Investment banks are such kind of banks that profit from companies and governments by raising money through issuing and selling securities in the capital markets (both equity and bond), as well as providing advice on transactions such as mergers and acquisitions.
In the U.S., an advisor must be a licensed broker dealer to perform these services, and is subject to the U.S. Securities and Exchange Commission (commonly known as the SEC) regulation. Until the late 1980s, the United States and Canada maintained a separation between investment banking and commercial banks.
A majority of investment banks offer strategic advisory services for mergers, acquisitions, divestiture or other financial services for clients, such as the trading of derivatives, fixed income, foreign exchange, commodity, and equity securities.
Trading securities for cash or securities (i.e., facilitating transactions, market-making), or the promotion of securities (i.e., underwriting, research, etc.) is referred to as the "sell side."
Dealing with the pension funds, mutual funds, hedge funds, and the investing public who consume the products and services of the sell-side in order to maximize their return on investment constitutes the "buy side." Many firms have buy and sell side components.
The last two major bulge bracket firms on Wall Street were Goldman Sachs and Morgan Stanley until both banks elected to convert to traditional banking institutions on Sept. 22, 2008, as part of a response to the U.S. financial crisis.
Citigroup, Deutsche Bank, HSBC, JP Morgan Chase, and UBS AG are "universal banks" rather than bulge-bracket investment banks, since they also accept deposits (not all of them have U.S. branches).