L-1.IBFS.Introdn - CA(IBFS-1 L-1 Introduction to Investment...

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CA(IBFS-1) L-1: Introduction to Investment Banking & Financial Services (IBFS) It deals with: 1. Introduction to IBFS 2. Investment Banking 3. Financial Services 1. Introduction to IBFS : Investment Banking (IB) is in the field of banking and finance. It deals elaborately with a wide range of instruments for financing, investing and controlling cost and risk. This is done through understanding capital market operations, raising money there-from and attributes of various financial instruments. The IB includes the activities viz. Advising, Administration, Underwriting and Distribution. It typically means the activity of raising funds, managing them, advising about investments and marketing of financial products. While in US and Europe separate Investment Banks exist (Lehman Brothers, Merryl Lynch, Goldman Sachs, J.P. Morgan, Chase Manhattan, Morgan Stanley, Charles Schwab, and so on, some of them are active on retail side and the others are active in trading securities or stock broking), in India, mostly commercial banks undertake investment banking in toto or a part of it (i.e. Merchant Banking). The term Financial Services encompasses all those services that have money as the raw material. The Financial Services Sector has a complex structure. It comprises of leasing, hire purchase, factoring, housing finance, besides a wide range of services. 1
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2. Investment Banking : The main activities/Functions of IB include: - Advising the clients on investments i.e. funds requirements (Assessing fund requirements of an individual or corporate, relating to amount, time and purpose; costs, benefits of various sources of finance, advising client of best source and the institution (s) or bank(s) which can assemble the package and fulfill the funding needs). Administration of Funds (Preparation of legal documentation of the proposed issue and taking care of regulatory requirements). Underwriting of Issues, handling Bought-out Deals and Private Placements; and Distribution of newly issued securities i.e. capital or financial products to the investors involving, security printing, allotment, registration, etc. Other related activities (like devising strategies for Mergers & Acquisitions including raising of funds for the same; Investment or Money Management including pooling of funds for joint investment, index fund investments and consultancy services; Securities Sales and Securities Trading; Insurance Product Designing; Pension Plans Designing; Risk Management including Hedging Foreign Currency Positions; Real Estate Dealing; and other Asset Management Services). The main topics of the Investment Banking includes the (i)
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L-1.IBFS.Introdn - CA(IBFS-1 L-1 Introduction to Investment...

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