Foreign Institutional Investors (FIIs)

8/8/2019 Foreign Institutional Investors (FIIs)

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FOREIGN INSTITUTIONAL

INVESTORS

One who proposes to invest their proprietary funds oron behalf of "broad based" funds or of foreign

corporates and individuals and belong to any of the

under given categories can be registered for FII:

Pension Funds

Mutual Funds

Investment Trust

Insurance or reinsurance companies

Endowment Funds

University Funds


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Foundations or Charitable Trusts or Charitable

Societies who propose

to invest on their own behalf, and

Asset Management Companies

Nominee Companies

Institutional Portfolio Managers

Trustees

Power of Attorney Holders

Bank


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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 withunder 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.

Address for application:

The Division Chief

FII DivisionSecurities and Exchange Board of India,

224, Mittal Court, 'B' Wing, 1st Floor,

Nariman Point, Mumbai - 400 021.

INDIA.


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SUPPORTING DOCUMENTSREQUIRED

ARE:

Application in Form A duly signed by the authorised

signatory of the applicant.

Certified copy of the relevant clauses or articles of

the Memorandum and Articles of Association or the

agreement authorizing the applicant to invest on

behalf of its clients

Audited financial statements and annual reports forthe last one year, provided that the period covered

shall not be less than twelve months.


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A declaration by the applicant with registration

number and other particulars in support of its

registration or regulation by a Securities Commissionor Self Regulatory Organisation or any other

appropriate regulatory authority with whom the

applicant is registered in its home country.

A declaration by the applicant that it has entered into

a custodian agreement with a domestic custodian

together with particulars of the domestic custodian.

A signed declaration statement that appears at theend of the Form.

Declaration regarding fit & proper entity.


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THEELIGIBILITYCRITERIAFORAPPLICANT

SEEKINGFIIREGISTRATION

As per Regulation 6 ofSEBI (FII) Regulations, 1995,

Foreign Institutional Investors are required to fulfill thefollowing conditions to qualify for grant of registration:

Applicant should have track record, professional

competence, financial soundness, experience, generalreputation of fairness and integrity;

The applicant should be regulated by an appropriateforeign regulatory authority in the same

capacity/category where registration is sought fromSEBI. Registration with authorities, which areresponsible for incorporation, is not adequate to qualifyas Foreign Institutional Investor.


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The applicant is required to have the permission

under the provisions of the FEMA 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 must be a "fit and proper" person.

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.

Payment of registration fee of US $ 5,000.00


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INVESTMENTRESTRICTIONS:

A Foreign Institutional Investor may invest only in thefollowing:-

(a) Securities in the primary and secondary marketsincluding shares, debentures and warrants of companies,listed or to be listed on a recognised stock exchange

in India; and(b) units of schemes floated by domestic mutual funds

including Unit Trust of India, whether listed on arecognised stock exchange or not,

(c) Dated Government Securities;(d) Derivatives traded on a recognised stock exchange;

(e) Commercial paper;

(f) Security receipts.


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Where a foreign institutional investor or sub-account holds equity shares in a company

whose shares are not listed on any recognisedstock exchange, and continues to hold suchshares after initial public offering and listingthereof, such shares shall be subject to lock-in

for the same period, if any, as is applicable toshares held by a foreign direct investor placedin similar position, under the policy of theCentral Government relating to foreign directinvestment for the time being in force.


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APPOINTMENTOFDOMESTICCUSTODIAN:

A Foreign Institutional Investor or a global custodian

acting on behalf of the Foreign Institutional Investor

shall enter into an agreement with a domestic custodian

to act as custodian of securities for the Foreign

Institutional Investor.

The Foreign Institutional Investor shall ensure that the

domestic custodian takes steps for:

(a) Monitoring of investments of the Foreign Institutional

Investor in India;(b) Reporting to the Board on a daily basis the

transactions entered into by the Foreign Institutional

Investor;


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(c) Preservation for five years of records relating to his

activities as a Foreign Institutional Investor; and

(d) Furnishing such information to the Board as may be

called for by the Board with regard to the activities of the

Foreign Institutional Investor and as may be relevant for

the purpose of this regulation.

A Foreign Institutional Investor may appoint more than

one domestic custodian with prior approval of the Board,

but only one custodian may be appointed for a single

sub-account of a Foreign Institutional Investor.


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APPOINTMENTOFDESIGNATED BANK:

A Foreign Institutional Investor shall appoint a branch

of a bank approved by the Reserve Bank of India for

opening of foreign currency denominated accounts and

special non-resident rupee accounts.


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APPOINTMENTOFCOMPLIANCE

OFFICER:

Every Foreign Institutional Investor shall appoint a

compliance officer who shall be responsible

for monitoring the compliance of the Act, rules and

regulations, notifications, guidelines, instructions etcissued by the Board or the Central Government.

The compliance officer shall immediately and

independently report to the Board any non-compliance

observed by him.

Documents

Foreign Institutional Investors (FIIs)