SEBI revised framework for Qualified Foreign Investor (QFI) investment in Equity Shares and Mutual Fund schemes

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Vide its Circular no CIR/ IMD/ FII&C/ 13/ 2012, Dated June 07, 2012, RBI has revised the definition of QFI. Under the new definition, QFI shall mean a person who fulfils the following criteria:

  1. Resident in a country that is a member of Financial Action Task Force (FATF) or a member of a group which is a member of FATF; and
  2. Resident in a country that is a signatory to IOSCO’s MMOU (Appendix A Signatories) or a signatory of a bilateral MOU with SEBI:
Provided that the person is not resident in a country listed in the public statements issued by FATF from time to time on-
  1. jurisdictions having a strategic Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) deficiencies to which counter measures apply,
  2. jurisdictions that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan developed with the FATF to address the deficiencies
Provided further such person is not resident in India.

Provided further that such person is not registered with SEBI as Foreign Institutional Investor or Sub-account or Foreign Venture Capital Investor.

The circular further extends the option of appointment of custodian of securities by the QFI. Further a QFI shall open a single non-interest bearing Rupee Account with an AD Category- I bank in India, for routing the receipt and payment for transactions relating to purchase and sale of eligible securities subject to the conditions as may be prescribed by RBI from time to time.

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