As part of efforts to encourage foreign investments,Finance Ministry officials today held discussions with representatives of Sebi on the issue of allowing Qualified Foreign Investors (QFIs) to directly buy stocks on the capital markets. The decision,sources said,would help in attracting equity capital from abroad and also project India as a global investment destination. A QFI is an individual,group or association resident in a foreign country which complies with the Financial Action Task Force (FATF) standards. The government,in August,had permitted QFIs to invest up to $13 billion in equity and debt schemes of mutual funds in the infrastructure sector. QFIs were allowed to invest through two routes either holding mutual fund units in a demat account through Sebi-registered depository participants or by holding MF units via unit confirmation receipts. Currently,QFIs cannot invest directly in stock markets. In view of the declining FII investment and volatility in stock markets,the government has been contemplating giving QFIs direct access to the securities market on the pattern of mutual funds. The government had earlier allowed overseas high networth individuals (HNIs) with a minimum net worth of $50 million and registered as a sub-account of Foreign Institutional Investors (FIIs) to directly buy equities in stock markets.
