1. The Financial Services Industry Flashcards
Definition of financial markets?
Moving capital from those that have it to those that need it
Who needs capital?
Borrowers:
1. Retail
2. HNW/Private client
3. Companies
Professional sector or wholesale? (6 broad pts)
Markets (equity, bond, forex)
Derivatives
Insurance
Fund mgmt
Investment banks (trading as a principal or agent, banking, market making, research)
Custodian banks
Retail sector? (6 pts)
Retail banking
Insurance
Pensions
Investment svcs
Custodians
Financial planning and wealth mgmt
Financial advice
What is dual capacity?
Ability to act as both agent and principal
What are referred to as liquidity providers and what do they do?
Market makers
They quote bid/offer and guarantee a willing buyer/seller.
How is insurance different when in the retail sector or professional sector?
Insurance in professional sector is either general or life insurance.
Personal level rather than corporate level in retail sector.
What is a custodian bank?
Safekeeping and administration of assets
What do retail banks offer?
Savings, deposits (ISAs)
Also loans, mortgages
Also building socs included here
Building societies - how do they differ from retail banks?
Don’t issue shares and owned by people who use their svcs
If you borrow money from building socs you become partial owner
They are known as mutuals or mutual socs.
They offer same thing as retail banks usually.
Custodians in retail business - what does this mean?
Looking after assets of a retail client.
Examples of industry trade bodies and what do they do?
Professional bodies that represent the interests of their members.
ICMA
ISDA
IMA
BBA
APCIMS
What do 3rd party administrators do?
Offer administration services to other participants.
