INVESTMENT HOUSES AND SECURITIES BROKER/DEALER
Investment Houses according to Presidential Decree No.129 also known as investment houses law, is
any enterprise, which engage underwriting securities of other corporations.
Underwriting- is the act or process of guaranteeing the distribution and sale of securities of any kind
issued by another corporation.
Securities- are written evidence of ownership, interest, or participation, in an enterprise, or written
evidences of indebtedness of a person or enterprise. It includes, but is not limited to the instruments
enumerated in Section 2 of the Securities Act (Commonwealth Act No.83, as amended)
Investment Houses they are individuals or organization that are engaged in investment banking and
financing activity.
There are different kinds of investment houses, depending upon the type of financial activities they
choose to involve.
Some of them serve the role of brokerages for shares and stocks, they act as middleman between
buyers and sellers and provide trading platform for everyone.
While others act as short term and long term investor in different business and asset classes such as real
estate.
Some investment houses act purely as financers, they finance or invest in business and do not involve n
the day to day running or decision making activities of the business.
Some of the examples of investment house here in the Philippines are: First Metro Investment
Corporation, RCBC Capital Corporation Abacus Capital and Investment Corporation Multinational
Investment Bancorporation, Philippine Commercial Capital, Inc. State Investment Trust, Inc. PBC Capital
Investment Corporation, and SMBC Metro Investment Corporation
Note: some of the given examples above are licensed and a member of IHAP
IHAP or INVESTMENT HOUSES ASSOCIATION OF THE PHILIPPINES they are association of investment
houses that promotes a better understanding of the role and function of investment houses and to
enhance their contribution to the growth of Philippines business and the economy particularly through
the development of the capital market.
WHAT IS THE DIFFERENCE OF THE INVESTMENT HOUSE AND INVESTMENT COMPANIES?
An investment house, work primarily for corporations and government to help raise money for their
clients through debt and stock offerings. One of the important functions perform by investment house is
issuing stocks for companies, namely a company’s initial public offer (IPO).They also advise companies
on mergers and acquisitions, and help bring prospective buyers together with sellers. The investment
house may provide consultation and advisory support to the business. The team of memebers at the
investment house is generally comprised of highly experienced and knowledgeable people with
expertise in different areas. They are able to provide useful advise to the business at crucial junctures.
An investment company is a corporation or trust engaged in the business of investing the pooled capital
of investors in financial securities. An investment company is also known “FUND COMPANY” or “FUND
SPONSOR”. They often partner with third-party distributors to sell mutual funds. Investment companies
can be privately or publicly owned, and they engaged in the management, sale, and marketing of
investment products to the public. Investment companies make profits by buying and selling shares,
property, bonds, cash, other funds and other assets.
SECURITIES BROKER AND DEALER
WHAT IS SECURITIES BROKER AND DEALER?
BROKER
A broker is an individual or firm that acts as an intermediary between an investor and a securities
exchange.
A broker can also refer to the role of a firm when it acts as an agent for a customer and charges the
customer a commission for its services.
DEALER
A dealer acts as a principal in trading for its own account, as opposed to a broker who acts as an agent
who executes orders on behalf of its clients.
Dealers are important figures in the market. They make markets in securities, underwrite securities, and
provide investment services to investors
A broker-dealer (B-D) is a combination of the two, a person or firm in the business of buying and selling
securities for its own account or on behalf of its customers. The term broker-dealer is used in U.S.
securities regulation parlance to describe stock brokerages because most of them act as both agents and
principals.
Advantages and Disadvantages of selling to a BROKER
The advantages include cost-effectiveness, expertise, and their ability to offer an extensive range of
policy options, thus saving consumers looking for coverage time and effort.
disadvantages include less professionalism and sometimes high broker fees.
PROS AND CONS OF SELLING TO A DEALER
It’s fast. Going through a dealer is the quickest route to selling your car, and dealers are putting an
emphasis on making this process as fast and easy as it can be. Selling a car yourself can take a few weeks
or even longer; if you need to offload the car in a hurry, selling to a dealer or trading it in is just plain
faster.
Money. You’re likely to get less money than if you were to sell to a private party. Dealers pay wholesale
prices when they buy used cars, and those prices are lower than private-party prices because dealers
need to keep the lights on, pay salespeople and more. Selling it yourself just takes your time and effort,
instead.
