Investment Banks are Non-Banking Financial companies (NBFC) and are regulated by Securities & Exchange Commission of Pakistan (SECP).
An NBFC is a financial institution which does not have banking license, but do provides banking services. These institutions do not have sufficient right to take up deposits from public. However, all the operations of this body are still covered under banking regulations.
Investment Banking is a specialized sector of banking related to the production of capital for other businesses and corporations. Investment banking deals in providing assistance to issuers regarding placement of stocks. Apart from that an investment bank can undertake the following activities:
- Extend finance facilities
- Project Financing
- Eligible financier for capital markets
- Brokerage services without engaging in deposit raising activity
- Portfolio Management - Discretionary & Non-Discretionary basis
- Advisory Services including financial restructuring, mergers, professional analysis to investors for securities, assist in obtaining various types of finances including placement of debt and equity etc.
- Issuance of guarantees and counter-guarantees.
- Act as Underwriter
- Provide custodial/ trustee services subject to fulfillment of certain criteria.
Regulation 29 of the Non-Banking Finance Companies and Notified Entities Regulations 2008 details the activities performed by an investment bank.