8/9/2019 FII, Bongo

1/9

FOREIGNINSTITUTIONALINVESTMENT

8/9/2019 FII, Bongo

2/9

INTRODUCTION

The term foreign institutionalinvestment denotes all those investorsor investment companies that are not

located within the territory of the countryin which they are investing.

These are actually the outsiders in thefinancial markets of the particularcompany. Foreign institutional investmentis a common term in the financial sectorof India.

8/9/2019 FII, Bongo

3/9

The type of institutions that are involvedin the foreign institutional investmentare as follows:

1. Mutual Funds

2. Hedge Funds

3. Pension Funds4. Insurance Companies

8/9/2019 FII, Bongo

4/9

FACTS

Some important facts about the foreigninstitutional investment:

The number of registered foreign

institutional investors on June 2006813 has reached to 1042 in 2007.

The total amount of these investments

in the Indian financial market till June2007 has been estimated at US $53.06billion.

8/9/2019 FII, Bongo

5/9

CONTD.

The foreign institutional investors arepreferring the construction sector,banking sector and the IT companies

for the investments. Most active foreign institutional

investors in India are HSBC, Citigroup.

US $6 billion has been invested inequities by these investors.

8/9/2019 FII, Bongo

6/9

FIIS?

The foreign investment market was not so developed in thepast. But once the globalization took the whole world in its grip,

the diversified global market became united. Because of this theinvestment sector became very strong and at the same timeallowed the foreigners to enter the national financial market.

The economies like India, which are growing very rapidly, are

becoming hot favourite investment destinations for the foreign

institutional investors

8/9/2019 FII, Bongo

7/9

These markets have the potential to grow in the near future .

The promise of rapid growth of the investable fund istempting the investors and so they are coming in huge

numbers to these countries.

These are the prime reasons behind the growing interest of the

foreign investors towards India. The money, which is comingthrough the foreign institutional investment is referred as 'hot

money' because the money can be taken out from the market

at anytime by these investors.

8/9/2019 FII, Bongo

8/9

SEBI (FIIS) REGULATION,1995

The regulation stipulated that foreigninstitutional investors have to be registeredwith the SEBI and obtain a certificate from theSEBI.

the applicants track record, professionalcompetence, financial soundness, experience,general reputation of fairness etc,

whether the applicant is regulated byappropriate Foreign Regulatory Authority;

8/9/2019 FII, Bongo

9/9

Whether the applicant has been grantedpermission by the RBI under the ForeignExchange Regulation Act, for makinginvestment in India as a foreigninstitutional investor; and

an institution of applicant established orincorporated outside India as a pensionfund, mutual fund, or investment trust;

a trustee or power of attorney holderestablished or incorporated outside Indiaor proposing to make investments In Indiaon behave of board-based funds