The Functions of the Securities Firms and Investment Banks in Saudi Arabia and the United States

1536 Words7 Pages
Introduction:

In line with the globalisation of the financial market worldwide, in this project paper the issue of the functions of the securities firms and investment banks in Saudi Arabia and the functions of the securities firms and investment banks in United States of America will be discussed in detail.

Definition of investment bank:

Investment bank can be referred to as an organization or institution founded and united for the purposes that specifically involves fiscal matters. They also act as an assistant in a subordinate or supportive function for large company or group of businesses, recognized in law and acting as single entity, and the organization that is the governing authority of a political unit in increasing in quantity or value of their assets through the guarantee of financial support and serving as brokers in the issuing of bonds. In line with this an investment bank can be categorized as financial institutions which carry out the role of the investment banking, thus having or performing the activities of other finance related operation, as well as asset management, equity research and many others. Additionally, the set of financial institution may be just one of the portions of a more extensive financial institution like a commercial bank.

Consequently, an investment bank does not undertake the normal banking operations of depositing money in contrast to their counterpart banks in the category of the retail banks and commercial banks. However, they help in the amalgamation, contracting, assuming or acquiring possession of companies. Furthermore, the investment banks offer supportive services in the likes of market order, and the trading of a financial instrument whose value is based on another security,...

... middle of paper ...

...n Stanley, Salomon Brothers and Goldman Sachs.

In conclusion to this, one will find out that the role or functions of the financial institution of the Kingdom of Saudi Arabia is almost dissimilar to that of the United states of America in that the functions are being carried out or performed by different financial institutions, unlike the KSA where SAMA which is the central bank of Saudi Arabia performs the function of overseeing the performance or operation of the commercial banks and all other banking operations in the country, in the U.S.A the financial institutions are a division of the extended commercial bank and performs the counselling of companies on mergers and acquisitions, initial public offerings (IPOs), provision of debt and leveraged buyouts (LBOs), hence, the assumption of the institution as a “corporate finance" or "advisory services" institution.

More about The Functions of the Securities Firms and Investment Banks in Saudi Arabia and the United States

Open Document