Image: businesstoday.intoday.in
Meaning of FII :
FII
stands for Foreign Institutional investor. It refers to a company or an
institution established outside India who makes an investment in the financial
markets of India in the form of securities.
Birth of FII in India:
The
Indian stock market was open to the foreign investors on September 1992.
Indian Market is growing very rapidly which makes India as one of the most
important destination for the foreign investors. In general, the
investors prefers to invest in sectors like the banking, construction and IT
companies. One attractive point of this investment is that the sum
deposited by these foreign investors can be withdrawn from the market at any
time by the investor.
Active FII’s In India:
Some of
the most active foreign investors in India are CLSA, HSBC, Citigroup and
Merrill Lynch. The other prominent foreign institutional investors are
Morgan Stanley, Goldman Sachs, Aberdeen, Copthall etc.
Eligibility for applying for FII:
An applicant belonging to any of the below mentioned category
are eligible to apply for FFI.
1.Pension Funds.
2.Mutual Funds.
3.Investment Trust
4.Insurance companies
5.Endowment Funds.
6.University Funds.
7.Foundations or Charitable Trusts or
Charitable Societies who propose to invest on their own behalf,
and Asset Management Companies.
8.Nominee Companies.
9.Institutional Portfolio Managers.
10.Trustees.
11.Power of Attorney Holders.
12.Bank.
2.Mutual Funds.
3.Investment Trust
4.Insurance companies
5.Endowment Funds.
6.University Funds.
7.Foundations or Charitable Trusts or
Charitable Societies who propose to invest on their own behalf,
and Asset Management Companies.
8.Nominee Companies.
9.Institutional Portfolio Managers.
10.Trustees.
11.Power of Attorney Holders.
12.Bank.
How to Apply ?
An
application for registration has to be made in Form A, the format of which is
provided in the SEBI(FII) Regulations, 1995 and submitted with under mentioned
documents in duplicate addressed to SEBI as well as to Reserve Bank of India
(RBI) and sent to the following address within 10 to 12 days of receipt of
application.
Who are eligible to become FII ?
As per Regulation 6 of SEBI (FII)
Regulations, 1995, Foreign Institutional Investors are required to fulfill the
following conditions to qualify for grant of registration:
The applicant must have a record of financial soundness, experience,
professional competence.
The applicant should be regulated by an appropriate foreign regulatory authority in the same category where registration is sought from SEBI. Registration with authorities, which are responsible for incorporation, is not adequate to qualify as Foreign Institutional Investor.
The applicant is required to have the permission under the provisions of the Foreign Exchange Management Act, 1999 from the Reserve Bank of India.
Applicant must be legally permitted to invest in securities outside the country or its in-corporation / establishment.
The applicant has to appoint a local custodian and enter into an agreement with the custodian. Besides it also has to appoint a designated bank to route its transactions.
The applicant should be “proper and fit” person.
Payment of registration fee of US $ 5,000.00.
After submitting the application for FII, it generally takes about 10-12 days to obtain the registration from SEBI.
The applicant should be regulated by an appropriate foreign regulatory authority in the same category where registration is sought from SEBI. Registration with authorities, which are responsible for incorporation, is not adequate to qualify as Foreign Institutional Investor.
The applicant is required to have the permission under the provisions of the Foreign Exchange Management Act, 1999 from the Reserve Bank of India.
Applicant must be legally permitted to invest in securities outside the country or its in-corporation / establishment.
The applicant has to appoint a local custodian and enter into an agreement with the custodian. Besides it also has to appoint a designated bank to route its transactions.
The applicant should be “proper and fit” person.
Payment of registration fee of US $ 5,000.00.
After submitting the application for FII, it generally takes about 10-12 days to obtain the registration from SEBI.
Source: keralabanking.com
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