Pipeline

AAA

DEFINITION of 'Pipeline'

1) An investment company whose purpose is to collect investment funds from a pool of individual investors and invest them in financial securities.

2) The underwriting procedure which must be completed by the Securities & Exchange Commission (SEC) before a security can be offered for sale to the public.

3) A type of risk most often present in mortgage transactions. It expresses the potential for change in financial factors during the time lapse between the mortgage application and the purchase of the property.

INVESTOPEDIA EXPLAINS 'Pipeline'

1) Such firms are usually exempt from normal corporate taxes, since they simply serve as an investment conduit, or pipeline, rather than actually producing goods and services as a regular corporation does. A mutual fund structured as a trust would be exempt from corporate taxes and considered an investment pipeline.

2) A new security issue must go through the SEC's pipeline before it is legally cleared for sale to the public. This practice attempts to screen out fraudulent investments and ensures security offerings are presented to the public in an accurate fashion.

3) During the time it takes for a bank to review a mortgage application and for a borrower to actually purchase their desired property (the mortgage pipeline), financial conditions specific to the application can change, which would change the amount of risk the bank incurs by lending funds to the borrower.

RELATED TERMS
  1. Mortgage

    A debt instrument, secured by the collateral of specified real ...
  2. Securities And Exchange Commission ...

    A government commission created by Congress to regulate the securities ...
  3. Public Offering

    The sale of equity shares or other financial instruments by an ...
  4. Investment Income

    Income coming from interest payments, dividends, capital gains ...
  5. Investment Company

    A corporation or trust engaged in the business of investing the ...
  6. Pipeline Theory

    A notion that an investment firm that passes all capital gains, ...
Related Articles
  1. What Is Fiscal Policy?
    Economics

    What Is Fiscal Policy?

  2. Evaluating Pharmaceutical Companies
    Fundamental Analysis

    Evaluating Pharmaceutical Companies

  3. What is the double taxation of dividends? ...
    Taxes

    What is the double taxation of dividends? ...

  4. Will ETFs Eventually Replace Mutual ...
    Mutual Funds & ETFs

    Will ETFs Eventually Replace Mutual ...

comments powered by Disqus
Hot Definitions
  1. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  2. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  3. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  4. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  5. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  6. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
Trading Center