Foreign Institutional Investor

FII or Foreign Institutional Investor is an investment done in a country outside the one where that is registered or headquartered. Here the companies only need to get registered in the stock exchange to make investments. They refer to outside entities investing in the national financial market. Some countries place restrictions on the size of investments by foreign investors.

In India, FII is used for overseas entities that invest in the Indian financial markets. FIIs play a significant role in any economy. They are typically big companies and organisations such as banks, mutual fund houses, and other such entities that invest massive sums of money in the Indian investment market. The presence of FIIs in a stock market, and the securities they purchase, help the markets move upward. As such, they can strongly influence the total cash inflow coming into an economy.

China is one of the most popular destinations for FII seeking to invest in high-growth capital. In India, FIIs are allowed to invest in primary and secondary capital markets through country’s portfolio investment scheme.

To participate in the market, all FIIs must register with SEBI.