In India, the term “Foreign Portfolio Investor” refers to FIIs or their sub-accounts, or qualified foreign investors (QFIs).
Portfolio Investment by any single investor or investor group cannot exceed 10% of the equity of an Indian company, beyond which it will now be treated as FDI.
FIIs, Sub-Accounts and QFIs are merged together to form the new investor class, namely Foreign Portfolio Investors, with an aggregate investment limit of 24% which can be raised by the Company up to the applicable sectoral cap.
All existing FIIs and Sub Accounts can continue to buy, sell or otherwise deal in securities under the FPI regime.
All existing Qualified Foreign Investors (QFIs) may continue to buy, sell or otherwise deal in securities only till the period of one year from the date of notification of the FPI Regulation. In the meantime, they have to obtain FPI registration.
Non-Resident Indians (NRIs) and Foreign Venture Capital Investors (FVCI) are excluded from the purview of this definition.
FPIs are permitted to invest in Government Securities with a minimum residual maturity of one year. However, FPIs have been prohibited from investing in T-Bills.
FPI can invest in privately placed bonds if it is listed within 15 days.
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