nondepository

Nondepository institutions are financial entities that do not accept public deposits. They fund their activities through capital markets, wholesale funding, securitization, or insurance premiums, rather than retail deposits. They are distinct from depository institutions such as banks, savings institutions, and credit unions, which rely on customer deposits and typically receive government-backed deposit insurance.

Common activities include lending or credit provision through secured or unsecured loans, investment management and advisory services, underwriting and asset management, insurance products and annuities, pension and retirement services, and various consumer or commercial finance activities funded via markets rather than deposits. These institutions often operate in wholesale markets and serve institutional clients, though some provide services to retail customers indirectly.

Regulation and oversight vary by activity and jurisdiction. Broker-dealers and investment advisers are typically regulated by the Securities and Exchange Commission andFINRA; insurers are regulated by state insurance departments; investment funds fall under securities regulators such as the SEC; futures and other derivatives fall under the Commodity Futures Trading Commission in the United States. In some systems, prudential or systemic-risk oversight may apply to large nondepository firms. In many countries, nondepository institutions do not have government deposit insurance for the funds they raise from the public.

Global context and role: Nondepository institutions can complement banks by providing credit and risk-management services, especially when bank funding is constrained or capital markets are active. The term is commonly used in contrast with depository financial institutions and is often linked to categories such as nonbank financial companies in regulatory vocabularies. In some jurisdictions, nondepository finance companies are referred to as NBFCs or similar terms.