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Finance Dictionary and Glossary of Investment Terms
Entity with large amounts to invest, such as investment companies, mutual funds, brokerages, insurance companies, pension funds, investment banks and endowment funds. Institutional investors are covered by fewer protective regulations because it is assumed that they are more knowledgeable and better able to protect themselves. They account for a majority of overall volume.
A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. Institutional investors face less protective regulations because it is assumed that they are more knowledgeable and better able to protect themselves.
An institutional investor manages large amounts of money for a big organization. Mutual fund, pension fund managers and insurance companies are institutional investors.
A bank, mutual fund, pension fund, or other corporate entity that trades securities in large volumes. (See also buy-side trader, fourth market, qualified institutional investor)