Eligibility or Requirements for making an FII:
- =>Pension Funds
- =>Mutual Funds
- =>Investment Trust
- =>Insurance or reinsurance companies
- =>Endowment Funds
- =>University Funds
- =>Foundations or Charitable Trusts or Charitable Societies who propose to invest on their own behalf,
And if wants to register as a broad base funds then it can be in the form of
- =>Asset Management Companies
- =>Nominee Companies
- =>Institutional Portfolio Managers
- =>Power of Attorney Holders
- Ø Applicant should have track record, professional competence, financial soundness, experience, general reputation of fairness and integrity.
- Ø The applicant should be regulated by an appropriate foreign regulatory authority in the same capacity/category where registration is sought from SEBI. Registration with authorities, which are responsible for incorporation, is not adequate to qualify as Foreign Institutional Investor.
- Ø The applicant is required to have the permission under the provisions of the Foreign Exchange Management Act, 1999 from the Reserve Bank of India.
- Ø Applicant must be legally permitted to invest in securities outside the country or its in-corporation / establishment.
- Ø The applicant must be a “fit and proper” person.
- Ø 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.
Gateway to Financial Industry
Foreign Institutional Investor can make Investments in following:
- Ø Units of mutual funds.
- Ø Dated Government Securities.
- Ø Derivatives traded on a recognized stock exchange.
- Ø Commercial papers.
- Designated Bank means any bank in India which has been authorized by the Reserve Bank of India to act as a banker to FII.
- Domestic Custodian means any entity registered with SEBI to carry on the activity of providing custodial services in respect of securities.
- Ø Application for registration as an FII should be made in Form A. The format of Form A is provided in the SEBI (FII) Regulations, 1995. The application form and all supporting documents must be submitted in duplicate, one set each for SEBI and Reserve Bank of India. Both sets of application are to be sent to SEBI only. If the applicant is eligible and all documents are submitted with the application, the eligibility is generally conveyed with 10 to 12 days of receipt of application by SEBI.
- Ø The registration procedure operates as a single window procedure through SEBI in which the following steps are involved.
- Ø SEBI forwards one set to Reserve Bank of India.
- Ø The application is processed by SEBI to determine its eligibility for grant of registration as foreign institutional investor.
- Ø After the initial processing is complete, SEBI writes to Reserve Bank of India mentioning the eligibility of the applicant. At the same time , a letter is sent to applicant asking it to submit the registration fees of US$ 5,000 through a demand draft drawn in favor of “Securities and Exchange Board of India” payable at New York.
- Ø Reserve Bank of India gives approval to the FII through its designated bank. This approval is granted Foreign Exchange Management Act and enables the FII(s) to open a bank account. This is a special non-resident rupee account of the FII meant purely for inward remittance and meeting payment obligation with regard to securities market. It may be noted that all balance lying in this account are fully repatriable.
- Ø Upon receipt of fees from the applicant and FEMA approval from Reserve Bank of India, SEBI grants the certificate of registration, which is valid for five years, and may be renewed thereafter.
Gateway to Financial Industry
- Ø Application in Form A duly signed by the authorized signatory of the applicant.
- Ø 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
- Ø Audited financial statements and annual reports for the last one year, provided that the period covered shall not be less than twelve months.
- Ø A declaration by the applicant with registration number and other particulars in support of its registration or regulation by a Securities Commission or Self Regulatory Organization or any other appropriate regulatory authority with whom the applicant is registered in its home country.
- Ø A declaration by the applicant that it has entered into a custodian agreement with a domestic custodian together with particulates of the domestic custodian.
- Ø A signed declaration statement that appears at the end of the Form.
- Ø Declaration regarding fit & proper entity
Broad Based Fund
Contact for The registration of Foreign Institutional Investors