Where FII can invest?

Current financial instruments are available for FII investments Securities in primary and secondary markets including shares, debentures and warrants of companies, unlisted, listed or to be listed on a recognized stock exchange in India; Units of mutual funds; Dated Government Securities; Derivatives traded on a recognized stock exchange ; Commercial papers

Major Foreign Institutional Investors In Indian Market

Citigroup Deutsche Group HSBC Global Investments Morgan Stanley & Co. International Ltd. Merrill Lynch Capital Markets Espana

FII Regulations
Limit for FII investments Allowed to transact business Equity shares can be borrowed by FIIs only for the purpose of delivery into short sale No transactions on the stock exchange can be carried forward Transaction of business in securities

Taxation
Nature of Income Tax Rate: 1. Short-term capital gains30%
2. Long-term capital gains10%. 3. Corporate dividend declared after June 01, 1997Nil 4. Interest Income20%
Short-term Capital Gain: Capital gain on sale of a security held for a period of less than one year is termed as short-term capital gain Long-term capital gain: Capital gain on sale of a security held for period more than one year is termed as Long-term capital gain

Why there is need of FII ?

FII flows supplements and augmented domestic savings and domestic investment without increasing the foreign debt of our country Capital inflows to the equity market increase stock prices, lower the cost of equity capital and encourage the investment by Indian firms The expert group opines that FII inflows have some savings like features