FII Invesrment Tips

FII is an investor or investment fund that is from or registered in a country outside of the one in which it is currently investing. Foreign Institutional Investors (FIIs), Non-Resident Indians (NRIs), and Persons of Indian Origin (PIOs) are allowed to invest in the primary and secondary capital markets in India through the portfolio investment scheme (PIS). Under this scheme, FIIs/NRIs can acquire shares/debentures of Indian companies through the stock exchanges in India.

FIIs are required to register themselves with Securities and Exchange Board of India (SEBI) before they invest in the Indian capitalor stock market. Application for registration should be made by FIIs to SEBI in the prescribed form in duplicate. One copy of the application will be forwarded by SEBI to Reserve Bank. Reserve Bank will grant permission under FERA 1973 to the bank branch designated by the applicant FII to buy/sell equity shares/debentures/warrants dated Government Securities/Treasury Bills/ units of domestic mutual funds.Practice might not make ideal in a unstable stock market place but Stock Tips and Share Tips

Tips has proved to be prudent prior to starting to trade with cash on on-line trading platforms. Reserve Bank’s permission will be initially valid for five years and will be operative only after obtaining registration form SEBI. This permission can be renewed for a further period of five years on request.

The Reserve Bank of India monitors the ceilings on FII/NRI/PIO investments in Indian companies on a daily basis. For effective monitoring of foreign investment ceiling limits, the Reserve Bank has fixed cut-off points that are two percentage points lower than the actual ceilings. The cut-off point, for instance, is fixed at 8 per cent for companies in which NRIs/ PIOs can invest up to 10 per cent of the company's paid up capital. The cut-off limit for companies with 24 per cent ceiling is 22 per cent and for companies with 30 per cent ceiling, is 28 per cent and so on. Similarly, the cut-off limit for public sector banks (including State Bank of India) is 18 per cent.