Foreigners will now be able to do direct investment in Indian stock market, relevant circular expected to be released on 15 January by SEBI and RBI. QFI allowed to invest directly in the domestic stock market. Government is now allowed eligible foreign investors (QFI - Qualified foreign investors ) to invest directly in the Indian stock market.
The government took this decision at a time when a large amount of foreign capital has taken away from the domestic stock market. Because of the rupee is facing the sharp fluctuation against the dollar . The official announcement of the decision was done on sunday .
Stock market regulator Sebi and RBI circular to this effect is expected to be released till 15th January.
How the Investment will be done: QFI is able to invest in the stock market through Qualified Depository Participants registered with SEBI . Foreign investors was allowed to invest 13 billion dollars directly in the equity and debt schemes of mutual funds by the Government in August last year.
As far as foreign portfolio investment is concerned, at present only FIIs and their sub - accounts and non-resident Indians (NRIs) are allowed to invest directly in Indian stock market.
What will be the impact:
- The flow of foreign capital will increase in India's stock markets .
- Continuous fluctuation in the stock market can be stopped.
- Investment category in the Indian market can be expand
- Will increase the scope of the Indian stock market investments.
- Hope to the restoration of the domestic stock market boom.
Qualified Foreign Investors (QFI) are person in abroad , a group or organization that can meet the standards of the Financial Action Task Force. QFI foreign institutional investors and their sub - accounts are not included.
What Will be the limit
The individual and overall investment limit for the QFI will be 5 per cent and 10 per cent respectively. of an Indian company paid - up capital. This limit actually is in addition to FII and NRI investment limit, under Portfolio Investment Scheme fixed for foreign investment in India. With the permission QFI Wishing to invest in Indian stock market would find help here
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