Question

Q. Which of the below mentioned is incorrect with reference to ‘Qualified foreign investor’ (QFI):

• A.
  They are a subcategory of foreign direct investors (FDI).
• B.
  The QFI scheme was introduced by the government in 2011.
• C.
  Objective of QFI is to make the market stable from being volatile.
• D.
  QFI can invest by having a demat account.

Answer 1

The correct option is A

They are a subcategory of foreign direct investors (FDI).
Explanation:

Option (a) is incorrect: The Qualified Foreign Investor (QFI) is a sub-category of Foreign Portfolio Investor not FDI.

Option (b) is correct: The QFI scheme was introduced by the Government of India in the year 2011, through a Union Budget announcement.

Option (c) is correct: The objective of enabling QFIs is to have more foreign funds in the Indian capital market and to reduce market volatility.

Option (d) is correct: QFIs are allowed to make investments in the following instruments by opening a demat account in any of the SEBI approved Qualified Depository Participant (QDP).