Question

Q45) QFI (qualified foreigner investor) can be

• A. a) Entity of any country
• B. b) Entity of FATF countries only
• C. c) Entity of EU countries only
• D. d) Entity of ASEAN countries only

Answer 1

The correct option is B

b) Entity of FATF countries only

Ans: B
Explanation: The Qualified Foreign Investor (QFI) is sub-category of Foreign Portfolio Investor and refers to any foreign individuals, groups or associations, or resident, however, restricted to those from a country that is a member of Financial Action Task Force (FATF) or a country that is a member of a group which is a member of FATF and a country that is a signatory to International Organization of Securities Commission’s (IOSCO) Multilateral Memorandum of Understanding (MMOU).

QFI scheme was introduced by Government of India in consultation with RBI and SEBI in the year 2011, through a Union Budget announcement.The objective of enabling QFIs is to deepen and infuse more foreign funds in the Indian capital market and to reduce market volatility as individuals are considered to be long term investors, as compared to institutional investors.