Institutional Broker: Guide To Institutional Brokerages

Institutional broker
A broker specializing in security trades for institutions such as banks and pension
funds. Institutions usually trade in large blocks that require special handling.
A broker whose clients are predominantly or exclusively large, institutional

investors. Examples of an institutional broker's clients include hedge
funds and banks. Given the sheer size of the trades in which institutional investors
engage, an institutional broker may specialize in these types of investors because
the commissions, while small, add up to a significant amount and block trade
Guide to Institutional Brokerages

Advance company interests with institutional broker dealers
By Felicia R. Blue
You won’t have a problem finding institutional brokerages - many have sprung up in recent
years. Others, such as Instinet, have been in business for many years; they’ve just used the
web to expand their institutional clients.
Institutional brokerages work specifically with institutional clients. Institutional clients may be
corporations, pension funds or insurance companies. They have tremendous influences on the
financial markets because they can either buy or sell a large volume of shares. When looking to
do business with institutional brokerages, consider the following:
1. Make sure the institutional brokerage firm offers electronic trading.
2. Ensure your institutional broker dealer provides comprehensive investment research.
3. Consider whether the institutional brokerages provide research publications.
Action Steps
The best contacts and resources to help you get it done
Ensure your institutional brokerage firm offers electronic trading

Electronic trading is important when it comes to institutional agency trading. As previously
stated, institutional traders place large amount of orders. That's why it's important for
institutional brokers to have the latest and most advanced trading platform. Electronic trading
platforms should be able to work with various order types, have cutting edge routing capabilities,
and have access to Level I and Level II data.
I recommend: Capital Institutional Services is not only a top institutional brokerage firm, but it
provides sophisticated electronic trading. This institutional brokerage firm has been in business
for more than 30 years. Alaris Trading Partners, a registered fixed income institutional
brokerage firm, has strong relationships with Goldman Sachs Execution & Clearing LP and
Banc of America. Alaris offers direct electronic trading.
Make sure the institutional broker dealer provides you with

comprehensive investment research
You'll want to see how an institutional broker dealer gets information. Good institutional brokers
should have not only their own research analysts, but also have strong relationships with other
research firms. The institutional brokerage firms should also meet with representatives from the
company's investor relations department. This will enable institutional brokers to have firsthand
knowledge as to whether the company is a good investment.
I recommend: Instinet is one of the top institutional brokerage companies that many institutions
use. It provides high-quality investment research. FBR Capital Markets, another institutional
brokerage company, provides research tailored to various industries, such as energy and
natural resources, technology and telecom.
Ensure institutional brokerages keep you abreast of government

policies
Another tool institutional traders should use is research publications. For example, research
publications enable institutional brokers to keep abreast of tax or governmental policies.
Institutional brokers can determine whether a certain policy will have an effect on an industry.
Having this information will help institutional brokerages develop strong strategies for investing.
I recommend: Morgan Stanley produces several publications, such as Global Economic Forum
and Perspectives, that give good information. Institutional Investor has been in business for
more than 50 years. Its information is designed to empower corporate executives, government
officials, and financiers.
Tips & Tactics
Helpful advice for making the most of this Guide
 • Know and understand all of the risks, as well as the costs, involved when it comes to
investing in various securities. Your institutional broker should provide that info
Kotak Securities Limited, a subsidiary of Kotak Mahindra Bank, is the stock broking and
distribution arm of the Kotak Mahindra Group. The company was set up in 1994. Kotak
Securities is a corporate member of both The Bombay Stock Exchange and The National Stock
Exchange of India Limited. Its operations include stock broking and distribution of various
financial products - including private and secondary placement of debt and equity and mutual
funds. Currently, Kotak Securities is one of the largest broking houses in India with wide
geographical reach. The company has four main areas of business: (1) Institutional Equities, (2)
Retail (equities and other financial products), (3) Portfolio Management and (4) Depository
Services.
Institutional Business
This division primarily covers secondary market broking. It caters to the needs of foreign and
Indian institutional investors in Indian equities (both local shares and GDRs). The division also
incorporates a comprehensive research cell with sectoral analysts who cover all the major areas
of the Indian economy.
Client Money Management

This division provides professional portfolio management services to high net-worth individuals
and corporates. Its expertise in research and stock broking gives the company the right
perspective from which to provide its clients with investment advisory services.
Retail distribution of financial products

Kotak Securities has a comprehensive retail distribution network, comprising 870 offices (own
and franchisees) across 309 cities and towns, servicing 590,000 customers. This network is used
for the distribution and placement of a range of financial products that includes company fixed
deposits, mutual funds, Initial Public Offerings, secondary debt and equity and small savings
schemes.
Depository Services
Kotak Securities is a depository participant with the National Securities Depository Limited and
Central Depository Services (India) Limited for trading and settlement of dematerialised shares.
Since it is also in the broking business, investors who use its depository services get a dual
benefit. They are able to use its brokerage services to execute transactions and its depository
services to settle these.
Kotak Securities' width, volume and quality of offerings regularly earn it accolades from
industry monitors. In recent times, these have included:
Asiamoney Brokers Poll: Best Local Brokerage (2009, 2008, 2007 & 2006)
Asiamoney Brokers Poll: Best Analyst in India - Sanjeev Prasad (2009, 2008, 2007, 2006 &
2005)
FinanceAsia: Best Broker in India (2010 & 2009)
Kotak Institutional Equities
Kotak Institutional Equities, among the top institutional brokers in India. It mainly covers
secondary market broking and the marketing of equity offerings, including IPOs, to domestic and
foreign institutional investors. Its full-fledged research division comprises 28 analysts engaged in
macro-economic studies, industry-and company-specific equity research.
Kotak Institutional Equities has full financial service capability, which includes derivatives,
facilitating market access through affiliates and the distinctive offering of corporate access to
investors. The division services over 250 clients including FIIs, domestic institutions and mutual
funds. The division has sales desks in Mumbai, London and New York, with the India desk also
servicing clients in Hong Kong, Singapore, Japan and Australia
Anand Rathi is a leading full service investment bank founded in 1994 offering a wide range of
financial services and wealth management solutions to institutions, corporations, high–net worth
individuals and families. The firm has rapidly expanded its footprint to over 350 locations across
India with international presence in Hong Kong,Dubai & London. Founded by Mr. Anand Rathi
and Mr. Pradeep Gupta, the group today employs over 2,500 professionals through out India and
its international offices.
The firm’s philosophy is entirely client centric, with a clear focus on providing long term value
addition to clients, while maintaining the highest standards of excellence, ethics and
professionalism. The entire firm activities are divided across distinct client groups: Individuals,
Private Clients, Corporates and Institutions. AnandRathi has been named The Best Domestic
Private Bank in India by Asiamoney in their Fifth Annual Private Banking Poll 2009. The firm
has emerged a winner across all key segments in Asiamoney’s largest survey of high net worth
individuals in India.
In year 2007 Citigroup Venture Capital International joined the group as a financial partner.

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Institutional broker

A broker whose clients are predominantly or exclusively large, institutional

Guide to Institutional Brokerages

1. Make sure the institutional brokerage firm offers electronic trading.

2. Ensure your institutional broker dealer provides comprehensive investment research.

3. Consider whether the institutional brokerages provide research publications.

Ensure your institutional brokerage firm offers electronic trading

Make sure the institutional broker dealer provides you with

Ensure institutional brokerages keep you abreast of government

Tips & Tactics

Helpful advice for making the most of this Guide

Client Money Management

Retail distribution of financial products

FinanceAsia: Best Broker in India (2010 & 2009)

Kotak Institutional Equities

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