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FOREIGN INSTITUTIONAL INVESTOR (FII)

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FII means an institution established outside India which proposes to make investment in India in securities. FII must register itself with SEBI for accessing Indian Stock Market. In simple words, FIIs are those institutional investors which invest in the assets belonging to a different country other than that where these organizations are based.

Functions and Role: After registration with SEBI, FIIs can invest in the securities available in the Indian primary and secondary markets including the investments in equity/debentures/warrants/other securities/instruments of listed or unlisted companies. FII plays a very important role in any economy. 

There are no restrictions on the volume of investment in terms of minimum or maximum for the purpose of entry of FIIs and these investments are not subject to lock – in period. These are the big companies such as investment banks, mutual funds etc, who invest considerable amount of money in the Indian markets. With the buying of securities by these big players, markets tend to move upward and vice – versa. They have strong influence on the total inflows coming into the economy.

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