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underwriting
underwritingisisassisting
assistingin
inthe
theissue
issueof
ofnew
newsecurities
securities
IBs
IBsalso
alsoadvise
adviseon
onmergers
mergersand
andacquisitions
acquisitions(M&As)
(M&As)
and
andcorporate
corporaterestructuring
restructuring
Securities
Securities firms
firms assist
assist in
in the
the trading
trading of
of securities
securities
in
in secondary
secondarymarkets
markets
broker-dealers
broker-dealersassist
assistin
inthe
thetrading
tradingof
ofexisting
existing
securities
securities
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the
thelargest
largestfirm
firminin1987
1987had
had$3.2
$3.2billion
billioninintotal
totalcapital
capital
the
thelargest
largestfirm
firminin2007
2007had
had$114.2
$114.2billion
billioninintotal
totalcapital
capital
5,248
5,248firms
firmsinin1980
1980
9,515
9,515firms
firmsinin1987
1987
5,808
5,808firms
firmsinin2007
2007
The
Thenumber
numberof
offirms
firmsin
inthe
theindustry
industryusually
usuallyfollows
followsthe
the
overall
overallcondition
conditionof
ofthe
theeconomy
economy
As
Aswith
withcommercial
commercialbanks,
banks,consolidation
consolidationhas
hasoccurred
occurred
through
throughmergers
mergersand
andacquisitions
acquisitions
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The
The second
second largest
largest group
group of
offirms
firms are
are full-service
full-service
firms
firms that
that specialize
specialize in
in corporate
corporate finance
finance or
or
primary
primary market
market activity
activity (i.e.,
(i.e., focus
focus less
less on
on
secondary
secondary market
market activities)
activities)
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first
firsttime
timedebt
debtand
andequity
equityissues
issuesoccur
occurthrough
throughinitial
initial
public
publicofferings
offerings(IPOs)
(IPOs)
new
newissues
issuesfrom
fromaafirm
firmwhose
whosedebt
debtor
orequity
equityisisalready
already
traded
tradedare
arecalled
calledseasoned
seasonedequity
equityofferings
offerings(SEOs)
(SEOs)
aaprivate
privateplacement
placementisisaasecurities
securitiesissue
issuethat
thatisisplaced
placed
with
withone
oneor
oraafew
fewlarge
largeinstitutional
institutionalinvestors
investors
public
publicofferings
offeringsare
areoffered
offeredto
tothe
thepublic
publicatatlarge
large
IBs
IBsact
actonly
onlyas
asan
anagent
agentin
inbest
bestefforts
effortsunderwriting
underwriting
IBs
IBsact
actas
asprincipals
principalsin
infirm
firmcommitments
commitments
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agency
agencytransactions
transactionsare
aretwo-way
two-waytransactions
transactionson
on
behalf
behalfof
ofcustomers
customers
with
withprincipal
principaltransactions
transactionsmarket
marketmakers
makersseek
seekto
to
profit
profitfor
fortheir
theirown
ownaccounts
accounts
Trading
Trading involves
involves taking
taking an
an active
active net
net position
position in
in
an
an asset
asset
position
positiontrading
tradinginvolves
involvesrelatively
relativelylong-term
long-term
positions
positionsin
inassets
assets
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Cash
Cash management
management involves
involves deposit-like
deposit-like
accounts
accounts such
such as
as money
money market
market mutual
mutual funds
funds
(MMMFs)
(MMMFs) that
that offer
offer check
check writing
writing privileges
privileges
Merger
Mergerand
and acquisition
acquisition (M&A)
(M&A) assistance
assistance
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The
The U.S.A.
U.S.A. Patriot
PatriotAct
Act became
became effective
effective in
in 2003
2003
firms
firmsmust
mustverify
verifyidentities
identitiesof
ofcustomers
customers
firms
firmsmust
mustmaintain
maintainrecords
recordsof
ofidentities
identitiesof
ofcustomers
customers
firms
firmsmust
mustverify
verifycustomers
customersare
arenot
noton
onsuspected
suspected
terrorist
terroristlists
lists
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Global Issues
Securities
Securities firms
firms and
and investment
investment banks
banks are
are
by
by far
far the
the most
most global
global of
of any
any group
group of
of
financial
financial institutions
institutions
U.S.
U.S. firms
firms are
are increasingly
increasingly looking
looking to
to
expand
expand their
their business
business abroadparticularly
abroadparticularly
into
into China
China an
an India
India
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