Most of the times we hear Indian stock market sensex ends down’x’ pts because of heavy FII selling, Ever wondered what is Foreign Institutional Investor– FII means?
Who is Foreign Institutional Investor ?
Foreign Institutional Investor is an entity established or incorporated outside India which invests in the financial markets of India.
Positive tidings about the Indian economy (BRIC country) combined with a fast-growing market have made India an attractive destination for foreign institutional investors (FIIs).
International institutional investors must register with the Securities and Exchange Board of India to participate in the market.
Who can get registered as FII?
Following entities / funds are eligible to get registered as FII:
1. Pension Funds
2. Mutual Funds
3. Insurance Companies
4. Investment Trusts
6. University Funds
9. Charitable Trusts / Charitable Societies
Further, following entities proposing to invest on behalf of broad based funds, are also eligible to be registered as FIIs:
1. Asset Management Companies
2. Institutional Portfolio Managers
4. Power of Attorney Holders
CLSA, HSBC, Citigroup and Merrill Lynch have been the most active foreign investors.
Many others, including Crown Capital, Fidelity, Goldman Sachs, Morgan Stanley, UBS, T Rowe Price International, Capital International and ABN Amro, have taken a significant exposure to Indian equities.