Indian stock market regulator, SEBI made an announcement on FIIs investments. Foreign Institutional Investors (FII) pool money from foreign institutions, Foreign high net wroth individuals (HNIs) and invest money in Indian stock market. It came to SEBI’s notice that there is a chance that a few HNIs would pump money into the market and play it.
As per the new rules an FII should invest money in Indian stock market only if it pools that money from a minimum of 20 investors. It reduces the risk of play by a few individuals. However, this rule is not applicable for some accounts such as Pension funds. There would also be a restriction on percentage (49%) of investment by a single investor in the pool.
The rules will come into effect from October 1st and all the FIIs will have to register afresh with SEBI to abide by the new rules. A request from FIIs to increase the deadline was rejected.
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Sathish Emmadi
Sathish Emmadi is a co-founder & editor at Lastbull.com. He is presently working in IT for one of the world’s top mutual fund companies. Handled multiple projects in BFSI (Banking,Financial Services and Insurance) domain. An Engineering Graduate from NITW.
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