The Qualified Foreign Investor (QFI) is sub-category of Foreign Portfolio Investor and refers to any foreign individuals, groups or associations, or resident, however, restricted to those from a country that is a member of Financial Action Task Force (FATF) or a country that is a member of a group which is a member of FATF and a country that is a signatory to International Organization of Securities Commission’s (IOSCO) Multilateral Memorandum of Understanding (MMOU).
QFI scheme was introduced by Government of India in consultation with RBI and SEBI in the year 2011, through a Union Budget announcement.
The objective of enabling QFIs is to deepen and infuse more foreign funds in the Indian capital market and to reduce market volatility as individuals are considered to be long term investors, as compared to institutional investors.
QFIs are allowed to make investments in the following instruments by opening a demat account in any of the SEBI approved Qualified Depository Participant (QDP):
Equity and Debt schemes of Indian mutual funds,
Equity shares listed on recognized stock exchanges,
Equity shares offered through public offers
Corporate bonds listed/to be listed on recognized stock exchanges
G-Securities, T-Bills and Commercial Papers
QFIs do not include FIIs/Sub-accounts/ Foreign Venture Capital Investor (FVCI)
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