TYPES OF INFLOWS
• Foreign Direct Investment
– Forbidden Areas
• Pension Funds
• Mutual Funds
• Investment Trust
• Insurance or reinsurance companies
• Endowment Funds
• University Funds
Contd..
• Asset Management Companies
• Nominee Companies
• Institutional Portfolio Managers
• Trustees
• Power of Attorney Holders
• Bank
• It also includes asset management
companies and other money managers
operating on their behalf.
Categories of registered FIIs
• Regular FIIs:
– not less than 70 per cent in equity related
instruments
– 30 per cent in non-equity instruments.
• 100 per cent debt-fund FIIs:
– permitted to invest only in debt instruments.
1. FDI is when a foreign company brings capital FII is when a foreign company buys equity in a
into a country or an economy to set up a company through the stock markets. Therefore,
production or some other facility. FDI gives the in this case, FII would not give the foreign
foreign company some control in the operations company any control in the company.
of the company
2. Foreign direct investment involves in the direct Foreign portfolio investment is a short-term
production activity and also of medium to long- investment mostly in the financial markets and it
term nature consists of Foreign Institutional Investment
(FII).
3. It enables a degree of control in the company. It does not involve obtaining a degree of control
in a company.
• Registration
•Hot Money.
• Diverse Market
• Indian Bureaucracy
• Market Study
• They Leave no audit trail between sub broker and the member broker
after settlement.
• The FIIs buy stocks from the Indian market in their name, which they
in turn distribute to their clients on their own basis by issuing PNs.
• Front-door entry via FII registration for foreign investors into the
Indian capital market is restricted due to complex documentation and
delays in registration with Sebi, back-door entry via PNs is
unrestricted.
• NO