An investment bank is a brokerage firm providing financial-related services to governments, corporations, and individuals. An investment bank acts as an agent in the placement and issuance of securities. Furthermore, they assist investors in raising capital by underwriting. Besides, an investment bank may also offer guidance to companies involved in acquisitions and mergers.
Unlike retail banks, investment banks disregard cash deposits. Upon the endorsement of Glass-Steagall Act in 1993, the United States maintains separation between retail and investment banking sectors. Nonetheless, some industrial countries such as G7 have not supported such a separation. As part of Dodd-Frank Act of 2010, the United States maintains institutional separation between commercial and investment banking sectors.
Divisions of Investment Banking
Investment banking may be split into the buy-side and the sell-side. The buy-side involves the provision of investment advice to investors. Examples of buy-side entities are mutual funds, unit trust, life insurance, and hedge funds. Conversely, the sell-side involves securities trade and promotion.
Furthermore, investment banking may be split into the public and private sections. The public sector deals with publicly disclosed information while the private segment deals with insider information. For anyone to qualify as an investment advisor in the United States, they must subject to the U.S. Securities and Exchange Commission and be licensed as broker-dealer.
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As an ideal role model for investors, Martin commits to finding the best investment strategies for his clients. With intelligence in observing market trends, Martin works incredibly smart to find the best investment opportunities in the future. Therefore, Americans wishing to expand their businesses should keep track to Martin Lustgarten’s investment tips. His moves inform the best investment opportunities in the future.