Securities underwriter

Securities underwriter article illustration

Description

Securities underwriters assist an institution in selling and buying debt securities. These securities may include corporate stocks, preferred stock, government bonds and other types of securities. Their primary responsibility is to assess which securities to buy and estimate when and how to resell them at a profit to the company.

Securities underwriters often work with initial public offerings (IPOs). They asses the investment’s risk to determine an appropriate price for an IPO. Typically, a securities underwriter is an employee of the investment bank or another specialist.

One of the biggest risks involved with securities underwriting is the sales period. For instance, if a security doesn’t sell for the suggested price, the investment bank is liable for the difference.

Other titles

The following job titles also refer to securities underwriter:

security underwriter
securities administrators
distribution administrators
securities administrator
security underwriters
distribution administrator

Minimum qualifications

A bachelor’s degree in finance, business, accounting, or a related field is generally the minimum required to work as a securities underwriter.

ISCO skill level

ISCO skill level is defined as a function of the complexity and range of tasks and duties to be performed in an occupation. It is measured on a scale from 1 to 4, with 1 the lowest level and 4 the highest, by considering:

  • the nature of the work performed in an occupation in relation to the characteristic tasks and duties
  • the level of formal education required for competent performance of the tasks and duties involved and
  • the amount of informal on-the-job training and/or previous experience in a related occupation required for competent performance of these tasks and duties.

Securities underwriter is a Skill level 3 occupation.

Securities underwriter career path

Similar occupations

These occupations, although different, require a lot of knowledge and skills similar to securities underwriter.

securities broker
foreign exchange trader
stock broker
foreign exchange broker
futures trader

Long term prospects

These occupations require some skills and knowledge of securities underwriter. They also require other skills and knowledge, but at a higher ISCO skill level, meaning these occupations are accessible from a position of securities underwriter with a significant experience and/or extensive training.

securities analyst
investment analyst
investment fund management assistant
dividend analyst
corporate banking manager

Essential knowledge and skills

Essential knowledge

This knowledge should be acquired through learning to fulfill the role of securities underwriter.

  • Financial products: The different types of instruments that apply to the management of cash flow that are available on the market, such as shares, bonds, options or funds.
  • Securities: The financial instruments traded in financial markets representing both the right of property over the owner and at the same time, the obligation of payment over the issuer. The aim of securities which is raising capital and hedging risk in financial markets.
  • Economics: Economic principles and practices, financial and commodity markets, banking and the analysis of financial data.
  • Financial markets: The financial infrastructure which permits trading securities offered by companies and individuals govern by regulatory financial frameworks.
  • Stock market: The market in which shares of publicly held companies are issued and traded.
  • Actuarial science: The rules of applying mathematical and statistical techniques to determine potential or existing risks in various industries, such as finance or insurance.
  • Commercial law: The legal regulations that govern a specific commercial activity.
  • Financial jurisdiction: Financial rules and procedures applicable to a certain location, whose regulatory bodies decide on its jurisdiction

Essential skills and competences

These skills are necessary for the role of securities underwriter.

  • Protect client interests: Protect the interests and needs of a client by taking necessary actions, and researching all possibilities, to ensure that the client obtains their favoured outcome.
  • Analyse market financial trends: Monitor and forecast the tendencies of a financial market to move in a particular direction over time.
  • Analyse economic trends: Analyse developments in national or international trade, business relations, banking, and developments in public finance and how these factors interact with one another in a given economic context.
  • Monitor stock market: Observe and analyse the stock market and its trends on a daily basis to gather up-to-date information in order to develop investment strategies.
  • Trade securities: Buy or sell tradable financial products such as equity and debt securities on your own account or on behalf of a private customer, corporate customer or credit institution.
  • Forecast economic trends: Gather and analyse economic data in order to predict economic trends and events.

Optional knowledge and skills

Optional knowledge

This knowledge is sometimes, but not always, required for the role of securities underwriter. However, mastering this knowledge allows you to have more opportunities for career development.

  • Banking activities: The broad and continuously growing banking activities and financial products managed by banks ranging from personal banking, corporate banking, investment banking, private banking, up to insurance, foreign exchange trading, commodity trading, trading in equities, futures and options trading.
  • Financial forecasting: The tool used in performing fiscal financial management to identify revenue trends and estimated financial conditions.
  • Statistics: The study of statistical theory, methods and practices such as collection, organisation, analysis, interpretation and presentation of data. It deals with all aspects of data including the planning of data collection in terms of the design of surveys and experiments in order to forecast and plan work-related activities.
  • Tax legislation: Tax legislation applicable to a specific area of specialisation, such as import tax, government tax, etc.

Optional skills and competences

These skills and competences are sometimes, but not always, required for the role of securities underwriter. However, mastering these skills and competences allows you to have more opportunities for career development.

  • Trace financial transactions: Observe, track and analyse financial transactions made in companies or in banks. Determine the validity of the transaction and check for suspicious or high-risk transactions in order to avoid mismanagement.
  • Manage securities: Administer the securities owned by the company or organisation, namely debt securities, equity securities and derivatives aiming to get the highest benefit from them.
  • Perform stock valuation: Analyse, calculate and appraise the value of the stock of a company. Use mathematic and logarithm in order to determine the value in consideration of different variables.
  • Assess risks of clients’ assets: Identify, evaluate and determine the actual and potential risks of your clients’ assets, considering confidentiality standards.
  • Create a financial plan: Develop a financial plan according to financial and client regulations, including an investor profile, financial advice, and negotiation and transaction plans.
  • Maintain records of financial transactions: Collate all the financial transactions done in the daily operations of a business and record them in their respective accounts.
  • Communicate with banking professionals: Communicate with professionals in the field of banking in order to obtain information on a specific financial case or project for personal or business purposes, or on behalf of a client.
  • Provide support in financial calculation: Provide colleagues, clients or other parties with financial support for complex files or calculations.
  • Advise on financial matters: Consult, advise, and propose solutions with regards to financial management such as acquiring new assets, incurring in investments, and tax efficiency methods.
  • Manage financial risk: Predict and manage financial risks, and identify procedures to avoid or minimise their impact.
  • Operate financial instruments: Work with financial instruments such as stocks, bonds, mutual funds and derivatives.
  • Apply technical communication skills: Explain technical details to non-technical customers, stakeholders, or any other interested parties in a clear and concise manner.
  • Build business relationships: Establish a positive, long-term relationship between organisations and interested third parties such as suppliers, distributors, shareholders and other stakeholders in order to inform them of the organisation and its objectives.
  • Analyse financial risk: Identify and analyse risks that could impact an organisation or individual financially, such as credit and market risks, and propose solutions to cover against those risks.
  • Handle financial transactions: Administer currencies, financial exchange activities, deposits as well as company and voucher payments. Prepare and manage guest accounts and take payments by cash, credit card and debit card.

ISCO group and title

3311 – Securities and finance dealers and brokers


References
  1. Securities underwriter – ESCO
  2. What is an Underwriter, and What Do They Do? – SmartAsset
  3. What Does an Underwriter Do? | Indeed.com Hong Kong
  4. Featured image: Photo by Nick Sarvari on Unsplash
Last updated on February 27, 2023

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