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A Brief Overview Of Foreign Institutional Investors (FII)

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What Is A Foreign Institutional Investor (FII)?

Foreign Institutional Investor (FII), refers to the non local investors when invest in the financial market of a country. In other words, the term is most commonly used in India when a foreign entity i.e. an entity which is established or registered outside India proposes to make investment in the financial market of India.

Who Can Get Registered As Foreign Institutional Investors (FII) in India?

Foreign Institutional investors also known as International institutional investors need to register themselves with the Security and Exchange Board of India (SEBI) in order to participate in the Indian market.

Foreign corporates and individuals and belong to any of the under given categories can be registered for FII :-

  • Pension Funds
  • Mutual Funds
  • Insurance Companies
  • Investment Trusts
  • Banks
  • University Funds
  • Endowments
  • Foundations
  • Charitable Trusts / Charitable Societies

Following entities proposing to invest on behalf of broad based funds, are also eligible to be registered as FIIs:

  • Asset Management Companies
  • Institutional Portfolio Managers
  • Trustees
  • Power of Attorney Holders

How Much Is The Registration Fee For FII Applicants?

5000 USD

What Is The Validity Period Of FII Registration?

The FII registration is valid for 5 years. After expiry of 5 years, the registration needs to be renewed.

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What All Agencies Regulate Foreign Institutional Investors (FII) In India?

  • RBI : The apex bank
  • FIPB : Review all foreign investment proposals
  • SEBI : Regulates India‚Äôs capital market

What Are The Advantages Of Foreign Institutional Investment (FII) In India?

  • Increases Forex reserves
  • Increases domestic savings
  • Increases domestic investments
  • Availability of capital reserve

Is There Any Disadvantages Of Foreign Institutional Investment (FII) In India?

  • Problem of inflation
  • False representation of economy
  • Problem for small investors
  • Hot Money

FII investment is frequently referred to as hot money for the reason that it can leave the country at the same speed at which it comes in. You can visit the link below to see the Foreign Institutional Investors List.

Visit : http://www.rbi.org.in/scripts/BS_FiiUSer.aspx

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