QFIs Can Invest Upto $10 Bn In Mutual Funds
The move to allow foreign investors, known as Qualified Foreign Investors (QFI), was first proposed by Finance Minister Pranab Mukherjee in the 2011-12 Budget. .
QFIs could be individuals and bodies, including pension funds and can invest money into domestic mutual funds through Unit Confirmation Receipts (UCR) or Direct/Depository Participant (DP) route.
SEBI will be the regulator for all investments for both routes. SEBI will issue necessary notification and framework for such investments by August 1.
Currently, only FIIs and sub-accounts registered with SEBI and NRIs are allowed to invest in Indian mutual fund schemes.
In DP route, a QFI will open a demat account with a depository in India and buy units; while in UCR route an investor will place an order with an overseas depository, which will then transfer it to a custodian bank in India for buying the units.
As on March 2011, the average assets managed by the MF industry, consisting of 40 players, stood at Rs.7,00,538 Cr.
Reference: Economic Times
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