There are individual investors and institutional investors in the sec urities markets.From 1960's the sustained rise of institutional investors have b rought about a deep revolutions in the institutional securities markets.Recently there have been hot talks about the development of institutional investors in C hina's securities markets.The paper compares domestic institutional investors fu nction with that of overseas institutional investors in their own securities mar kets and looks for reasons why it is so.The paper also makes recommendation on i nstitutional innovation of institutional investors.