January 25, 2012
Re: Investment by Qualified Foreign Investors (QFI) in Indian equity shares
Trading Members of the Exchange are hereby informed that the Exchange has received a Circular from SEBI vide Ref. No. CIR/ IMD/FII&C/3/2012, dated January 13, 2012 regarding the captioned subject. The Central Government, vide press release dated January 1, 2012 has announced its decision to allow Qualified Foreign Investors (QFI) to directly invest in Indian equity market in order to widen the class of investors, attract more foreign funds, reduce market volatility and to deepen the Indian capital market.
In order to facilitate the above and in consultation with the Government and RBI, SEBI has issued this circular stating that foreign investors (termed as Qualified Foreign Investors/ QFI) who meet prescribed Know Your Customer (KYC) requirements may invest in equity shares listed on the recognized stock exchanges and in equity shares offered to public in India. In order to enable this they will hold equity shares in a demat account opened with a SEBI registered qualified Depository Participant.
The captioned SEBI Circular contains conditions for becoming qualified Depository Participant for this purpose, eligible transactions for QFI, account opening and manner of operation by QFIs, investment restrictions and monitoring of investment limits for QFI, process flow etc., As the SEBI circular relating to the above is voluminous, the contents of the SEBI Circular are available in CSE website at “cse-india.com” and also at SEBI website at “sebi.gov.in”
Trading members of the Exchange are advised to refer CSE website/SEBI website for detailed procedures and guidelines in this regard.
Deputy General Manager