Lecture 1 - Investment Banking and Brokerage Lecture 1...

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Investment Banking and Brokerage Lecture 1
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Securities Broadly speaking, two types are issued Debt securities: fixed schedule of payments with no voting rights Equity securities: Whatever remains after debt obligations have been met with voting rights Hybrid: mix of features
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Models of finance Bank loan model Securities markets
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Models of finance
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Securities Markets Primary markets: newly issued securities Secondary markets (e.g. NYSE): securities trade after they are issued Ease with which security can trade is known as liquidity Liquidity varies across securities and market structures Investors have incentive to gather information
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Some Distinctions…
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Regulatory Matters
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Securities Act of 1933 First major federal legislation to regulate the sale of securities Only concerns new issue Securities being offered for public sale for the first time Not secondary trading Require that investors receive significant (or “material”) information Prohibit deceit, misrepresentations, and other fraud in the sale of securities. Disclosure of relevant information is accomplished through the registration of securities with the SEC
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Securities Exchange Act of 1934 Regulates the secondary markets and many market participants Creation of the SEC Continuous disclosure for publicly traded securities that are already issued and outstanding Regulatory responsibilities of Self-Regulatory Organizations Stock exchanges (NYSE and AMEX) National Association of Securities Dealers (NASD) for the over-the-counter (OTC) market In 2007, NASD and the NYSE’s regulation committee merged to form a new regulatory body, the Financial Industry Regulatory Authority (FINRA) Broker-Dealer Regulation Anti-fraud provisions
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Glass Steagall Repeal - Context During 80s, traditional bank loan business to big corporations was declining
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This note was uploaded on 04/05/2010 for the course FINANCE AN FRE6111 taught by Professor Chappe,raphaele during the Spring '10 term at NYU Poly.

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Lecture 1 - Investment Banking and Brokerage Lecture 1...

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