Investors from Gulf countries will be able to access the Indian capital market as Qualified Foreign Investors (QFIs).
The Finance Ministry, which aims to attract $50-75 billion in the next two years through QFIs, is planning road-shows in five Gulf countries this month-end.
While announcing the scheme in January, the Ministry had said that residents from full member-countries of the Financial Action Task Force (FATF) would be allowed to invest as QFIs.
This led to investors from Gulf countries seeking clarifications, as many of them in their individual capacities are not members of the FATF, but of the Gulf Co-operation Council (GCC). GCC is a full member of FATF.
“Investors from GCC member-countries will be allowed to come in as QFIs. The Ministry and the regulators will soon clarify that investors from these countries, not members of FATF directly, will be allowed to invest,” a senior Finance Ministry official said.
QFI means individual foreign investors, foreign pension funds or even foreign associations. The Finance Ministry introduced this scheme on January 1 for investment in equity, while the Budget proposes to allow QFIs in corporate debt as well.
The Ministry is planning road-shows in the UAE, Saudi Arabia, Bahrain, Oman and Kuwait, led by the Secretary in the Department of Economic Affairs and the Joint Secretary (Capital Market).
Regarding the progress on QFIs, the official claimed that over a dozen depository participants had already registered. The QFIs will be allowed to invest only through SEBI-registered DPs, which will also ensure that they follow the ‘Know Your Client (KYC)' norms.
Shishir.s@thehindu.co.in