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What are the regulations regarding Portfolio Investments by Foreign Institutional Investors (FIIs)?

April 26, 2017fiis foreign institutional investments investors portfolio regulations

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What are the regulations regarding Portfolio Investments by Foreign Institutional Investors (FIIs)?

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Investment by FIIs is regulated under SEBI (FII) Regulations, 1995 and Regulation 5(2) of FEMA Notification No.20 dated May 3, 2000. FIIs include Asset Management Companies, Pension Funds, Mutual Funds, Investment Trusts as Nominee Companies, Incorporated/ Institutional Portfolio Managers or their Power of Attorney holders, University Funds, Endowment Foundations, Charitable Trusts and Charitable Societies. SEBI acts as the nodal point in the registration of FIIS. RBI has granted General Permission to SEBI Registered FIIs invest in India under the Portfolio Investment Scheme. All FIIs and their sub-accounts taken together cannot acquire more than 24% of the paid up capital of an Indian Company. Indian Companies can raise the above mentioned 24% ceiling to the Sectoral Cap / Statutory Ceiling as applicable by passing a resolution by its Board of Directors followed by passing a Special Resolution to that effect by its General Body.