Q: Is it necessary to submit the custody agreement with theapplication itself or it could be submitted before the registration procedures are completed?

Ans: It is not necessary to submit the custodian agreement. The applicant only has to declare that it has entered into a custodian agreement and should submit particulars of the domestic custodian.

Q: In which name should the securities be registered?

Ans: The Foreign Institutional Investor has the choice to register the securities in the following names:

1. In the name of the Foreign Institutional Investor if the FII is investing on its own behalf.

2. In the name of the sub-account if the FII is investing on behalf of the sub-account

3. In the name of the Foreign Institutional Investor a/c sub-account if the FII is investing on behalf of the sub-account

Q: What is the procedure in case the Foreign Institutional Investor/ sub account changes its name?

Ans: In case if a registered Foreign Institutional Investor changes its name, then it has to inform SEBI promptly with the relevant documents supporting the name change. The relevant documents are :

1. Request for change in name by the Foreign Institutional Investor mentioning reasons for name change of the FII and/or sub account.

2. Certificate from the Registrar of Companies, and/or approval from home regulator.

3. Original Registration Certificate issued by SEBI to the Foreign Institutional Investor

Q: What is the procedure for transferring a sub-account from one registered Foreign Institutional Investor to another?

Ans: In case if a registered sub-account wishes to transfer from one registered Foreign Institutional Investor to another, then the FII to whom it is proposed to be transferred has to request SEBI for the same along with 1) a declaration that it is authorised to invest on behalf of the sub-account and 2) a no-objection letter for the transfer of the sub-account from the transferor FII.

Q: What is the procedure for change of local custodian?

Ans: In case of change of the local custodian of the FII / sub-account, the change should be intimated to SEBI by the FII. On receipt of no objection from the existing custodian and acceptance from the proposed custodian, the change of custodian would be approved - by SEBI.

Q: What is the procedure for registration as FII/sub account under 100% debt route ?

Ans: The procedure for registration of FII/sub account under 100% debt route is similar to that of normal funds besides a clear statement by the applicant that it wishes to be registered as FII/sub account under 100% debt route. However, Government of India allocates the overall investment limit for 100% debt funds annually. The grant of investment limit for individual 100% debt funds is within this overall limit. The funds have to seek further investment limit in case the limit allotted to them is exhausted and they wish to invest further.

Q: Can a Foreign Institutional Investor having an existing account with one custodian open an account with other custodian
for its sub- accounts?

Ans: Yes. A Foreign Institutional Investor having an account with one custodian can open accounts with different custodians for its different sub-accounts. However, one sub-account cannot be custodied with more than one custodian.

Q: What is the procedure if an existing sub-account wants to get registered as a Foreign Institutional Investor?

Ans: In case if a registered sub-account wishes to get itself registered as a Foreign Institutional Investor, then it will have to apply in Form A to SEBI for the same and has to satisfy all the eligibility criteria norms mentioned in SEBI (Foreign Institutional Investor) Regulations, 1995. It should also submit a letter from the old FII indicating its 'No-objection' to such registration.

Q: In case of merger or takeover, in case if the registered Foreign Institutional Investor loses its existence, then can the
SEBI FII registration be transferred to the surviving entity?

Ans: No. SEBI FII Registration is not transferable. The surviving entity has to obtain fresh registration as an FII from SEBI.

Q: What are the investment limits for FII/sub-accounts?

Ans: The sub-account which is not a foreign individual/ corporate can individually invest upto 10%. The limit for each foreign corporate/ individual is 5%. These limits are within the overall limit of 24% / 49% or the sectoral caps as the case may be.

Q: Who all are included under the definition of foreign individual?

Ans: Foreign individuals mean all foreign residents other than Non- Resident Indian and Overseas Corporate Bodies.

Q: Can an FII/sub-account trade after its registration has expired?

Ans: If the FII/sub-account's registration expires , it cannot trade in the Indian securities market unless it obtains renewal from SEBI. In case, it is not interested in renewal but has certain residual assets, it can apply for disinvestment in terms of Circular No. FITTC/CUST/12/2001 dated June 04, 2001 and abide by the guidelines specified in this regard.

Q: Can protected cell companies/cells incorporated in Mauritius be registered as FIIs/sub-accounts?

Ans: No.

Q: Can FII/sub-accounts trade in derivatives ?

Ans: Yes subject to operational guidelines as specified by SEBI/RBI/various regulatory authorities from time to time.

Q: What is the procedure for renewal of FII/sub-account registration?

Ans: The FII has to apply 3 months before the expiry of registration in Form A. The application for renewal is dealt with in the same manner as if it were an application for FII registration. Also, Circular No FITTC/CUST/09/2000 dated September 21, 2000 may be referred in this regard.