Market regulator SEBI (Securities and Exchange Board of India) has revised the registration guidelines for FIIs. Institutions set up by non-resident Indians can now register as FIIs and invest in the Indian stock markets.
Sebi has amended regulations for easier registration of FIIs and sub-accounts. It has also made AMCs, Investment Managers or advisors owned by NRI eligible for FII registration.
Sebi has allowed FIIs to invest in collective investment schemes. It has said that NRIs can register as FIIs if they do not invest their proprietary funds.
Sebi has allowed sovereign wealth funds, pension funds and endowment funds to register as FII. FIIs cannot issue Offshore Derivative Instrument to any entity not regulated by the Foreign Regulatory Authority. They can issue offshore instruments only after compliance with know your customer, or KYC, norms. Non-regulated FIIs have to cancel, redeem or close positions by March 2009.
Investors were anyways investing through PE notes in India but it’s a classic example of Indian fund managers who are based overseas or heading institutions but were having problems because of the PE note gap which was there. So, now they will be able to register through being an FII.
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