s IPO subscription is later than 9:00 AM on the trading day before the subscription deadline, the Balance Sweep redemption amount will arrive after the deadline, and Balance Sweep cannot be used to place the IPO subscription directly. Using Balance Sweep to offset U.S. and Hong Kong securities subscriptions is acceptable.

9.1B Question: If the minimum redemption share is set as an integer, why can fractional shares be redeemed?

Answer: For Balance Sweep holdings, redemptions only assess the holding share quantity and do not consider minimum sell share or minimum sell amount restrictions. Automatic redemptions are intended to repay debts or provide funds for settlement; if automatic redemption cannot occur, the client may incur a debt. Therefore, Balance Sweep redemptions are not subject to minimum sell share or minimum sell amount restrictions.