The operational modalities should clear the way for Qualified Foreign Investors (QFIs) to invest in Indian mutual funds
RBI it its recent circular has announced a few operational procedure that would be mandatory for the Qualified Financial Individuals (QFIs) to follow while investing in mutual funds. The QFIs would be allowed to invest through two routes - SEBI registered Depository Participant (DP) route (direct route) and Unit Confirmation Receipt (UCR) route (indirect route).
The investments by QFIs will fall under the cap of USD 10 billion under both the routes. SEBI will monitor the ceiling of USD 10 billion on a daily basis through the concerned domestic MFs and DPs.
No secondary market purchases would be allowed and the investment by these investors will be in the units which are directly issued by the domestic MFs. Domestic MFs along with DPs will take care of the KYC requirement to be fulfilled by QFIs. Units and UCRs issued under this scheme to QFIs would be non-tradable and non-transferable.
