PRESENTED BY: SAMAD BABJI

▪ Clients
▪ Investments banks
▪ Stock exchange & OTC
▪ Custodian bank
▪ Depository
▪ Regulations
▪ Data providers
Clients are classified into 2 categories:
Corporate clients: these are businesses that seek investment banking services for various purposes,
including mergers and acquisitions, initial public offerings (ipos), debt financing, and equity
financing. Examples of corporate clients include private equity firms and family-owned businesses.
Institutional clients: these are primarily large institutional investors such as pension funds, hedge
funds, asset management funds, and sovereign wealth funds. They rely on investment banks to
execute trades, manage their investment portfolios, and assist in raising capital. Investment banks
provide institutional clients with services such as market research, trading services, and
financial solutions.
Investment banks play significant roles at various stages of the trade life cycle,
especially in the context of institutional and corporate clients. Here are some
of the key roles that investment banks perform in the trade life cycle:
1. Advisory Services: Investment banks provide advisory services to clients,
offering expert guidance on the optimal strategies and structures for their
financial transactions.
2. Underwriting: For IPO’s and debt issuances, investment banks underwrite
the securities, helping the client raise capital by purchasing and reselling
them to investors.
3. Trading and Execution: Investment banks execute trades on behalf of their
institutional clients, which can include large investors like pension funds
and hedge funds.
4. Risk Management: Investment banks assist clients in managing financial
risks through various hedging strategies, especially in the derivatives
markets.
5. Custody and Clearing Services: Investment banks often provide custody
and clearing services, ensuring the safekeeping of clients' assets and
settling transactions efficiently.
Custodian banks play a crucial role in the financial industry by providing a range of services related
to the safekeeping, administration, and management of securities and other financial assets on
behalf of their clients.
The functions of custodian banks include:
▪ Safekeeping Of Assets
▪ Settlement Services
▪ Record Keeping
▪ Cash Management
▪ Risk Management
▪ Corporate Actions
Stock exchanges play a central role in the trade life cycle by
providing a marketplace where buyers and sellers can come
together to trade financial instruments such as stocks, bonds, and
derivatives.
Their functions within the trade life cycle include:
Price Discovery: Stock exchanges facilitate the price discovery
process by matching buy and sell orders.
Market Liquidity: Stock exchanges provide liquidity to the market by
ensuring that there is a continuous marketplace where investors can
buy or sell securities.
Transparency: Exchanges offer transparency by providing real-time
price and trade information to market participants.
Capital Formation: By providing a platform for companies to raise
capital through initial public offerings (IPOs) and secondary
offerings, stock exchanges play a vital role in capital formation and
economic growth.
Trading Infrastructure: Exchanges invest in trading infrastructure,
including electronic trading platforms and data Distribution systems,
to facilitate fast and efficient trading.
A clearinghouse, also known as a clearing house or clearing organization, plays a crucial role in
financial markets by acting as an intermediary between buyers and sellers of financial instruments.
The clearing house confirms and finalize the transaction, ensuring the both buyers and seller have
contractual obligations.
Its primary functions include:
o Trade Matching And Confirmation
o Guarantee Of Settlement
o Risk Management
o Novation
o Margining And Collateral Management
Depositories play critical roles in the financial markets, particularly in the context of securities
trading and settlement. Their roles are essential for ensuring the safe, efficient, and transparent
movement and custody of securities.
Here are the key roles of a depository:
I. Safekeeping Of Securities
II. Settlement Services
III. Corporate Actions Processing
IV. Pledge And Hypothecation
V. Promotion Of Market Efficiency
Regulators play essential roles in the financial markets and various industries to ensure fair and
efficient operations, protect investors and consumers, maintain market integrity, and uphold
regulatory compliance. Their roles can vary depending on the sector they oversee and the specific
regulations in place.
I. Market Oversight
II. Licensing And Registration
III. Market Forecasting
IV. Decision Making
Data providers play A crucial role in the trade life cycle by offering real-time and historical
market data, analytics, and information that are essential for making informed trading decisions,
risk management, and compliance. These data providers aggregate, process, and distribute data
from various financial markets and asset classes.
EXAMPLES: Morningstar, Nasdaq, Bloomberg, etc.