Business Overview
Business Introduction
Overview
In the securities market, publicly offered funds and private funds are the two primary investment instruments widely used by investors.
Publicly offered funds are issued by fund management companies and are open to the public for purchase and redemption. These funds generally have relatively low investment thresholds, and investors can purchase them through securities exchanges or fund distributors. Publicly offered funds are managed by professional fund management teams; by purchasing fund shares, investors can indirectly invest in assets such as stocks and bonds, achieving asset diversification and professional management. In contrast, private funds are issued to specific investors, have higher investment thresholds, and involve relatively more complex purchase procedures. The operation of private funds is more flexible, typically encompassing a wider range of investment strategies and market approaches, and is suitable for institutional investors or high‑net‑worth individuals.
There are multiple reasons why investors participate in fund investments. First, investing in funds helps investors diversify risk. By allocating capital across different asset classes and industries, investors can reduce the risk associated with any single investment and achieve a more resilient portfolio. Second, funds are managed by professional fund management teams who allocate assets and execute trades based on market conditions and the fund’s investment objectives to pursue optimal returns for investors. Such professional management can reduce the investor’s management burden and improve investment efficiency and returns. In addition, purchasing funds is relatively simple and convenient, requiring no direct purchase or management of individual stocks or bonds; the fund company administers these tasks on behalf of the investor, providing convenience and flexibility.
In summary, fund investing offers investors a diversified and professional set of investment options, enabling them to participate in the market with ease and obtain corresponding investment returns. Whether choosing publicly offered funds or private funds, investors can select products that align with their needs and risk preferences and participate in the market through straightforward purchase and redemption procedures to pursue long‑term wealth growth.
Fund Transaction Steps
During the fund transaction process, brokers primarily perform the following key steps:
Receive investors’ purchase and redemption instructions: Clients submit purchase and redemption applications via their terminals. The broker must receive client instructions and freeze the corresponding funds; in accordance with business rules, the broker aggregates clients’ purchase and redemption orders and generates the fund files.
- Order placement for funds can be executed not only through the investor’s terminal but also via the fund back‑office system.
Submit fund files to the upstream party and await confirmation from the fund company: Operators verify the generated fund orders in the fund management backend, send the purchase and redemption data to the upstream party, and wait for the fund company to return information on shares and amounts.
Populate order data: Upon receiving files from the fund company, populate information such as fund net asset value, subscription shares, and redemption amounts, and perform reconciliation and confirmation.
Subscription and redemption settlement: Settlement may be conducted manually or automatically, including subscription settlement, delivery of redeemed securities, and payment of redemption proceeds. The system debits client funds according to subscription orders and increases the client’s fund share holdings; according to redemption orders, it deducts the client’s fund shares and returns funds to the client.
Complete settlement and notify the client: Back‑office personnel settle funds with the fund custodian through the bank, generate the fund transaction statement, and send it to the client.