May 15 to June 15, 2024 is the fifth National Anti-Illegal Securities and Futures Fund Publicity Month. In order to fully implement the spirit of the Party's 20th National Congress and the Central Financial Work Conference, implement the requirements of The State Council on Strengthening Supervision and Prevention of Risks and Promoting High-quality Development of the Capital Market (Guofa (2024) No. 10), highlight the people-centered value orientation, and increase positive publicity efforts to prevent illegal securities and futures fund activities, More effectively protect the legitimate rights and interests of investors, especially small and medium-sized investors, the theme of this month is "Resist illegal securities and futures fund activities, protect the legitimate rights and interests of investors."

(1) Illegal issuance of shares

According to the provisions of the State, the public issuance of shares must be approved or registered by the China Securities Regulatory Commission. Without the approval or registration according to law, no unit or individual may publicly or in disguised form issue shares. The non-public offering of shares shall not be carried out by public means such as advertisement, announcement, broadcast, network, short message or in disguised form. The main forms of illegal stock issuance activities are: (1) fabricating false news that the company will be listed at home and abroad or get approval for securities issuance, inducing the public to buy the so-called "original shares", or signing transfer agreements or subscription agreements privately; (2) Illegal intermediaries, in the name of investment consulting institutions, foreign representative offices in China, etc., illegally buy and sell securities of unlisted companies to the public or buy and sell them on behalf of the public; (3) Illegal or disguised public issuance of securities through the purchase of equity shares or the signing of investment agreements or shareholding agreements; (4) Establish multiple companies across regions to sell shares in the name of different companies or sell shares through the media model, so as to circumvent the provisions of the Securities Law on public offering.

【 Preventive methods 】

Stock is a kind of high risk financial product. Companies that issue shares in accordance with the law do not guarantee high returns to investors. Buying and selling stocks should be carried out through securities companies approved by the China Securities Regulatory Commission to avoid being cheated.

(2) Illegal securities and futures investment consulting

According to relevant laws and regulations, securities and futures investment consulting refers to the activities in which institutions engaged in securities and futures investment consulting business and their investment consulting personnel provide securities and futures investors or customers with securities and futures investment analysis, prediction or advice, and other direct or indirect paid consulting services. To engage in securities and futures investment consulting business, they must obtain the business license of the China Securities Regulatory Commission. Without the permission of the China Securities Regulatory Commission, no institution or individual shall engage in securities and futures investment consulting business.

Criminals usually pose as formal investment consulting institutions, fabricate the identity of professional financial services agents, or use wechat groups, mobile phone messages, stock bars, stock software and other marketing platforms to attract members or customers, recommend stocks, online consultation or finance on behalf of customers through false information, exaggerated publicity, promising returns and other means, and make profits by collecting membership fees and sharing revenue. Illegal securities investment consulting activities under the guise of private funds and inside information.

【 Preventive methods 】

Investors see or receive institutional or individual stock recommendation information, should first go to the China Securities Regulatory Commission website or the Securities Association of China, China Futures Industry Association website to inquire whether the institution or personnel has the corresponding qualifications, or call the legitimate institutions that are counterfeit, verify the relevant information, so as to avoid being deceived and lose money.

(3) Off-site allocation of capital

Otc capital allocation is an illegal securities and futures activity, in which capital allocation companies lend their own funds and funds raised from the market to investors through the platform to realize investors' leveraged trading. Capital allocation companies provide securities accounts and funds and collect interest. In order to ensure the safety of lending funds, the allocation company monitors the funds of the customer account in real time, and sets the warehouse line and the early warning line. When the customer funds reach the early warning line, the allocation company will notify the customer to reduce the position or cover the margin. Once the customer funds touch the warehouse line, the allocation company has the right to close the position immediately.

Off-site capital allocation activities are highly leveraged, risky, and often have false publicity. Off-site capital allocation companies introduce capital allocation business to ordinary investors through various channels such as telemarketing, mobile phone SMS, instant messaging software, email group sending, advertising pages of financial websites, and we-media. In order to quickly attract attention and develop business, OTC capital allocation often adopts attractive publicity such as "low threshold, 10 times leverage, and second arrival of capital allocation funds".

【 Preventive methods 】

The so-called OTC capital allocation platform does not have the qualification to operate securities and futures business, and some are suspected of engaging in illegal securities and futures business activities, and some even use "virtual disk" and other ways to engage in fraud and other illegal and criminal activities. The majority of investors should improve their awareness of risk prevention and stay away from off-site capital allocation to avoid property losses. If you are defrauded due to participation in off-site allocation, please report to the local public security organ in time. If it is found that local securities and futures business institutions and their practitioners provide any convenience for OTC capital allocation activities, they can report to the China Securities Regulatory Commission or the local securities Regulatory Bureau.

(4) Illegal futures trading

According to state regulations, futures trading can only be conducted through a futures operating institution approved by the China Securities Regulatory Commission. When engaging in brokerage business, futures operating institutions shall, in accordance with regulations, take the initiative to remind investors of the risks of futures trading, and shall not guarantee profits to customers, and shall not agree with customers to share benefits or share risks.

【 Preventive methods 】

Futures trading is very risky, it is impossible to make a safe profit. In recent years, some criminals have released information through wechat, online forums, etc., saying that futures trading is "small investment and large income", and as long as you follow the "teacher", you can "double the income in a month", which is defrauding investors of money, please investors must be careful. Criminals often take advantage of investors' psychology of "getting rich at night" and attract investors to participate in illegal futures trading through exaggerated publicity. If investors want to participate in futures trading, they should first understand the basic knowledge and business rules related to futures trading, and then trade futures listed on legal futures exchanges through legitimate futures companies.

(5) Illegal outside futures

Some institutions promote the so-called "outer futures" agency business, claiming that it can provide channels for domestic investors to participate in overseas futures trading, acting in Hong Kong, New York, London and other markets for crude oil, gold, stock index, foreign exchange futures investment, what is available abroad, you can do what, and some also provide "expert" guidance, one-to-one teaching, futures allocation and other services. After providing an identity document, opening an account and paying the relevant fees, investors can trade "outside futures" through the specific trading software of these institutions.

【 Preventive methods 】

According to state regulations, no entity or individual may engage in futures business without approval, and domestic entities or individuals may not engage in overseas futures trading in violation of regulations. Domestic investors may participate in overseas futures trading through the trading software or mobile client of the above institutions, and their rights and interests will not be effectively protected in case of disputes. If someone promotes to investors that they can make a lot of money by doing "outer futures", it is a fraud and misleading, and investors should not participate in order to avoid being deceived and suffering losses.

(6) Unqualified OTC options

Some Internet platforms attract customers through websites, wechat public accounts, groups and other ways to provide investors with over-the-counter stock option trading services. Investors do not need to open an account, nor do they need to perform video authentication, only provide an ID number and bank account to complete the registration. After the investor determines the target of the operation, the bullish and bearish direction, the holding period, and the well accepts the option quotation (that is, the royalty), he can buy and become the right party of the option.

【 Preventive methods 】

These platforms do not have the corresponding financial business qualification, the internal control compliance mechanism is not perfect, the right fee requirements are too high, the lack of a third-party fund storage mechanism, there are obvious risks and hidden dangers. In addition, these platforms often use misleading propaganda terms such as "high leverage", "limited losses and unlimited profits", "no need to cover losses", unilaterally emphasizing or even exaggerating the income of individual stock options, weakening or even not suggesting the risk of individual stock options. Investors participate in OTC stock options trading through these platforms, there is a large risk, if the platform exists fraud or risk events such as "run away", their own rights and interests are difficult to protect. Investors should be highly vigilant, do not believe, do not participate, so as not to be deceived and suffer losses.