Foreign Institutional Investors is being explained in this document. We have tried to comprehend as much information as possible. QLI is one of the best CFA, CA and CS Classes. (www.qli.co.in)

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Foreign Institutional investors:-
 FII = Institution established / incorporated outside India
Proposes to make investment in Indian securities.
 It must have valid certificate granted by SEBI, without this certificate no person can buy/sell
or otherwise deal in securities as FII.
SEBI considers following points before granting certifiable:-
 Track record , competence, financial sounds, experience, etc
 FII is record regulated by a proper “ foreign Regulated Authority”
 Has granted permission from RBI.
 FII can invest in securities in both:
 Primary market
 Secondary market
Including:
 shares, debentures,
 warrants of co’s unlisted/ listed or to be listed on recognized Stock exchange
in India
 domestic mutual funds,
 dated gilt securities,
 derivatives,
 commercial papers, etc
Merchant Banker
Merchant bank: it is a private equity activity of
investment banks, it also a part of alternative
investment division  research  Strategy

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Merchant Banker: All public issues
Are managed by atleast 1 merchant banker
 It undertakes activities relating to :
 Following are some other activities of merchant banker:
Preparation of prospectus / Letter of offer, determining the financial structure, finding
financers, final allotment and refund of application money
Primary market Intermediaries
Provide useful service to the company
Merchant
banker
Advisor /
Portfolio manager
Management of
issueof
capital
Investment advice Acts as manager underwriter
undertakes
activities relating
to

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While making republic issue sec.
 These intermediaries company reaches its prospective investors and work as a team to
complete the issue.
 Merchant banker / lead Merchant Banker
 Registrars and share transfer agents
 Under writers
 Bankers to issue
 Debenture trustee
 Depositary Participants (DP)
 Credit rating Agencies
 Portfolio managers
Registrar toanissue
Registrar to an Issue:- means a person authorized  by bodycorporate  to carry on following
activities on its behalf
I. Collecting Application from investors in respect of an issue.
II. Keeping a proper record of application and money received from
investor.
III. Basis of allotment, processing and dispatching allotment letters &
refunds.
Summary
1 2 3
Collecting application proper records allotment
Application money Basis Processing Dispatching
INTERMEDIARIES

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Share Transfer Agent
STA  means any person  who on behalf of any body corporate  deals with all matters
Transfer / redemption of
Security
 Share transfer agent shall exercise adequate care & due diligence before dematerilization of
security
Underwriter
Underwriting- means an agreement with / without conditions to subscribe to the security of body
corporate when the existing shareholder of such body corporate / Public do not subscribe to the
security offered to them.
Underwriter—means a person – who engages in the business of underwriting of an issue of security
of body corporate.
E.g., Banks, Financial institutors, merchant Bankers stock bankers.
When X existing shareholder does not subscribe underwrites
X Public to security of body corporate agrees to subscribe
Meaning of Custodian of Securities
It meansanyperson  whocarries onor proposes  to carry on the business
of providingcustodian service
Custodianservices means safe keepingof securitiesorgoldor goldrelatedinstrument.
The other functionsof custodian service include –
 Maintainingaccounts of securities orgoldor goldrelatedinstruments of aclient;[ S/G/GRI]
 Collectionofbenefits or rights accruingto the clientinrespect of securitiesorgoldorgold
relatedinstruments;

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 Keepingthe client informedof the actionstaken or to be taken by the issuerof securities
[ Action taken by issercompany  informthe client]
 Maintainingand reconcilingrecordsof the servicesreferredinabove clauses.

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Debt Markets
Introduction  market for issuance, trading, settlement
In fixed income security
DEBT Market
In India comprises
2 segments
Government Corporate
Debenture / Bonds Debentures / Bonds
E.g.: zero coupon bonds, floating E.g.: FI bonds, PSU Bonds, debentures
rate bonds, T- bills, etc
These debt
instruments
can be issued
by
any legal entity
By
banks
by
Financial
institutions
Statutory
Companies
Public
Company
State Central
government

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Debt market
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Corporate debentures :- Different Categories
 Secured
 Unsecured
 Non Convertible debenture
 Partly convertible debenture
 Fully Convertible debenture
 Optionally convertible debenture
Debt Securities:
 Company issuing  debt security
Such companies
Offers to pay interest in lieu
Of borrowed for a certain period
 Long terms debt instrument issued by private sectors companies.
 They are transferrable
 There are various types of fixed income instrument which cater to the needs of both
Investors + issuers.
 Such instruments are classified on the basis of
Internet Time duration ,etc
Fixed income Products
 Instruments which provide for fixed income returns on investment
 Bank fixed deposits (FD’s) {banks have 3 types of FD’s }
 Corporate FD’s
 Public Provident Fund
 Kishan Vikas patra
Investors in debt Market

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Explain the regulatory frame would of debt Market in India
ISSUE OF
Non convertible convertible either - Fully
Debt security -partially
- Optionally
Whether into listed or unlisted Equity
Issued to public / private place
Even listing of such security shall be guided by
“ Disclosure norms” applicable to equity
Or other instruments
Shall be in accordance
Provisions of SEBI SEBI
SEBI (Issue and listing
Of debt sec) Regulations, 2008
• FII's
•Retail investors
•Veryimportant
categoryof
investors
•Debtmarket•T- Bills
•Commercial
Papers
• Private
debentures
Banks
Insurance
Companies
Trusts
Provident
Fund/
Mutual
Funds