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Laws Governed with
A Foreign Institutional Investor may invest only in the following:-
securities in the primary and secondary markets including shares,
debentures and warrants of companies unlisted, listed or to be
listed on a recognised stock exchange in India; and
units of schemes floated by domestic mutual funds including Unit
Trust of India, whether listed on a recognised stock exchange or not
units of scheme floated by a collective investment scheme
dated Government Securities
derivatives traded on a recognised stock exchange
commercial paper
Security receipts
Indian Depository Receipt

An application has to be made under
Regulation 3 under FORM A for grant of
Certificate to deal with the securities as a
Foreign institutional Investor
Necessary further information regarding the
where abouts of the company is to be
provided on requirement by SEBI
Consideration of Application
For the purpose of the grant of certificate the
Board shall take into account all matters which
are relevant to the grant of a certificate and in
particular the following, namely:-
(a) the applicant's track record, professional
competence, financial soundness, experience,
general reputation of fairness and integrity:

In case of the Company
while considering the application from applicants under
clause (iv) the Board shall take into account the following,
(a) whether the applicant has been in existence for a
period of at least 5 years;
(b) whether it is legally permissible for the applicant to
invest in securities outside the country of its incorporation
or establishment;
(c) whether the applicant has been registered with any
statutory authority in the country of their incorporation or
(d) whether any legal proceeding has been initiated by any
statutory authority against the applicant.]

Regulation 6(2) of the SEBI FII Regualtions
Provide that For the purpose of determining
whether an applicant or foreign institutional
investor is a fit and proper person the Board
may take into account the criteria specified in
Schedule II of the Securities and Exchange
Board of India (Intermediaries) Regulations,
Conditions for grant of Certificate
The following conditions should additionaly be fulfilled by the company for
obtaining the certificate
(a) he shall abide by the provisions of the SEBI Regulations
(b) if any information or particulars previously submitted to the Board are found to
be false or misleading, in any material respect, he shall forthwith inform the Board
in writing;
(c) if there is any material change in the information previously furnished by him to
the Board, which has a bearing on the certificate granted by the Board, he shall
forthwith inform the Board;
(d) he shall appoint a domestic custodian and before making any investments
in India, enter into an agreement with the domestic custodian providing for
custodial services in respect of securities;
(e) he shall, before making any investments in India, enter into an arrangement
with a designated bank for the purpose of operating a special non-resident rupee
or foreign currency account;
(f) before making any investments in India on behalf of a sub-account, if any, he
shall obtain registration of such sub-account, under these regulations.

CAP for FIIs
investment by individual FIIs/ sub-accounts (excluding
foreign corporates and individuals) cannot exceed 10 per
cent of paid up capital of a company.
Investment by foreign corporates or individuals registered
as sub accounts of FII cannot exceed 5 per cent of paid up
All FIIs and their sub-accounts taken together cannot
acquire more than 24 per cent of the paid up capital of an
Indian Company.

FII Not Alowed in
Indian Law Prohibits Foreign Institutional
Investments in the following activities
Business of chit fund
Nidhi Company
Agricultural or plantation activities
Real estate business or construction of farm
houses (real estate business does not include
development of townships, construction of
residential/commercial premises, roads or bridges.
Trading in Transferable Development Rights

Our opinion is based on our understanding of the facts and the information made
available to us and hence any new facts or new information could have a bearing
on our opinion herein.

Our opinion is based on the law as of date which is subject to changes from time to
time and as such any changes may affect the advice contained in our opinion. We
have no responsibility to update our advice for events and circumstances occurring
after the date of this opinion, unless specifically requested by you.

Our opinion is solely for the information and use of___________(com.name). This
may not be used for any other purpose, or distributed to any other party, without
our prior written consent.

We do not, in giving this advice, accept or assume responsibility for any other
purpose or to any other person to whom this opinion is shown or in whose hands it
may come unless expressly agreed by us in writing.