Preview

Fiis - Regulations and Impact on India

Powerful Essays
Open Document
Open Document
1543 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Fiis - Regulations and Impact on India
FIIs – Regulations and Impact on Indian Markets

Who is a Foreign Institutional Investor?

A foreign Institutional Investor (FII) is an institution established or incorporated outside India which proposes to make investment in securities of companies incorporated in India (“Indian Companies”) [1]. FIIs seeking to invest in Indian Companies are required to be registered with the Securities and Exchange Board of India (SEBI). They need to comply with the provisions of the Guidelines for Foreign Institutional Investors and the Securities and Exchange Board of India (Foreign Institutional Investors) Regulations, 1995 (the "SEBI Regulations").

The majority of the foreign investment into the securities market in India comes from Mauritius, a member of International Organisation of Securities Commissions (IOSCO), because of the existence of a favourable tax treaty between the two countries [2]. Nearly 30% of the FIIs trading on the Indian stock market operate from Mauritius. As on June 27, 2008 the number of FIIs registered with the SEBI was 1403.

Regulation of FIIs

There are two main bodies regulating portfolio investment in India- SEBI and RBI (Reserve Bank of India). Every FII is required to register with SEBI and shall comply with the Exchange Control Regulations of RBI. SEBI (FII) Regulations, 1995 and Regulation 5(2) of FEMA regulates the FIIs. Under the regulation of FEMA, RBI approval is also required in order to purchase or sell securities on stock exchanges, open foreign currency and Indian Rupee accounts with a designated bank branch. The permission from RBI is not required so long as the FIIs purchase and sell on

recognized stock exchange. All non-stock exchange sales/purchases require RBI permission.

Registration with the SEBI

a) Major Criterias

• FIIs seeking a license from the SEBI are required to be registered with a recognized foreign securities regulatory authority (recognized by the SEBI) or foreign tax authority.
• They



References: [1] Regulation 2(f) of the Securities and Exchange Board of India (Foreign Institutional Investors) Regulations, 1995. (http://www.sebi.gov.in/acts/act07a.html) [2] Mauritius: A Guide to Global Business, HSBC Bank publication, Sept 2007 [3] “Foreign Institutional Investment”, Rajesh Chakrabarti, ISB [4] Sunil Nayanar, Who’s driving this bull run? <http://inhome.rediff.com/money/2003/oct/06spec.htm>, October 06, 2003.

You May Also Find These Documents Helpful

  • Satisfactory Essays

    The Digital Imaging Technician is a new job that is becoming more popular by the year because of the digital filmmaking with RED & ARRI cameras. The DIT is part of the camera department and part of the post-production. They ingest the media, consults with the director of photography (DOP) and does onset color correction as the footage appears flat because it’s normally shot in Log.…

    • 433 Words
    • 2 Pages
    Satisfactory Essays
  • Best Essays

    Myer Swot Analysis

    • 1366 Words
    • 6 Pages

    FDI (Foreign Direct Investment) in India is governed by government. For most of FDIs there is an automatic approval route for investors, which do not need government approval for investment in India, unless any prohibited investment, such as real estate or agriculture.…

    • 1366 Words
    • 6 Pages
    Best Essays
  • Better Essays

    The Giver By Lois Lowry

    • 2813 Words
    • 12 Pages

    Jack Caroll once said “the greatest utopia would be if we could all realize that no utopia is possible; no place to run, no place to hide, just take care of business here and now” (Caroll). Is it possible for our world to become a complete utopian society with no problems and no worries? The chances of this happening are slim to none. There is no way for every person to agree on the same thing and be able to like the way it is. People have different views on the way anything should be done and not every time people agree.…

    • 2813 Words
    • 12 Pages
    Better Essays
  • Satisfactory Essays

    SEBI has clarified that there is no change in the rules relating to FIIs except for the strengthening of KYC Norms. They have also given a ruling which states that from Now on, The PNs can only be issued to Registered Entities. The actual investing parties must be registered with the regulator of their country of Incorporation. In addition, to facilitate the process of transition, derivative instruments already issued and outstanding against un-regulated entities will not be required to be terminated immediately. It has been decided that the said contracts will be permitted to expire or to be wound - down on maturity, or within a period of 5 years, whichever is…

    • 327 Words
    • 2 Pages
    Satisfactory Essays
  • Powerful Essays

    As the world's largest furniture retailer that designs and sells ready-to-assemble furniture, IKEA was founded in 1943 in Sweden by Ingvar Kamprad. The event that marked the onset of internationalization, however, came in 1963 when the first stores outside Sweden were opened in Norway driven from home by peer pressure which was aiming for raw materials with lower cost. In October 2011, IKEA has already had 332 stores in 38 countries. As for china, IKEA opened its first store in shanghai in 1998 (excluding Hong Kong in 1975). Currently, it only has 11 stores in China and the expansion speed is much slower when it is compared with other foreign furniture companies such as British B&Q which already had 38 stores in China (Li, 2010).…

    • 5728 Words
    • 23 Pages
    Powerful Essays
  • Powerful Essays

    A project ReportOnCASE STUDY OF FDI IN INDIA VS CHINASubmitted toMrs. Smita KashiramkaByRamya Singh2010B3A2613PIn Fulfilment ofStudy oriented ProjectBIRLA INSTITUTE OF TECHNOLOGY AND SCIENCE, PILANI30th November 2012…

    • 8109 Words
    • 33 Pages
    Powerful Essays
  • Powerful Essays

    India) and SEBI (Securities and Exchange Board of India ). SBI has to always adjust…

    • 1501 Words
    • 7 Pages
    Powerful Essays
  • Powerful Essays

    Irda vs Sebi

    • 5871 Words
    • 24 Pages

    * SEBI is the regulatory authority in India established under section 3 of SEBI act 1992. SEBI act 1992 provides for establishment of Securities & Exchange Board of India (SEBI) with statutory powers for…

    • 5871 Words
    • 24 Pages
    Powerful Essays
  • Powerful Essays

    Foreign Exchange Regulation Act (FERA) was promulgated in 1973 and it came into force on January 1974. Section 29 of this Act referred directly to the operations of MNC’s in India. According to the section, all non-banking foreign branches and subsidiaries with foreign equity exceeding 40 percent had to obtain permission to establish new undertakings, to purchase shares in existing companies, or to acquire wholly or partly any other company. Guidelines for administering this section of FERA were announced in 1973 and later amended in 1976.…

    • 2752 Words
    • 9 Pages
    Powerful Essays
  • Powerful Essays

    Impact of Fii's on Sensex

    • 1133 Words
    • 5 Pages

    Company Name: DESTIMONEYSIP Title: SELLING OF 10D-MAT ACCOUNTS WORTH RS. 888/- EACH IN 45 DAYS. Product/Function____________________________________________Target Achievement: 10 D-MAT ACCOUNTS…

    • 1133 Words
    • 5 Pages
    Powerful Essays
  • Good Essays

    Sebi Pdf

    • 1137 Words
    • 5 Pages

    Contained in Chapter XIV and Omitted. Chapter XI A. Permitted. Omitted. (a) For Indian and multilateral (a) Omitted. development financial institutions, Indian mutual funds, foreign institutional investors and scheduled banks. (b) For shareholders of the (b) For shareholders (other than…

    • 1137 Words
    • 5 Pages
    Good Essays
  • Powerful Essays

    A STUDY OF QUALIFIED FOREIGN INVESTMENTS: THE SYSTEM AND ITS BENEFITS TO FOREIGN NATIONALS By Saurav Mukhopadhyay, Indian Institute of Management, Ranchi A study of QFI: the system and its benefits to foreign Nationals Table of Contents 1. 2. 3. 4.…

    • 6390 Words
    • 26 Pages
    Powerful Essays
  • Powerful Essays

    (c) Security receipt as defined in clause (zg) of section 2 of the Securitization and…

    • 6975 Words
    • 28 Pages
    Powerful Essays
  • Good Essays

    Reforms of Capital Market

    • 765 Words
    • 4 Pages

    1) The Securities and Exchange Board of India was set up in early 1988 as a non-statutory body under an administrative arrangement. It was given statutory powers in January 1992 through the enactment of the SEBI Act, 1992 for regulating the securities market. The two objectives mandated in the SEBI Act are investor protection and orderly development of the capital market.…

    • 765 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Debentures

    • 3259 Words
    • 14 Pages

    Reserve Bank has exempted the transfer of shares, bonds or debentures of Indian companies made by NRIs through stock exchange in India in case where (a) such transfers are made in favour of an Indian citizen or person of Indian origin resident in India or in favour of a company or other body corporate incorporated in India and (b) sale proceeds of shares are credited to the NRO account of the transferor with no right of repatriation outside India. In such cases, authorised dealers may credit…

    • 3259 Words
    • 14 Pages
    Good Essays